Chief Executive’s blog: April 2021

By Chief Executive Simon Dukes

We have finally started negotiating Year Three of the Community Pharmacy Contractual Framework (CPCF) (2019-24) with the Department of Health and Social Care (DHSC) supported by NHS England and NHS Improvement (NHSE&I). Year Three is of course the year we are now in (2021/22) after a delayed start to discussions due to COVID-19. We know that Government is keen to proceed with the discussions at pace and we are conscious of past criticisms of PSNC as being a block to progress, but there is now a huge amount of work for us to do to analyse their proposals for Year Three – we would not be representing contractors well were we simply to agree to their proposals without assessment or challenge.

The bottom line is of course that we are very open to change and want to move the sector forward. But we represent the sector as a whole – every single one of you kindly reading this blog – and that means that we need to make sure that we get the best deal for the greatest number of contractors. I can make no apologies therefore if that means it takes longer than some would like. And while it may be a tall order, I hope that we can get the timing of our negotiations in 2022/23 back on track.

In addition, the negotiations this year are complicated by the COVID-19 pandemic and some critical unanswered questions. Key amongst them is the still-outstanding matter of the £370m loan and the sector’s COVID costs bill for 2020/21 now calculated at £450m. This is by far the biggest concern for most of the contractors and contractor representatives on the PSNC Committee. The Committee is deeply concerned about the lack of resolution on these COVID costs and they are worried about workload and finances in the year ahead: we will do all that we can to make this as manageable as possible. The Committee has also made clear to Government that while we are content to commence discussions on Year Three, we need clarity on COVID costs before we can move forwards. Resolving these costs has been urgent for many months, and it will be impossible to agree to further service developments or other arrangements for the next year without knowing the full picture of the financial situation that pharmacies will find themselves in. The Committee remains determined that contractors’ COVID costs must be covered.

Those of you who have been following our negotiations updates will know what we are up against in these and all negotiations: PSNC has already rejected one Government offer on COVID costs and there appears to be a refusal to recognise the health benefits we deliver. We have had no indication that the blocks we repeatedly face have gone away, despite the phenomenal efforts of pharmacies in the past year. These will be difficult discussions with the NHS challenging us on costs at every step (quite rightly), but ultimately reluctant to reward us for the value we deliver to patients.

So what can you expect from this round of negotiations? Much of it has already been trailed in the original CPCF Five-Year Deal document back in 2019. That includes all funding, service and other regulatory matters relating to this financial year, and alongside the core negotiations we expect discussions on hub and spoke dispensing between different legal entities and on reimbursement reforms to continue.

And when will you know the outcome? Our negotiations take the form of plenary meetings between members of PSNC’s Negotiating Team (which includes independent contractors and representatives of CCA and AIM companies) and officials, with much of the detail negotiated through working groups which have representatives from all sides. Any conclusions from these negotiations have to be agreed by the PSNC Committee. A huge amount of work goes on outside of these formal meetings to analyse data, consider the impact of proposals, structure PSNC’s arguments and decide on tactics. Over the past year we have considerably increased the amount of data we are collecting from pharmacies for use in our negotiations, and we will continue to use that data to support our arguments. All of this work is complex and time-consuming and as I highlighted above, we can expect the negotiations to take some months to conclude: progress will depend on the levels of agreement with the other side and on the progress of our COVID costs bid.

I know that you will all be keen to know more about our discussions – unfortunately, as ever, we will remain bound by Government confidentiality rules until their completion. What I can say is that we have an amazing story to tell about how community pharmacy has supported both patients and the NHS throughout the COVID-19 pandemic: the Government and NHS must listen to this, they must recognise it, and they must pay contractors fairly for it.