The community pharmacy negotiator has faced 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.

It was revealed this week that CPE had agreed a £3bn Community Pharmacy Contractual Framework, in a new deal for the sector for 2025/26.

Under the deal, a further £215m will be available for contractors to earn through Pharmacy First, blood pressure and contraception services, while a national emergency hormonal contraception service has also been commissioned.

But the IPA warned the deal had failed to provide an 'immediate cash injection vitally needed to help struggling pharmacies'.

They said the announcement 'provides pharmacies with little certainty over their future and will not
fully alleviate the immediate fiscal pressures the majority of pharmacies face after years
of underfunding'.

And they suggested: 'Had CPE not voted in favour of the DHSC and NHS England offer, the officials would have likely imposed the deal in April.

'However, we should not be in any doubt that the implications of accepting a funding deal, with the full knowledge of it being inadequate, rather than having it imposed is huge.

'An imposed contract can be contested, but an agreed deal cannot be contested.'

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The IPA said the increase to the single activity fee (SAF) was 'the only element in the new contract that adds some cash in contractor’s pockets'.

However, they warned the 'majority of this will be wiped by the increase in employer’s National Insurance, Business Rate increases and the rise in National Minimum Wage starting from this month'.

Though it added: 'We welcome and applaud the government’s commitment in [the] announcement to wanting to work in partnership with the community pharmacy sector as a crucial network at the heart of our local healthcare system.'

The IPA added: 'We hope the recently released economic review and its shocking outputs which illustrate the dire financial situation in community pharmacies will be fully taken into account for 2026/2027 community pharmacy contract negotiations. We look forward to working with the government and NHS officials to take this further and to bridge the funding gap created over the past 10 years.'

The economic analysis of community pharmacy in England, published last week, had suggested that current funding did not cover the full economic cost of providing NHS services for between 97.7-100% of pharmacies and that around 47% of pharmacies were not profitable in their last accounting year.

'Continuing to work with the government gives best chance for pharmacy'

Responding to the IPA’s concerns, CPE chief executive Janet Morrison, said: ‘No-one should underestimate just how difficult a decision this was for the committee to make.

‘On the one hand, this was a settlement offering the first significant increase in funding for the sector in 10 years and the highest across the whole NHS.

‘On the other hand, this uplift is not enough to fully stabilise the sector as evidenced by the economic analysis.’

She added: ‘But through these negotiations we have been able to shape how the additional funding is allocated, introduce regulatory changes to support pharmacy owners with some of the operational and capacity issues they are facing, and secure a firm commitment to work towards a sustainable funding model for community pharmacy.

‘We will be holding government’s feet to the fire to make sure that they follow through on this and all their commitments within the settlement.’

The committee had also been ‘very mindful’ of the government’s incoming NHS 10-Year Plan, as well as the ongoing government Spending Review.

‘The decision to continue working with government, with serious caveats about the remaining funding gap and the future, gives us the best chance of getting a successful outcome from that Spending Review, and for pharmacy’s longer-term future,’ added Ms Morrison.

'This was a very difficult decision for the committee'

Speaking to press ahead of yesterday's announcement, Ms Morrison she said accepting the deal was 'a very difficult decision for the committee'.

'They were fully aware of the interim results [of the economic review] and the final results of the funding gap, and that they took it very, very seriously,' she added.

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She admitted: 'I don't think it will save every pharmacy. There are people on the brink collapse. If you've got real cash flow problems, this isn't the magic pill that's going to solve it for everyone. We're certainly not saying that.

'But there's been at least 10 years of systematic cuts to the sector, and the thought that overnight that would be fixed in one go, I think maybe wasn't entirely realistic.

'The committee is made up of pharmacy businesses. They're not all sitting pretty. They're in exactly the same straits. They're facing the same challenges as everyone else that we represent. So they don't take that lightly, but they saw this as at least a first step to being able to do something about it.'

CPE: 'This is not the end destination'

In a statement on the funding deal, CPE acknowledged that the uplift in the new pharmacy contract 'is not enough to fully stabilise the sector as evidenced by the economic analysis'.

'What the settlement does do is to take a significant step in the right direction – towards stabilisation, and with recognition and acknowledgement of the funding gap from government, and their commitment to working towards a sustainable model.

'This is not the end destination. With these important commitments, which we will hold government to account for delivering on, Community Pharmacy England decided not to reject, and therefore to risk jeopardising, the injection of more than £800m into community pharmacies, which will now start flowing to pharmacies through the April drug tariff. This is money which businesses desperately need, and quickly,' CPE added.

Peter Cattee: 'Pharmacy contract negotiations were complex'

Peter Cattee, CPE negotiating team member, chair of the funding and contract subcommittee, and non-CCA multiple representative, said 'it was vital to secure monies which pharmacies desperately needed, and fast'. 

'That funding gap isn’t filled by this settlement and the negotiations were complex, but we have been able to shape how funding will be allocated to our advantage. We prioritised core dispensing costs and key strategic services to help get money to pharmacy owners via the best possible routes and, critically, did all that we could to make sure that all of the allocated funding will be spent on the sector,' he said.

Stephen Thomas: 'The government has shown it is listening to us'

And Stephen Thomas, CPE negotiating team member and CCA representative, said the 2025/26 pharmacy contract gives the sector 'a solid foundation to build on with a government that has shown it is listening to us'.

'Were we to have walked away from this offer – the highest uplift across the NHS – we would not only have risked the more than £800m in extra funding that is now going to be coming into pharmacies, but also our chances at effectively influencing longer term plans for the future for the benefit of community pharmacy.

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'Our reluctant acceptance – with very strong caveats about the funding gap as shown by the economic analysis – allows us the chance to work towards that future, while also signalling loudly and clearly to government that we will hold them to account on their commitments to work towards sustainability,' he said.

Kinnock: 'Reform has to come together with investment'

Also speaking to press ahead of yesterday's announcement, pharmacy minister Stephen Kinnock said: 'We are committed, of course, to supporting the sector, to getting it back onto an even keel.

'But we're also very clear that with all investment, reform has to come together with investments.

'I think the reforms that we set out in the announcement today will actually help to rebuild the sector without necessarily that being about money, because reforms that improve productivity, drive up efficiency, harness the power of technology, they can actually support and help the sector just as much as funding can.'