DHSC imposes Flat Fee removal from March 2024

The Department of Health and Social Care (DHSC) has today announced that it will impose a Flat Fee cut on pharmacy owners for March 2024.

The Flat Fee – which has been paid to pharmacies dispensing more than 101 items per month since April 2023 following the end of transitional payment arrangements under the five-year CPCF deal – will reduce to zero for March 2024.

This is a change being imposed by Government to prevent an expected small over-delivery of fees in 2023/24. The fee was previously £533 per month.

Although the total being recovered is small – around £5.7 million – Community Pharmacy England rejected this change in the strongest terms.

We argued that there must be no recovery of any over-delivered fees or margin given the intolerable pressures on community pharmacies and the extremely constrained core funding, which are now risking serious destabilisation of the market. This remains our firm position.

We also argued on technical points around the services forecast – which we believed would be affected by the launch of Pharmacy First – and the current threshold for pre-emptive action on fee delivery which we believe needs to be raised.

DHSC said the decision, determined by Ministers, has been made to recoup an expected over-delivery of around £5.7 million of fees (above the allowed over-delivery of £36 million which we had already negotiated would not be recovered) in 2023/24.

Preventing and recovering over-delivery was a requirement of HM Treasury under both the five-year CPCF deal and latterly as part of the commitment of £645 million to the sector for Pharmacy First and other services.

The NHS Business Services Authority (NHSBSA) will implement this imposed change from 1st March 2024.

View the announcement on the NHSBSA website.

Janet Morrison, Community Pharmacy England Chief Executive, said:

“We have made clear to DHSC and the NHS the devastating consequences that the ongoing funding squeeze is having on pharmacy businesses. In that context, it is inconceivable that there should be any reduction in the rate of funding delivery: imposing this change is yet more bad news for pharmacy owners.

“We are continuing to warn Government and the NHS that while the Pharmacy First funding is welcome, they must not let the core structure beneath it collapse: pharmacies cannot deliver Pharmacy First if they cannot keep their lights on.

“Enforcing a severely underfunded contract is already having dire consequences for many communities as pharmacies close, and continuing to underfund the network to the tune of £1.2 billion will soon push it beyond breaking point: Government must change course to prevent this from happening.”

Next week Community Pharmacy England’s annual Pressures Survey will launch – please do take part in this so we can that we can keep sharing this important evidence with Government. We are also continuing to brief Parliamentarians on the very critical situation that pharmacies are in: pharmacy owners can support that by writing to their local MP using the updated guidance here: Guidance for writing to your MP