New contract: half full or half empty?


New contract: half full or half empty?

Time to be realistic

With the expectation that it could have been much worse, some may be relieved by the recent NHS England pharmacy contractor settlement announcement, while others have been seduced by the mention of clinical services. 

Yet, what the package fundamentally delivers is disappearing margins, five more years of the same stress trying not to lose money when dispensing prescriptions. Except, while annual income may remain constant, inflation won’t and the squeeze continues unabated – who knows what impact Brexit will have. Worse than that the workload is set to increase.

Looking at the figures, it could just be some fiscal sleight of hand: shifting the same money from establishment payment and medicines use reviews (MURs) slowly to new services over 5 years.

Let’s face reality, this can’t be a contract for clinical services if a large chunk of income (£800m) still comes from retained margin, so contractors will still need to chase volume to get their fair share of that. That has not changed. At the same time, they will also have to find time to participate in the new clinical services and the new NHS Community Pharmacist Consultation Service.

Community pharmacy is still inexorably tied to the volume that hinders development, and unless the technology solutions mentioned in the contractual framework documentation  are implemented within the 5-year period, things are going to be tough. There is of course the suggestion that it might be commercially beneficially for some pharmacies to consider consolidation with local competitors or branches of the same chain…. 

So, you can see where this is going. Fewer pharmacies offering more clinical services. It’s actually difficult to argue with that. It’s the unplanned nature that’s the issue – who will survive the peaks and troughs of monthly payments, not to mention the stress and anxiety? Let’s hope NHSE’s promise to improve reimbursement arrangements to deliver smoother cashflow comes to fruition, and soon. 

If the contract develops where the £800m slowly shifts to pay for clinical services, change may happen more quickly. Then high volume online companies can do the mechanics (except acute medicines), while pharmacies get more clinical. Community pharmacies could become collection points for medicines in order to retain that important link, while hubs (owned by others or contractor cooperatives) deliver to them.

There is a glimmer of optimism, but the arduous trek to the promised land certainly isn’t for the faint hearted.


Ross Ferguson


Time to be strategic

The devil is usually in the detail, but this time it’s also in the assumptions and, importantly, what’s missing. For that, you need a bigger picture than the workload margin calculation that has driven the current model into the ground. What if the powers that be are really serious about reframing community pharmacy as an integrated part of primary care? Could urgent care services be the gateway to a very different future?

So, what if we assume NHS England’s investment in medicines optimisation pays off? That clinical pharmacist-led structured medication reviews, the medicines optimisation in care homes (MOCH) scheme, the National Overprescribing Review and the new English Deprescribing Network, reduce the total amount of medicines prescribed, and the number of prescriptions? 

In some parts of the country, volumes are already trending down slightly. What if they drop by 10 per cent or even 20 per cent? Add in the incentives to innovate through the use of technology – big win patient safety, ask anyone using a robot – and concerns over workload get mitigated fast. And what might a 10 per cent drop in volume do to the margin calculations? 

But what if the commitment to “work on a range of reforms to reimbursement arrangements” includes radical options, in which period of treatment (and payment) is linked to evidence of what works for patients, rather than the random decisions of prescribers? The announced shift to original pack dispensing and medicines reconciliation services could be just the start. 

What’s missing? This is a national contractual framework. It does not include other things, like flu vaccinations. Or locally commissioned services that might arise from community pharmacy integration into primary care networks, where the £4.5bn investment in primary care is going. Some LPCs are on the case already. They know there’s power to add.    

There is, of course, a sting in the tail. What if the urgent care services are a test? They are a very different model of service provision, one which is commissioned by the NHS for individual patients, one at a time. They look, at first glance, a poor substitute financially, for the loss of MURs. But what if, this time, the vast majority of community pharmacies show they can deliver a safe, clinical service, producing real outcomes as part of an integrated pathway. And can therefore do more of the same?

What might that do to your assumptions then?




Rob Darracott


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