The financial woes of the NHS are driving irrational and untested decision-making by the Government, according to PSNC chief executive Sue Sharpe. “As far as pharmacies and their communities are concerned, they’ve got it wrong,” she told the LPC conference in Manchester.

The outlook for contractors in the immediate future is bleak, she warned. Some pharmacies facing severe cash flow problems as a result of the swingeing cuts and margin recovery have moved into unviability and “may struggle to survive”, a situation that hasn’t happened for decades.

The grim situation was not helped by “berserk” market volatility over the summer, with medicines shortages – the number of concessionary prices hit a record high – price increases and category M cuts amounting to £15 million a month from August all combining to hit the sector hard.

“Contractors are in for an exceptionally difficult period,” she said. It will be summer 2018 before reimbursement prices are expected to rise.

She conceded that the 15p per item increase in advance payments agreed with pharmacy minister Steve Brine for November alleviated the worst of the cash flow dip for some contractors, while not providing “anything like the smooth delivery of income” that businesses might have hoped for.

No negotiations have been held so far with the Government for the 2018-19 financial period, although PSNC did have a “very positive” meeting with the minister in October. “However, we need to get some meat on that,” Ms Sharpe remarked.

Lost years

Community pharmacy had lost “two precious years” of potential development since negotiations broke down with the Department of Health. PSNC has asked Mr Brine to restore proper collaborative working. “We have no idea whether we are going to get a negotiating mandate to move forward. For the last two years we have had nothing,” she said.

Looking to the future, Ms Sharpe described myriad threats to the sector ranging from internet warehouse dispensing to the possibility of national contractual arrangements for basic supply only, with pressure for clinical services commissioning to be transferred to local level.

“Community pharmacy’s challenge is to prove the value of the care it provides. We need more evidence and data on how people use pharmacy now. We also need to change the funding model from units of supply to delivery of care.”

Pharmacy must exploit opportunities from building relationships with GPs and others and understand what commissioners need – and plan to address those needs.

In her last speech before retiring as chief executive, Ms Sharpe said PSNC must respect its recognition as representative of the general body of chemists. “This is the foundation for our national role”. She received a standing ovation at the conclusion of her speech.

Contractors are in for an exceptionally difficult period