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Leela Barham suggests the real objective of the new Community Pharmacy Contractual Framework is a downsized sector

“Community pharmacy receiving the largest uplift in funding across the whole of the NHS.” This was the first bolded text that Community Pharmacy England (CPE) led with on 31 March when t piublished the Community Pharmacy Contracutal Framework (CPCF) arrangements for 2024/25 and 2025/26. 

This was followed by: “Government has given the firm commitment to work towards a sustainable funding and operational model for community pharmacies.” The government echoed the statement: “All parties want to work towards a sustainable contract and operational model.” Sustainability is an oft-used word these days. It means, according to Oxford Languages, “the ability to be maintained at a certain rate or level”. So, should we take it that the policy aim is to maintain the current community pharmacy network in England?

Funding history 

The first CPCF, the forerunner of today’s CPCF in having a more service-orientated approach, was introduced in 2005. Back then, sustainability didn’t feature explicitly but as early as 2008/2009, additional funding was sought and given, worth £150m to “help contractors and maintain stability of funding,” according to CPE. 

By 2015, the global sum for community pharmacy was cut by over £200m. Further cuts came along and an analysis by Professor David Taylor, commissioned by the National Pharmacy Association, found that community pharmacies in England were receiving 25 per cent less in 2022 than they were in 2015. 

That work also pointed to evidence from Ernst and Young that in 2020, one in three community pharmacies in England were operating in deficit. 

Funding gap in 2023/24 

Frontier and IQVIA’s economic review of the sector is the most recent work to look at the sustainability of the sector. A definition of sustainability given in that work is bespoke to community pharmacy: “Sustainability refers to the comparison of funding with full economic cost to indicate whether NHS pharmaceutical services, as currently configured, can continue to operate on a long-run basis.” 

The report compares the full economic cost of NHS pharmaceutical services to available funding and gives a central estimate that these costs exceeded funding in 2023/24 by £2.308 billion. 

The report concludes: “This suggests NHS pharmaceutical services (taken in total) are already not currently sustainable in the short-run for a large proportion of pharmacies and for a greater proportion when taking a long-run view. The likely consequences – absent of intervention – include the risk of pharmacy closures, shorter opening hours, and pharmacies choosing to offer a reduced range of services.” 

Policy ambition vs reality 

The reality has been a smaller network of community pharmacies over time in England. The Company Chemists’ Association highlighted in April 2024 how there was a record loss of 432 pharmacies over the previous year. Add in examples like that of a pharmacist putting in £2,000 to £3,000 of his own money to keep his pharmacy going as recently reported, plus rising costs from national insurance, more closures seem likely. 

It is hard to believe that the government could really think that the network can continue to be sustainable as it stands. It’s much more believable that the policy ambition is for a smaller network. 

Perhaps more speculative, but it also seems that the government prefer that contractors experiment with new ways of working without a government safety net, letting the network find its own path to sustainability. 

That’s because even a smaller network alone won’t necessarily mean sustainability. It will matter not just what the NHS pays for, but how. Making any pharmacy profitable in the second half of the 2020s is likely to need a relentless focus on efficiency.