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The National Pharmacy Association (NPA) has called for “urgent talks” with the Government over a pharmacy contract in England that is “broken beyond repair and not fit for purpose” despite a 10.3 per cent increase in the sector’s funding for 2026-27. 

The NPA, which represents 6,000 independents pharmacies, said most of the £340 million increase in funding will be swallowed up by increased costs such as national living wage contributions, inflation and business rate rises “rather than addressing chronic under-funding”. Pharmacies have also been dispensing medicines at a loss.

The deal for 2026-27, announced today, will see funding increase to £3.636 billion while retained margin has risen from £900 million to £1.1 billion. The NPA said its analysis showed 8.9 per cent is needed for pharmacy budgets “to just stand still” and the latest settlement “is only 1.3 per cent higher than this”.

It said it will launch a poll of its members to “understand the impact the new deal could have on community pharmacy's ability to invest in NHS services and the need for reform in light of record numbers of pharmacies closing in England”.

In what might be interpreted as criticism of Community Pharmacy England (CPE), given concerns about secret voting on its committee and communication between its negotiating team and committee members, the NPA also called for “more transparency in a system currently shrouded in secrecy with little input from pharmacies or their representative bodies”.

Not persuaded sufficient investment is being made for independent prescribing

The new deal will see independent prescribing (IP) added to Pharmacy First and the pharmacy contraception service (PCS) in the autumn and includes a one-off set-up payment of £500 when a pharmacy owner has signed up to provide the services, as well as a monthly infrastructure payment of £525 in addition to the usual Pharmacy First or PCS consultation fees.

However, CPE said although it accepted the terms, it was “not persuaded that sufficient investment is being made to enable the full and effective introduction of IP, given the workload, enhanced clinical responsibility, clinical governance and infrastructure requirements that it will entail”.

NPA chair Olivier Picard echoed those sentiments, insisting current funding will leave many pharmacies struggling to make the most of an expanded prescribing service unless Labour commits more money to support its roll-out.

Insisting “pharmacies cannot sustain yet more loss-making work”, Picard said: “Independent prescribing enables pharmacists to deliver accessible, high-quality care to patients on their doorsteps. Expanding prescribing services available for patients and using the skills pharmacists have already is a common sense move.

“However, although this points in the right direction, it is nowhere near ambitious enough to transform patient access to care, nor make full use of pharmacists’ skills and qualifications beyond minor ailments to manage long term conditions.”

Picard said he hoped the deal will bring “immediate relief to pharmacies being hit by crippling new costs” and suggested it contains “some important measures and reduces uncertainty for the sector”. However, he warned it “does very little” to close the £2.6 billion funding gap identified by an independent economic analysis last year.

Rejecting Labour’s offer ‘would not have helped any of us’

Fin McCaul, who sits on CPE’s negotiating team and committee, said rejecting the Government’s offer “would not have helped any of us”.

“It would have shown our discontent, and possibly made us feel good for a moment, but it would not have eased the rising costs and demands we are facing,” he said.

“Worse, it could have reduced the funding available from next April, as ministers might have de-prioritised the sector amid so many competing pressures on health budgets.”

Picard called on health secretary James Murray to meet the NPA “urgently so we can deliver the real reform to the frontline that patients want, pharmacies need and the Government says it is committed to delivering”.

“It is clear the contract between pharmacies and the NHS and the means by which it is agreed with the sector now requires urgent and fundamental reform, if the Government is to deliver on its promises,” Picard said.

He added: “We need to focus on long term reform of the pharmacy contract to open up fairer funding, with pharmacies no longer subsiding the nation’s medicines bill and an end to the scourge of indiscriminate clawbacks, opening up new opportunities to provide more services to patients.”