Funding agreed within the new contract equates to an average of around £65,200 additional income per pharmacy in England for 2025/26, according to the negotiating body.

Community Pharmacy England (CPE) said that while in practice income would ‘vary considerably’, on average, pharmacies would see an extra £5,432 a month under the new deal.

In a statement on Friday, CPE reiterated that it had ‘reluctantly accepted’ the latest contract deal with the government ‘because it is the first significant increase in funding for the sector in 10 years and the highest across the whole NHS’.

‘This is not viewed as a settlement that resolves all of the sector’s problems; the government has acknowledged that this is only the first step towards stabilising the sector and that it has ambitions to define clearly the future role of the sector and its potential to further support the NHS,’ it said.

‘It has given a firm commitment to working with us towards a sustainable funding and operational model for community pharmacy.’

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What is the expected change in income for an average pharmacy?

The new £3bn contract will see an ‘overall benefit’ to pharmacy contractors of £841m in 2025/26, when compared to 2023/24.

CPE said this uplift was not allocated against any specific costs, such as recent National Insurance rises and wage rises, but that it comes as part of a ‘wider recognition that the sector has been critically underfunded for many years’.

As part of the deal, core contract sum funding has risen by £511m compared to 2023/24.

The increase in Pharmacy First budget has also increased by £167m over the same time period, CPE noted.

‘Spread over the total number of pharmacies in England currently, these two elements would equate to an average of roughly £65,200 per pharmacy, or £5,432 per month,’ it said in a FAQs statement published on Friday.

It added there would ‘also be the benefit of the £193m margin write off, which will keep reimbursement prices higher than they would otherwise have been’.

In reality, income will vary depending on the size of a pharmacy and the different levels of activities provided, and so CPE has produced an ‘Indicative Income Calculator’ to help pharmacy owners produce a bespoke estimate for their monthly income for 2025/26.

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The gap between the contract and the economic review

Since the contract deal was announced last week, CPE has faced some criticism for accepting a funding deal that is 'inadequate'.

The Independent Pharmacies Association (IPA) suggested if the contract deal had been 'imposed' – rather than accepted by Community Pharmacy England (CPE) – the sector would be able to contest it.

Concerns have been raised that the deal is not in line with the NHS England-commissioned economic review of the sector, which found current funding meant around 47% of pharmacies were not profitable in their last accounting year.

In its latest statement, CPE said: ‘Government was clear that the settlement was as much as they could deliver to help stabilise the sector given the current extreme pressures on public finances.

‘The full economic cost figure and trajectory analysis gives a clear ambition to work towards and will be an important factor in [the Department of Health and Social Care’s] submissions to the comprehensive Spending Review.

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‘After considerable deliberation, the [CPE] committee made the difficult decision to reluctantly accept the offer with serious caveats given the gap between the funding on the table and the full cost of delivering NHS pharmacy services identified in the economic analysis.

‘The committee sees the offer as a first step towards sustainability, and we have been clear with government that we will hold them to their commitment to working towards a sustainable funding and operational model.’

Have your say on community pharmacy funding in England

Are you a community pharmacy contractor based in England? Let us know what you think about the new funding deal and be in with a chance of winning £200 vouchers.