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Are the incentives for Pharmacy First right?

Running Your Business

Are the incentives for Pharmacy First right?

Leela Barham looks into whether the incentives for the Pharmacy First offer are aligned so that the service can deliver on the promises made to free up general practice consultations 

Since well before the January 31 launch of Pharmacy First, the service has dominated the agenda in England, sparking the hopes and frustrations of a sector grappling with an updated care model. But three months in, how are the sums tallying up?

Significantly, the service is not necessarily immune to the loss making dispensing activity that is blighting contractors. Pharmacy First could lead to the dispensing of treatments that are loss making and make the incentives to cover some of the clinical pathways less attractive than others. There’s no extra money for dispensing treatments under Pharmacy First, with reimbursement rates set in the Drug Tariff as usual.

Wave Data Ltd, self-described as a UK pharma pricing expert, has looked at Nitrofurantoin, an antibiotic that can treat uncomplicated urinary tract infection (UTI) in women under Pharmacy First. Two tablet packs have been profitable for a while, since a boost to the reimbursement price from July 2023 (from around £3 to £14). But the market and reimbursement prices have since fallen and as of February this year were no longer profitable. A third pack, a 50mg capsule of Nitrofurantoin, has been unprofitable for over a year.

Among Company Chemists’ Association (CCA) members, close to a third of Pharmacy First consultations delivered in February 2024 were for uncomplicated UTIs. This makes it important that dispensing for this particular part of Pharmacy First is commercially viable.

Wave Data also looked at Mupirocin Ointment, a treatment for impetigo, another condition covered under Pharmacy First. In January this year, the market price was, on average, £8.85, allowing a healthy margin for contractors, with a reimbursed price of £16.04. Yet Wave Data warns about the variation in prices seen in the market, which means that the margin could be as low as £0.01.

The company hasn’t looked at all the products that Pharmacy First could lead to community pharmacies dispensing, but it told P3pharmacy that it’s a wider issue: “Category M products are the problem,” it says. “Their Drug Tariff prices are forced down so low that manufacturers can’t make a profit and withdraw.”

Wider picture

Considering the wider economic picture, can Pharmacy First really deliver on the promise to free up 10 million general practice appointments a year and deliver easier and faster treatment for patients too? With funding capped and only promised up to March 2025, coupled with some treatments having to be dispensed at a loss, it’s not clear that the incentives are set up to help Pharmacy First deliver.

The service got off to a flying start, with over 96 per cent of community pharmacies signed up to provide it.

There was money attached too. Getting going with Pharmacy First came with an initial fixed payment of £2,000, which could be claimed from December 2023 until service launch. Consultations are reimbursed at £15, with a monthly fixed payment of £1,000 for those who reach a minimum number of clinical pathway consultations. The minimum has been staggered over time: one in February 2024 but rising to 30 by October 2024.

NHS England is bullish on the potential of Pharmacy First, announcing that the service is expected to “free up GP appointments for patients who need them most and will give people quicker and more convenient access to safe and high-quality healthcare”.

An NHSE board paper adds more detail, suggesting that together with increasing the provision of the NHS Pharmacy Contraception Service and Blood Pressure Checks Service and investment in the digital infrastructure, Pharmacy First will save 10 million appointments in GP practices a year.

Cost control

Of course, the service is not a blank cheque to contractors. The Government has set out a limit to the funding for the clinical pathways part of the service, with a cap of 3,000 consultations a month per pharmacy from April 2024. New caps will follow, which will be set to deliver three million consultations a quarter across the sector.

The cap on funding is important because eventually, contractors will reach a point where the next consultation is not reimbursed. The trouble could well be that they won’t know exactly when that is because hitting that threshold will be a collective, not an individual, count of activity. The CCA suggests that Pharmacy First could save over 30 million GP consultations, yet the Government says that only 12 million will be paid for.

The Government’s position could reflect the uncomfortable reality that “savings” in the NHS are rarely cash-releasing; it’s not likely to be possible to pull lots of money out of primary care funding to pay for pharmacists helping to manage demand for their services.

It’s probably cold comfort to be told by the Department of Health and Social Care that the Government “has invested £645 million over two years to help community pharmacies, including providing improved IT and a wide range of guidance and support… more broadly, we support the sector with £2.6 billion every year”, in a blog on Pharmacy First.

Evaluation to come

Pharmacy First will be evaluated. Researchers from the London School of Hygiene and Tropical Medicine have a £2.4m contract to study its impact, safety and effectiveness over three years. The research will also look at cost effectiveness. Here’s hoping they consider incentives too.

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