The National Pharmacy Association (NPA) has put forward five key 'tests' the government must meet within its funding offer to the community pharmacy sector and has once again threatened the risk of collective action.

Any funding settlement that the government offers the community pharmacy sector must meet rising costs, begin to bridge historic funding gaps, give a roadmap to a sustainable financial future and reform the Drug Tariff, the association has said today.

And NPA chair Nick Kaye said that members would begin 'working to rule' if negotiations do not begin this month and a satisfactory settlement is not offered 'immediately'.

The NPA said a new settlement offer must meet five tests:

1. Increased funding

The offer must be 'an above inflation increase in the global sum for pharmacies' that makes 'significant progress' towards mitigating 'devastating real terms cuts over the past decade'. It must also cover real terms cost increases in 2024-25 and 2025-26, including National Insurance and National Living Wage increases, the NPA said.

Earlier this week, Community Pharmacy England (CPE) said that contractors were in 'financial crisis' and warned: 'Without urgent help, the sector is close to collapsing.'

2. Payment in arrears

The association also called for pharmacies to receive payment in arrears for 2024/25 'as a matter of urgency in one lump sum to prevent further financial damage and closures'. And it said there must be 'no further clawbacks for the 2024/25 period'.

The NPA has previously claimed that the government owes the sector £108m per month for dispensing at a loss.

3. Equitable and transparent core funding, not dependent on other health providers

Core funding from 2025/26 should be 'delivered equitably and transparently', and should not be dependent on the actions of other health providers, the NPA said.

Pharmacy leaders have previously called for Pharmacy First to become a self-referral model, to reduce dependence on GP referrals.

4. Roadmap to reform the sector and the Drug Tariff

The NPA also called for the government to set out 'a clear roadmap to reform of the sector and the Drug Tariff'.

The NPA said this would enable the sector 'to deliver the government’s NHS 10 year plan ambitions to move care into the community', and would also 'restore pharmacies to a sustainable financial position'.

5. Mechanism to review funding regularly

The NPA also said that a new mechanism needs to be established for reviewing funding regularly, to ensure that funding increases annually 'at least in line with costs', and to avoid 'a repeat of the catastrophic huge real terms cuts of the last decade'.

'Patience has worn paper-thin'

NPA chair Mr Kaye said that patience had 'worn paper-thin', given the 'failure to commence consultations on the current year’s settlement' thus far.

He added: 'Pharmacies simply cannot wait any longer for a settlement that should have been agreed and paid a year ago.

'We’ve given the government ample time to respond to the very clear expression of professional concern expressed in our ballot – now’s the time to come up with a sensible settlement and a clear roadmap to the reform we all want to see.

'We stand ready to work with ministers and share their stated aims for our sector. But unless a settlement is offered immediately – and meets our modest and sensible tests – pharmacies will have no choice but to start reducing their services in order to protect patients and ensure there is a viable pharmacy network fit for the future.'

In an advisory ballot run by the NPA in England, Wales and Northern Ireland late last year, some 99% of participating pharmacy owners said they were willing to limit their services unless funding is improved.

Gordon Hockey, CPE director of legal, confirmed to The Pharmacist that until a new contractual framework is agreed, pharmacies remained subject to the NHS terms of service and the reimbursement and remuneration payments set out in the Drug Tariff.

But he added that these payments 'need to be significantly higher, starting from the current financial year, 2024/25'.

'It is unacceptable that community pharmacy’s negotiations have not yet re-commenced since being halted for the General Election in May 2024 – putting services to patients and medicine supply at risk. Community Pharmacy England is deeply frustrated and angry by this,' he added.