The pharmacy community has quickly responded to the open letter from the Department of Health informing England’s community pharmacies of proposed cuts to the global sum of 6% from £2.8 billion to £2.63 billion, from October 2016, and their disquiet at “clusters” of pharmacies in some local areas.

“Unlawful” to use remuneration system to reduce the number of pharmacies

Adjustments to pharmacy funding through the remuneration system for the purposes of reducing pharmacy numbers could be challenged on a legal basis, pharmacy specialist lawyer David Reissner, of Charles Russell Speechlys has told P3.

“In my view, it would be unlawful to use the remuneration system to reduce the number of pharmacies. A lawful scheme for reducing pharmacy numbers would have to include a means to identify locations where there is a perceived surplus. A reduction would have to be achieved in a lawful and rational way, eg by specific regulation that might require compensation for giving up contracts (as happened when market entry regulations were introduced in 1987).

However, a judicial review, as has been attempted several times in Northern Ireland by pharmacy, would be the only route to challenging the lawfulness of the pay cut, he advised.

“The Secretary of State has a very wide discretion to determine pharmacy remuneration, but the discretion is not unfettered. The only way to challenge the lawfulness of the pay cut would be to apply promptly to the High Court for judicial review.

“Community Pharmacy Northern Ireland (the equivalent organisation there to PSNC) has successfully brought judicial review proceedings in Northern Ireland twice in recent years. On the first occasion the lord Chief Justice ruled that the Drug Tariff was unlawful and that pharmacy contractors are entitled to be paid fair and reasonable remuneration.”

On the second challenge, Mr Justice Treacy ruled that a determination of remuneration was unlawful, he said, based on a ruling that the Minister did not have sufficient information to know whether the remuneration set was fair and reasonable. “I acted for Community Pharmacy Northern Ireland and, indeed, I am acting for them on a third judicial review case where we are currently awaiting the judgment,” he commented.

Cuts could impact patient care and pharmacy services

The planned cuts to pharmacy funding could result in a “direct impact” on patient care, John Nuttall, chief executive of the multiple Well Pharmacy has suggested. Pharmacies may also be forced to reconsider services that they currently offer free of charge.

“It is my view that we do not have the capacity as an industry to take on further efficiency savings without a direct impact on patient care, which has to be our first and foremost concern.”

Pharmacy has already achieved efficiencies in response to pressure, he said. “We accept and are supportive of the collective, long-term vision that pharmacy must play in delivering primary care services. However, pharmacy is already under significant and severe pressure to improve efficiencies, many of which have already been absorbed: Evidence points in the last ten years to a 55% volume growth in prescription medicines dispensed through community pharmacies, yet delivered at an overall cost inflation of just 9%.

“Let me be clear that it will mean a compromise on the sector’s ability to provide existing discretionary services that community pharmacy, as an industry, delivers free of charge to the NHS every day.

The proposals should be reconsidered, said Mr Nuttall. “While we will continue to work with the government in a planned and considered way to shape a community pharmacy fit for the future, there must be reconsideration of the strategy to ensure patients remain protected.”

Community pharmacy already delivered 4% efficiency savings

In the face of cuts of a further 6% from next October, community pharmacy has already delivered 4% efficiency savings, Rob Darracott, chief executive of Pharmacy Voice has said. And further cuts will inevitably be damaging.

“Announcing a 6% funding cut to community pharmacy from next October over six months is certain to hurt the sector. Many contractors, currently in the midst of the Christmas rush, will be rightly anxious as to how this £170m cut will affect their patients, their businesses, their livelihoods and those of their pharmacy teams and other employees.

“Community pharmacy has already delivered 4% efficiency savings to the NHS which is proof that we already play a highly efficient part in NHS service delivery.

“It is a complex picture and there are many items being discussed from hub and spoke dispensing, the role for clinical pharmacy to pharmacy numbers. At this stage we do not have the detail of how these elements can affect the bottom line. What we do know is that the expertise and knowledge of how to achieve change is within the sector, rather than in Whitehall.

Discussion across the pharmacy profession will be needed to support community pharmacy through the changes, he said. “We will be working with our member organisations to agree how we best deal with these very challenging decisions. As recognised in the letter, we think it is a constructive step that, for the first time, Pharmacy Voice and other organisations will have the opportunity to engage in this process as statutory consultees. We will work with colleagues across the community pharmacy sector to ensure that the value of the network is retained and that negative, unintended consequences are avoided.”

Cuts are “short sighted” says Royal Pharmaceutical Society

The funding cut outlined in the DH letter ‘putting community pharmacy at the heart of the NHS’ was a “substantial” and “short sighted” reduction, said chair of the Royal Pharmaceutical Society’s English Board Sandra Gidley.

“The 6% cut will have a substantial impact on pharmacy business owners, their employees and locums. “The RPS English Board believes that any cut to community pharmacy, and primary care generally, is short sighted if the Government is committed to its stated aim of investing in primary care and prevention of ill health.”

The letter delivered clear signal to the profession for “a new role within primary care” she said, something that the RPS will be working with members to achieve.

“All of us in community pharmacy, through the forthcoming consultation on changes to the community pharmacy contractual framework have an opportunity to shape our own future. It is clear that the Government wants something different from the sector. If we choose to provide no answers to the questions we are asked then others will make decisions about our future. I am not going to allow that to happen.

“The days of secret negotiations between community pharmacy and Government are over, something I welcome wholeheartedly. For the first time the RPS will have a substantial role in providing a voice for those employees and locums who have felt completely disenfranchised by the current community pharmacy negotiating arrangements. I will be announcing in the New Year how you can make sure your voice is heard through the RPS.”

Investment in a "Pharmacy Integration Fund" a "Pharmacy Access Fund" was welcomed by the RPS. However, practical details about the future implementation of ‘hub-and-spoke’ arrangements needs much further discussion, said Ms Gidley. “If we are not careful, enthusiasm to embrace the digital age will result in uninformed choice and patients may miss out on the help and support that pharmacists and their teams can bring.”

Challenges are ahead to maximize the role of community pharmacy in changing times, she said. “We don’t underestimate the enormity of the challenge ahead. We will need to work with everyone in the profession to align and fit with the New Models of Care described in the Five Year Forward View which defines the working of the future NHS. We will be working with you to make sure we maximise the role of community pharmacy in the changing world of primary care.”

Closures faced by sector committed to patient care

Pharmacy contractors will be “reeling” from the announcement of cuts to pharmacy funding, said John D’Arcy of Numark. The decision could affect patient care, he said, and closures are “inevitable”. “Pharmacists have a proven track record in delivering first class service to local communities. This letter is a slap in the face to a sector that is committed to patient care and represents a clear disincentive to further investment in enhancing service delivery. More importantly it creates a real risk to the continuity and quality of services to patients.”

“Closures are now inevitable (that is clearly the intention) and, as always, independents will be affected disproportionately. Unlike the supermarkets, who can subsidise their pharmacies as a ‘loss leader’, and the multiples, who can spread the affect across the group, independent pharmacists will be left to shoulder the burden of a massive cut to their gross profit,” he said.

The important contribution made by community pharmacy should not be forgotten, he said. “Pharmacy has been told repeatedly by government about the important contribution it makes to healthcare in England. But to demonstrate this by imposing a minimum 6% cut in remuneration is not only nonsensical but an outright insult to a sector that has done so much to ease the burden on the NHS.”

The need for greater efficiency and productivity does not take account of ‘the absorption of year on year prescription growth of around 5%, the delivery of a plethora of locally commissioned additional health services and most recently, the commissioning of a national flu service,’ all of which have been delivered out of delivered out of “a global sum of funding which has not kept pace with inflation or real increases in cost,” he said.

Contradictions in funding cuts for pharmacy in England

Community pharmacy in England is faced with confusing leadership from the Department of Health, with messages encouraging pharmacy to grow their impact, but in the light of the announcement of significant cuts of £170 million for 2016/17.

NPA chairman, Ian Strachan, commented on the DH/NHSE announcement: “There is a fundamental contradiction in NHS England’s statement: it calls for community pharmacy to step forward to meet spiralling health challenges, whilst announcing cuts that will severely hamper our ability to deliver.

“The Government and NHSE should expect a very robust challenge to this misinformed set of proposals; they rest upon a questionable evidence base, unbalanced opinion, and ignore the truly transformational opportunities in community pharmacy. Most worrying of all, they imply that pharmacy is just a distribution mechanism for product – rather than a valuable health and social care asset at the heart of communities.

“Taken together, the statement looks like an assault on the very part of the health system that holds the key to solving many of its problems. Patients would be the biggest losers, if the combination of measures proposed in this statement come to pass. “The NPA and our members will not take this lying down. It could be a rocky road ahead, but the NPA will be supporting independents every step of the way.

“The fact that this news was announced publicly just before Christmas, at a particularly busy time for pharmacies, means it is heartless as well as visionless. It shows a lack of concern for a profession that gives its all throughout the year. Many people working in the pharmacy sector will be worried during this festive period about what the future holds”.

Stephen Fishwick, of the NPA, added that the announcement should prompt a “fight” for the principle of community pharmacy: “The government’s assumptions about how efficiencies may be made are really disturbing. The statement is all to do with cost and nothing to do with value. This is about more than money, we see it as a fight to keep the ‘community’ in ‘community pharmacy’.”

“The financials are very troubling for many of our members,” he said.