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Pharmacies forced to ‘pay out of pocket’ for NHS drugs in struggle to stay open

Community pharmacists are struggling to stay afloat due to an “utterly broken” Government-funded system for covering the cost of patients’ medicines, industry leaders have warned.

Widening shortfalls between the price of some medicines and the amount that pharmacists are reimbursed for them via the NHS Drug Tariff means that many are operating at a loss, pharmacy leaders said.

The National Pharmacy Association (NPA), which represents around 5,000 independent pharmacies, said that many community pharmacists are paying out of their own pockets to ensure patients get the medicines they need.

Some pharmacies are being underpaid by as much as £75 per pack of medication, the NPA said.

Community Pharmacy England told i pharmacy teams spend hours each day trying to source patient medicines that are cost effective.

Olivier Picard, a pharmacist in Berkshire, told PA that the discrepancies between the medicine prices and reimbursement costs are “huge”.

Mr Picard added that some months he is out of pocket by £4,000 because of the discrepancies in the cost of medicines and the amount he can claim back.

“The number of products that we cannot purchase under the reimbursement price is increasing and increasing, and the prices that we are seeing… the discrepancy is so huge,” he said.

“A couple of months ago, we were losing £20 a packet on a medicine for stroke prevention. The next month, we lost money on something that you give as an antidepressant.

“There are some months where I am out of pocket by £1,000 pounds per pharmacy – I have got four pharmacies.

“It is not a sustainable model. It is not something that I can continue doing.”

The funding gap between drug costs and how much pharmacists are paid for them

The NPA conducted a snapshot survey on 7 October of drug prices from pharmacy wholesalers and compared it to how much pharmacies are reimbursed through the NHS Drug Tariff, funded by the Department of Health and Social Care.

Some of the NPA’s findings:

  • Amantadine, a drug to treat the symptoms of Parkinson’s, cost pharmacies £94.05 per pack to buy from suppliers, but the drugs tariff pays £18.06 per pack. The NPA said that a pharmacy dispensing this medicine to a patient would lose £75.99 per 56 tablet pack.
  • Escitalopram, a common anti-depressant, cost pharmacies £9.08 to buy from suppliers but they are paid £1.72 to dispense a pack.
  • Anti-anxiety medication Lorazepam costs £10.75 to buy from a wholesaler but pharmacies are paid £3.16 to dispense it.
  • Pharmacies can buy etoricoxib, an anti-inflammatory drug to treat conditions such as rheumatoid arthritis, for £19.47 from their supplier but they only receive £6.75 to dispense the medication.

An NPA poll conducted this year revealed that 85 per cent of community pharmacies say that they “often” make a net loss on NHS prescribing.

Its survey of around 500 small independent community pharmacies also found 36 per cent feared they will be forced to close within a year due to financial pressures.

Paul Rees, NPA chief executive, said: “It is nothing short of a national scandal that pharmacies have to dig deep into their own pockets just to cover the cost of basic medicines that they dispense to patients in need of treatment.

“No other health professional would be asked subsidise a key NHS service. The system for funding the medicines upon which millions of patients rely is utterly broken.”

Mr Rees said pharmacists are “left tearing their hair out” and turning to “desperate measures” such as raiding pension savings because of the inadequacies of the system.

He called on the Government to “step in now to halt pharmacy closures, fix the broken funding system and deliver a new deal for pharmacies”.

Janet Morrison, chief executive of Community Pharmacy England, said: “Community pharmacy teams spend hours each day trying to purchase medicines cost effectively for the NHS, but market instability in recent years has been pushing up prices.

“On top of this, pharmacy owners have seen many other business costs grow whilst their base NHS funding has been cut in real-terms, with many struggling to stay afloat.”

Ms Morrison said the Government “must address these challenges urgently” to protect access to medicines for pharmacies and the patients they serve, and ensure pharmacies “aren’t left subsidising the NHS medicines bill”.

Malcolm Harrison, chief executive of the Company Chemists’ Association, said: “If a Drug Tariff price is found to be significantly lower than the market price, the Department of Health and Social Care will occasionally introduce a temporary higher price (price concession) to help protect supply.

“It’s telling that in September 2024 alone, 144 price concessions were granted.”

i contacted the Department of Health and Social Care for comment.

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