HDA Media And Political Bulletin – 21 October 2016
|The Department of Health has announced a new 2 year funding package for community pharmacy. Read the Government’s full plans here: ‘New plans to modernise community pharmacies’ and here: Community pharmacy reforms.
The parliamentary debate on the announcement can be found here.
Pharmacy plan ‘could lead to High Street closures’
The National Pharmacy Association and the Pharmacy Voice (reported here and here) have commented on the imposition of the cuts.
Brexit will increase drugs shortages and lower value of parallel imports
20 October 2016, PSNC
The Department of Health has granted the following price concessions for October 2016:
The price concession only applies to the month that it is granted.
Please note negotiations are still ongoing regarding a number of products.
No endorsements are required as these prices will automatically be applied to this month’s prescriptions.
When any NCSO or price concession announcements are made, these appear on the Generic Shortages page (psnc.org.uk/ncso) and are emailed to those subscribed to this mailing list.
The Government has announced a new 2 year funding package for community pharamcy. Read the Government’s full plans here: ‘New plans to modernise community pharmacies’ and here: Community pharmacy reforms
The parliamentary debate on the announcement can be found here.
House of Commons Written Questions; Pharmacy: Finance, 20 October 2016
Department of Health
Our assessments include consideration of the potential impacts on the adequate provision of NHS pharmaceutical services, including the dispensing of prescriptions and supply of medicines.
An impact assessment will be completed to inform final decisions and published in due course.
Our proposals are about improving services for patients and the public and securing efficiencies and savings. We believe these efficiencies can be made within community pharmacy without compromising the quality of services or public access to them.
Our aim is to ensure that those community pharmacies upon which people depend continue to thrive. We are consulting on the introduction of a Pharmacy Access Scheme, which will provide more NHS funds to certain pharmacies compared with others, considering factors such as location and the health needs of the local population.
House of Commons Written Questions; Pharmacy: Finance, 20 October 2016
Department of Health
Our proposals are about improving services for patients and the public and securing efficiencies and savings. A consequence may be the closure of some pharmacies but that is not our aim.
20 October 2016, PSNC
The Government has imposed a two-year funding package on community pharmacy, with a £113 million reduction in funding in 2016/17.
This will take total funding to £2.687 billion for this financial year. This is a reduction of 4% compared with last year, but it will mean that contractors will see their funding for December 2016 to March 2017 fall by an average of 12% compared with current levels.
This will be followed by a reduction in 2017/18 to £2.592 billion for the financial year, which will see funding levels from April 2017 drop by around 7.5% compared with current levels.
Read the Government documents outlining the package, including their impact assessment and a list of pharmacies eligible for the Pharmacy Access Scheme, here.
PSNC has published indicative income tables to help contractors to predict the impact on their businesses.
As part of the package the Department of Health (DH) will make changes to the way in which funding is distributed, introducing quality payments and a Pharmacy Access Scheme (PhAS).
Further information on these and on which pharmacies will be eligible for the payments is outlined in PSNC Briefing 057/16: Information for Contractors.
The Government has also recently announced a pharmacy urgent repeat medicines supply pilot along with plans to refer NHS 111 callers with minor ailments to pharmacies. The service specification for this is still under discussion but further details are also available in PSNC Briefing 057/16: Information for Contractors.
The imposition, which was announced by minister David Mowat in Parliament today (October 20th), comes after PSNC unanimously rejected the package last week.
PSNC could not accept a funding offer which was damaging to the sector and which will adversely affect the ability of pharmacies to provide patient care.
In response to the consultation on changes to community pharmacy, PSNC set out the need for the Government to make decisions about community pharmacy services based on a number of principles that put the needs of patients and communities, as well as evidence, at the heart of the process.
Sadly, this has not been the case, and we are instead now seeing the implementation of a decision for which no evidence has been produced and which many people, including patient and GP groups, have warned will have a detrimental effect on patient care and lead to further pressure on other healthcare services. This is a short-sighted and ill-judged approach to take, particularly when alternative constructive proposals that would address the need for the NHS to make cash savings have been put forward by PSNC.
It is a sad reflection on the NHS on which we all rely to see it taking such a rash decision with so little justification. But this is not the first time that we have seen decisions that do not seem to be in the best interest of patients or the NHS being made. NHS England’s decision to walk away from commissioning a Minor Ailments Advice Service last summer was damaging to the NHS and to patients. Such decisions call into question the judgement of those in control of community pharmacy policy.
In the past PSNC was able to have constructive negotiations with the NHS based on a mutual desire for community pharmacy to be commissioned and funded to deliver the best possible service for patients and local communities. These conversations were based on trust and respect that we had built up with policy makers over many years. It is very sad that real consultation with us has now been abandoned, and the approach through the last six months has instead been of an entirely different character; “we can do it, so we will do it”, seems to be the mantra. The lack of real consultation and clarity has been a common theme throughout the consultation period.
PSNC will study the Government’s decision carefully to inform our own decisions about next steps.
The funding cut, combined with the previously announced reductions to Category M prices following a significant over-delivery of margin last year, will have a significant and negative impact on contractors’ businesses. We would strongly advise contractors to make whatever provisions they can for the funding reductions. These will be very challenging times.
PSNC remains keen to work with the NHS on changes to the Community Pharmacy Contractual Framework that will allow the development of clinical community pharmacy services so that patients and the NHS can get the most benefit and best value from community pharmacy.
Although we are unlikely to see pharmacies closing immediately, we expect that pharmacy owners will be forced to take steps to reduce costs. These are likely to include reducing opening hours and staffing, and stopping the provision of services which they are not obliged to provide, such as home delivery of medicines and the supply of medicines in compliance aids. We are very concerned about the impact that this will have on patients.
We will encourage LPCs and contractors to get together to consider how they can ensure vital local services are maintained. They may need to approach local commissioners to seek funding for services where they are not able to cover their costs.
Impact on patients
They say a week is a long time in politics, but recently it’s felt like that’s just as true for pharmacy.
A quick recap for those of you who haven’t been glued to the C+D website over the last 10 days: On October 13, pharmacy minister David Mowat announced schemes to promote the sector’s urgent repeat supply and minor ailments roles. But community pharmacists barely had time to react before the Pharmaceutical Services Negotiating Committee dropped the bombshell everyone was fearing: the government is planning to bulldoze ahead with its funding cut in England – which will now amount to a 12% drop for December to March, followed by a further cut for 2017-18.
As I write this, official details of how this funding plan will be implemented remain scarce. But a leaked document suggests a promised “access fund” – designed to offer protection from the cuts for the most-needed pharmacies – will benefit just one in 10 businesses.
The only glimmer of hope: the Department of Health (DH) has exclusively told C+D that a “final decision” on the cuts has still not been made. This lent an added urgency to attempts by pharmacy’s political champions to press the minister to reconsider. But in an autumn that has already seen both Mr Mowat and NHS England chief executive Simon Stevens insist the sector must share the burden of the health service’s £22 billion savings, the outlook is bleak.
A deeper concern is the lack of a coherent policy behind these announcements. Surely any scheme to promote community pharmacy’s emergency supply role – which the National Pharmacy Association rightly branded a “smoke screen” for the cuts – will be undermined if pharmacies are forced to close?
If alarm bells weren’t already ringing, the DH told C+D last week that the funding cut should be seen in the context of its ambition to “invest £112 million to deliver a further 1,500 pharmacists in general practice by 2020”. In the words of one C+D reader, this justification is “complete nonsense”. While there are many benefits to giving GP practices greater access to pharmacists’ expertise, even its most vocal proponents have not suggested that this scheme would be a replacement for community pharmacies closing across the country.
Either the government doesn’t understand the difference, or it doesn’t care. At this stage, I honestly don’t know what is more worrying.
The Department of Health said it wanted to reduce the £2.8bn a year pharmacy bill by more than £200m over the next two years.
It has been suggested cuts on this scale could lead to up to 3,000 of the 11,700 pharmacies being closed.
Currently, the average pharmacy receives £220,000 a year from the NHS.
This accounts for between 80% and 90% of their income and includes a flat rate of £25,000, which nearly all pharmacies receive.
The changes being announced scrap that and put much more emphasis on performance-related funding, with ministers understood to see the current system as outdated and inefficient.
Figures previously provided by the Department of Health – it has been looking into the issue for some months – suggested the number of pharmacies had increased by a fifth in the past 12 years.
And it has said about 40% of community pharmacies are found in clusters – with three or more within 10 minutes’ walk of each other.
The pharmacy industry has been lobbying ministers in recent months, warning the move could put more pressure on GPs and accident and emergency departments, as pharmacists provide advice and support to patients.
But Health Minister David Mowat said the government had decided to press on despite these protests, as the current system was not the best use of “valuable” NHS resources.
“Far from jeopardising services, our modernisation package will help improve them,” he added.
He said special funds would be set up to support pharmacies in isolated areas and to help set up more in GP surgeries and hospitals, which would be “more convenient” for patients.
Ministers believe these two measures will help offset the closure of High Street pharmacies – it expects another 1,500 GP surgeries will have in-house pharmacists by 2020. These are much cheaper to run.
But Sandra Gidley, of the Royal Pharmaceutical Society, said she was “deeply disappointed”.
“We fear for patients, the public and pharmacists who may be significantly affected by changes in opening hours and staffing levels in community pharmacy, as well as the knock on impact on already pressured GP and A&E NHS care.”
And Shadow Health Secretary Barbara Keeley said the move would be “damaging” and lead to increased demand on the health service as well as pharmacies.
“The government’s plans are not only deeply unpopular, they are short-sighted and they will hit areas with the greatest health inequalities hardest,” she added.
Opposition parties attacked the announcement that more than seven per cent will be slashed from funding for community pharmacies over the next two years, after weeks of speculation.
They said the reductions could trigger the closure of hundreds, if not thousands, of badly-needed high street pharmacies and were a “false economy”.
There was also anger that health minister David Mowat was unable to say how many would be sent to the wall – even claiming it was possible that none would shut.
Norman Lamb, the Liberal Democrat health spokesman, said: “The Government’s belief that cutting funding for community pharmacies will improve efficiency in the NHS is a complete false economy.
“These myopic plans will further increase pressure on GP surgeries and hospitals that are already buckling under the strain of limited resources and unprecedented demand for services.
“More people will be forced to take unnecessary trips to their GP and even A&E, which is completely counter to NHS England’s vision.”
The Government has previously suggested that up to 3,000 pharmacies could close as a result of funding cuts.
But, today, Mr Mowat accused critics of “scaremongering”, saying: “It’s possible that none will close, I do not believe 3,000 will close.
“But I would say this – the average operating margin that a pharmacy makes is 15 per cent. That is after salaries and after rent.
“The cuts we’re making, or the efficiencies we’re asking for, is significantly lower than that.”
The announcement will see chemists will lose four per cent of their funding in 2016-17 and a further 3.4 per cent in 2017-18.
Former Conservative minister Michael Gove said: “Can I congratulate the minister for recognising what Labour failed to – that NHS money is taxpayers’ money and the priority should always be patient care, not the profits of private equity firms.”
This will amount to £419 less a month for pharmacies which currently receive the highest monthly payment of £2,092, the Department of Health (DH) said in a document released today (October 20).
The payments will fall by a further 40% on current levels from April 2017 – down to £1,255 a month for these pharmacies, it said.
All community pharmacies which dispense more than 2,500 items a month currently receive an establishment payment, but the DH reaffirmed that these payments will be “phased out” entirely over “a number of years”.
The DH’s document was timed to coincide with confirmation from pharmacy minister David Mowat that the 12% cut to the global sum would go ahead in December as planned.
Despite the DH telling C+D last week that no final decision had been made on the cut, Mr Mowat laid out the plans in the House of Commons today.
Mr Mowat confirmed the Pharmaceutical Services Negotiating Committee’s (PSNC) announcement last week that funding would drop by 7.4% on current levels for 2017-18, bringing the global sum down to £2.592bn.
Mr Mowat insisted the government “appreciates the value” of the pharmacy sector. But he stressed the current system does not do enough to “promote efficiency or quality”.
The DH also released an impact assessment of the funding plan today, which confirms “there is no reliable way of estimating the number of pharmacies that may close as a result of this policy”.
PSNC “unanimously” rejected the funding package last week.
£42m integration fund announced
Following Mr Mowat’s announcement, NHS England published details of its promised £42m ‘pharmacy integration fund’.
This will support pharmacy to “develop new clinical pharmacy services, working practices and digital platforms”, and result in “more integrated and effective NHS primary care for patients”, it added.
Pharmacy Voice described the government’s plans for significant pharmacy funding cuts as “incoherent, self-defeating and whole unacceptable”.
Chief executive Rob Darracott said the government appears “hell-bent on pressing ahead” with its policy and has “replaced warm words with increasingly aggressive rhetoric.
Jeremy Hunt told dispensing GPs of the publication of the details of the scheme today at the Dispensing Doctors’ Association 2016 annual conference, in a speech promising GPs financial and logistical support with developing out of hospital care and workforce development. Details of this speech will appear in our conference news section within a week.
In the pharmacy access scheme (PhAS) pharmacies dispensing up to 109, 012 prescriptions a year (around 9, 084 per month) and located a mile or more from another pharmacy will make a smaller efficiency saving than other pharmacies: 1 per cent in 2016/17 and 3 per cent in 2017/18. According to the DH, 1,356 pharmacies are named on this list, which can be downloaded here.
Pharmacies do not need to apply to the scheme to be eligible; eligibility has been calculated nationally, based on data relating to how many prescription items a pharmacy dispensed in 2015/16, and data relating to the distances between pharmacies.
Eligibility criteria include:
Other important details of the scheme include:
NHS Community pharmaceutical services funding levels and the PhAS beyond March 2018 will be subject to further consultation, which will include reviewing the PhAS and its effectiveness.
From December 1, 2016, pharmacies not eligible for the PhAS will be hit with a 4 per cent reduction in funding in 2016/17 and a further 3.4 per cent reduction in 2017/18. This equates to funding cuts of £113 million in 2016/17 and takes total funding to £2.687 billion for this financial year. According to PSNC, contractors will see funding for December 2016 to March 2017 fall by an average of 12 per cent compared with current levels.
This will be followed by a reduction in 2017/18 to £2.592 billion for the financial year, which will see funding levels from April 2017 drop by around 7.5 per cent compared with current levels. Dispensing GPs are not affected by the funding cuts, nor are their dispensaries included in the PhAS
From Factory to Pharmacy
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