Image: National Pharmacy Association

The future of 3,000 community pharmacies hangs in the balance as a round of cuts starts to be imposed on them this month, despite earlier hints of compromise.

The cutbacks to key pharmacy service subsidies – part of a 12% reduction in overall money allocated to the sector - were first announced in December 2015 and a row has been underway ever since. In September, minister David Mowat appeared to back away from the cuts. But the following month the reductions were confirmed.

The cuts coincide with longer-term concerns over a planned online centralisation or ‘Amazonisation’ of high-street pharmacy care in England. 

Perplexingly, there appears to be no way of knowing which pharmacies will be forced to close, nor what the government’s rationale for the distribution of the reduced public pharmacy spending is. Rural practices are set to be hit particularly hard.

“The government doesn’t know the impact of its own impact assessment”

Under the new funding measures, the Establishment Payment – a lump sum that covers most basic pharmacy services - will be phased out over next 4 years, with a 20% cut over the coming year. Along with a Professional Fee, a Practise Payment and a Repeat Dispensing Fee pharmacies receive, the Establishment Payment is being merged into one Single Activity Fee.

An accompanying Quality Payments scheme, which will be included in the 2017/2018 Community Pharmacy Framework, is very similar in nature to the QOF payments that currently exist for GPs. The payments reward ‘high volume’ practices (particularly monopolies and chains like Boots), since they encourage box-ticking and introduce a regulatory burden on smaller pharmacies where there is less of a paperwork-processing apparatus in place. Independent practices will be hardest hit.

The Department of Health has said it wants to avoid “clusters” (pharmacies within 10 minutes walk of each other). But Kieran Eason, whose Tamworth practice is one of many that could lose out as a result of the new measures, says the government is failing to look at why there might be a high number or concentration of pharmacies in certain areas of the country. “It could, for example, be down to serving different patient groups” he points out.

Sue Sharpe, head of the Pharmaceutical Services Negotiating Committee, has said the government policy is “not being driven by evidence”.

A political storm has been brewing - Norman Lamb called the cuts a “false economy”, and Labour MPs have been vocal. Shadow Health Secretary Jon Ashworth berated Mowat for his weak defence of the cuts in Parliament and warned that some communities risk being left without a pharmacy.

The Department of Health’s initial letter to Sharpe in December 2015 was full of claims that we now know to be misleading – like the now debunked £10 billion spending increase and the supposed push for a 7-day service which in fact already exists – claims that merely attempted to sugar-coat its cut announcement without offering any clear rationale behind the proposals other than “efficiency savings”.

Pharmacists like Eason are unconvinced by the recent impact assessment. “They don’t know the [real] impact”, he comments. The impression is of a group of civil servants pushing through with the measures to meet a financial target (£22 billion is the overall figure) set by the Treasury, regardless of consequences.

The cuts are front-loaded into the first quarter of 2017. So there’s the possibility of a cash flow problem in the immediate short term as pharmacies struggle to pay their suppliers.

The National Pharmacy Association has also argued the cuts will compound winter pressures the NHS faces each year. This is arguably a situation the government could have foreseen, and could have better prepared for, since they’ve been planning these new measures for over a year.

Costs of the move towards chains and centralised online distribution

Aside from cuts, the market is extending its presence in pharmacy care through a variety of online distribution services. Sources close to Jeremy Hunt told the Times that the Health Secretary had “spoken privately of his desire to ‘Amazonise’ our pharmacies”.

The alternative, a hub-and-spoke dispensing model, seems to have been put on hold, leaving us with an Amazon-style system – whereby prescriptions would be ordered through a centralised online dispensing mechanism and delivered to patients' homes.

Such a system, crucially, removes the various human and social aspects of care carried out by community pharmacies. Instead the government are referring people to NHS 111, the already over-stretched non-emergency helpline, without explaining how they plan to fund the increased demand on that service that would result.

The worst case scenario is that people simply don’t call, and miss their prescriptions. “The [government] predictions are ridiculous and unrealistic...just window-dressing to mask the negative impact of the cuts”, comments Eason. 

There are concerns this online model could pose a number of risks to customers, particularly given the fact that most patients using community pharmacy are elderly. There are also privacy risks for customers ordering prescriptions through an online distribution service – as illustrated by the information-selling case that Pharmacy 2U found itself embroiled in last year.

Ramifications and full extent of cutbacks’ impact still not known

The All Party Pharmacy Group has launched an inquiry into the government’s reforms and their impact on community pharmacies and patient services, including the Integration Fund and the Minor Ailments Service. The group has already called for “further investment in community pharmacies to allow them to provide more health services and ease the burden on GP surgeries and hospitals”, in the words of its chair, Sir Kevin Barron.

The cross-party group of MPs is still awaiting the findings of the soon-to-be-published 2016/2017 King’s Fund review of community pharmacy.

There’s huge professional and public opposition to the reductions, as evidenced by an online petition which garnered over 2.2 million signatories earlier this year.

This latest funding measure represents yet another blow to the NHS as a public healthcare provider in England, at the end of a year which has seen: the forcing through of the widely opposed, unsafe junior doctor contracts; the Southern Health scandal; a growth and continuation of the existing corporate, market-driven culture at the heart of the NHS; and, most recently, a £700m sale of contracts to Virgin while media and public attention was fixed on the outcome of the US Presidential Election.