NHS England, the Department of Health and Social Care (DHSC) and the Pharmaceutical Services Negotiating Committee (PSNC) have agreed the arrangements for the Community Pharmacy Contractual Framework (CPCF) in 2022/23 and 2023/24.

The PSNC said that the agreement is in line with the five-year CPCF deal but includes an extension of the transitional payment of up to £70m per year, and a one-off £100 million excess margin write-off for contractors. This means that Drug Tariff prices will be relatively higher in the new year, allowing the sector to keep an additional £100m that would otherwise have been paid back to the government.

Peter Cattee, Member of PSNC’s Negotiating Team, Chair of PSNC’s Funding and Contract Subcommittee and Managing Director of PCT Healthcare, described the write-off as ‘a critical achievement’.

‘Going into these negotiations we knew that over the past two years the sector had earned more than our allowed £800m margin: in effect, a debt to Government,’ he said.

‘On top of all the other pressures, a reduction in margin over the next two years just could not have been absorbed and would have put cashflow catastrophically at risk. This is why we had to address this in the CPCF negotiations and we were able to eventually get agreement from Government to write off £100m in margin. This was a critical achievement and means that pharmacies will be allowed to earn £100m more in margin than they would have been over Years 4 and 5.’

In addition, a new Pharmacy Contraception Service will be launched as part of Health Secretary Dr Thérèse Coffey’s plan to ease pressure on GPs. This will have a phased launch as an Advanced service over 2022 and 2023, ‘in line with the sector’s ambitions, but recognising the capacity pressures on pharmacies’, according to the PSNC.

NHS England, the DHSC and the PSNC also agreed on ‘modest expansions’ to the Community Pharmacist Consultation Scheme (CPCS) and the New Medicine Service (NMS). The service specifications for the Blood Pressure Check Service and Smoking Cessation Services will be amended to allow delivery by pharmacy technicians.

The scope of the Pharmacy Quality Scheme (PQS) has been reduced, ‘to reflect the workload and capacity constraints, including the impact of the late start in Year 4’. Details of the PQS in year 5 will be published in due course.

In advance of the next CPCF negotiations, an independent economic review of community pharmacy businesses will take place. The PSNC said that it believes that this ‘will demonstrate the scope and scale of the unsustainable pressures on the sector.’

The DHSC has also committed to review the implementation of the price concession system, which the PSNC has said is ‘‘no longer working for contractors in the current volatile medicine supply environment’.

PSNC Chief Executive Janet Morrison said that in the context of an ‘uphill battle’ and ‘public spending being squeezed very tightly’, ‘we are pleased to have improved on the original offer from the NHS and Government as much as we did.’

She said that the ‘crucial’ £100m write-off and protection of the transitional payment would ‘help compensate for rising pressures’, as would the reduction in scope of the PQS and the pace of rollout of new services.

‘Rejecting this deal would have lost all of these benefits for contractors, as well as ruining any chance of a more constructive relationship with our new Government, which was simply not an option.

‘We know this deal will not address all of the serious challenges facing contractors and that is why work continues apace. We are raising our concerns at the highest levels, writing to the Prime Minister and Secretary of State as they were appointed, and we will be seeking urgent financial help for the sector to come from outside CPCF funding. As well as this funding help, we are seeking a range of measures to make day-to-day life for pharmacy teams easier. We are also starting collaborative work on a new vision and strategy for the sector and ramping up our wider influencing work to put us in a stronger position ahead of the start of the next CPCF negotiations.’

‘We must find a way to turn the dial in pharmacy’s favour and to ensure that the vital service we provide to patients and the health service is recognised and valued in our funding settlement.’

Ms Morrison emphasised that ‘community pharmacy, if properly funded and supported, can play a vital role in relieving pressure on the NHS, supporting its recovery and delivering better outcomes for patients.’

Mr Cattee added: ‘Despite the retention of £100m, and our need to accept it, we know this deal is still not enough for contractors – it continues the apparent Government and NHS policies to squeeze the sector as hard as they can, and it’s this entrenched approach that we must tackle. The independent economic review will help us to do that, but in the shorter-term we need policy-makers to understand that their refusal to uplift the five-year deal has consequences – for our businesses, our patients and local communities. Without a change in approach, the service degradation and disruption that we are already seeing will continue.’