Contractor Announcement: Funding negotiations result in five-year CPCF deal

Contractor Announcement: Funding negotiations result in five-year CPCF deal

July 22, 2019

Contractor summary:

Other key elements of the deal can be summarised as follows:

  • The five-year deal represents a series of agreements in principle, with detail of new services and payments to be negotiated on an annual basis by October each year.
  • Although the overall quantum of funding and the key elements within that have been agreed for 2019/20, accelerated discussions are ongoing and further details will be made available to contractors over the coming months.
  • From October 2019, there will be some immediate structural changes to funding including the phasing out of MURs and the Establishment Payment, but these monies are being reinvested into the sector.
  • Contractors will receive monthly transitional payments in the second half of 2019/20 and again in 2020/21 in recognition of costs associated with changes such as integration into Primary Care Networks, preparation for Serious Shortage Protocols and implementation of the Falsified Medicines Directive.
  • Contractors can earn additional payments for meeting quality targets under the renamed Pharmacy Quality Scheme (formerly the Quality Payments Scheme).
  • A new national NHS Community Pharmacist Consultation Service is being commissioned from this autumn, which will bring together the national NUMSAS and local DMIRS pilots into one national service.
  • An increasing use of technology and other enablers, to seek to make the dispensing process as efficient as practicable.
  • Other elements of the deal include the continuation of the Pharmacy Access Scheme (PhAS) and the use of the Pharmacy Integration Fund to fund pilot services which may, if successful, be commissioned nationally from pharmacies.
  • All agreements are outlined in a joint CPCF Agreement Document.

PSNC, the Department of Health and Social Care (DHSC) and NHS England and NHS Improvement (NHSE&I) have reached agreement on a five-year deal for community pharmacy.

The deal sets out what pharmacies will be expected to deliver through the Community Pharmacy Contractual Framework (CPCF) from October 2019 through to 2023/24.

It includes a clear vision for the piloting and introduction of new pharmacy services – such as the NHS Community Pharmacist Consultation Service (CPCS), being introduced ahead of this winter – over the course of the five years. This will bring pharmacy into a more integrated central role within primary care and it enables the sector to help to deliver the ambitions set out within the NHS Long Term Plan.

Crucially, following strong representations from PSNC about rising costs for pharmacies, the deal secures funding for five years over this period of change. The deal will be reviewed on an annual basis, with detailed discussions on implementation and funding of new services each autumn.

This funding – which amounts to almost £13bn over the five years – is a significant increase on the Government’s planned funding level.

PSNC agreed to the deal following lengthy and difficult negotiations, recognising that while many community pharmacies are facing severe financial pressures, the deal puts the sector on a clear future path.

The deal provides pharmacy with opportunities to transform and prove our value; protected funding despite widespread Government austerity measures; opportunities to explore new funding models and to improve the delivery of funding to contractors; the chance to pilot and roll out new services; opportunities to look for new ways to make efficiencies and to further integrate within primary care; and, importantly, a new collaborative relationship with our key customers.

The proposals constitute a fundamental and challenging ‘change of ask’ for community pharmacy, but successful delivery will further benefit the NHS and the hundreds of thousands of people who visit and are helped by community pharmacies on a daily basis.

You can read further information about the deal below.

Discussions about services and funding for introduction from October 2019 are being accelerated and further information will be made available for contractors as soon as possible.

PSNC Contractor Events

To help community pharmacy contractors to understand the five-year CPCF deal and what it will mean for their pharmacies, PSNC Chief Executive Simon Dukes will be holding a webinar at 7.30pm on Wednesday 24th July. The webinar will include the chance to ask questions of the PSNC team and a recording of it will be available to view if you cannot make the live event. Sign up for the webinar here.

Beginning in late August, PSNC is also planning a series of events across England to help contractors to understand and engage with the new elements of the CPCF, including the NHS Community Pharmacist Consultation Service and the Pharmacy Quality Scheme (PQS). These events will also give contractors the chance to ask questions of the PSNC Negotiating Team. Event details will be available soon.

PSNC Statements

Simon Dukes, PSNC Chief Executive, said:

“The negotiations on the CPCF for 2019/20 began in April with an offer of a two-year pharmacy funding settlement from HM Government. Since that proposal was made, the discussions have been all-embracing.  After many hundreds of hours of negotiations, the PSNC Negotiating Team has been able to secure five years of protected funding and certainty for community pharmacy contractors.

Recent NHSE&I board finance papers revealed that the NHS fully expected a cut in community pharmacy funding to have been made in 2018/19 – with therefore a funding level in 2019/20 of lower than £2.592bn. Over the past four months, PSNC has put a considerable amount of data to DHSC and NHSE&I to demonstrate the rising cost base of the sector, as well as continually highlighting the value of pharmacy services, in order to try and persuade Government to reverse that planned downwards trajectory of pharmacy funding.  While we have not succeeded in getting an increase in the overall sum, we have secured a commitment from Government to a protected £13bn over five years.

A crucial part of the deal is the agreement of DHSC and NHSE&I to review the situation on an annual basis each autumn. These built-in reviews will provide real opportunities for us to monitor and consider crucial factors such as costs, service volumes, pharmacy income and sector stress, and PSNC will be using this evidence to make the case strongly for further investments in the sector. As a matter of urgency, we will be pressing DHSC and NHSE&I on their commitment to work with us to improve reimbursement and funding models. We will also be fast-tracking discussions with DHSC and NHSE&I to get contractors more details on the new Pharmacy Quality Scheme as soon as possible.

In an environment of austerity and increasing political and economic uncertainty in Government, protecting funding levels for the next five years has been no easy task. But this does not mean that PSNC took the decision to accept this deal lightly. The Committee is extremely concerned about the ongoing financial pressures facing many community pharmacies and about the ability of some businesses to adapt to the new asks being made of them. We absolutely recognise the scale of the challenge that HM Government is putting to pharmacies with its ambitious service development programme in a backdrop of rising costs.

For the benefit and future viability of the entire sector, this deal was the best scenario and it brings many key benefits for community pharmacies. It brings us into a better working relationship with our key customers and it gives us a shared vision for our future. The planned services will enable the sector to transform its offer and I hope community pharmacists will be pleased about the new roles they will be able to offer.  Importantly, the deal will better integrate the sector at the heart of primary care: giving community pharmacy a growing and indispensable part to play in delivering the NHS Long Term Plan.”

Gary Warner, Chair of PSNC’s Service Development Subcommittee and independent community pharmacy contractor, said:

“The introduction of the new NHS Community Pharmacist Consultation Service (CPCS) should be an exciting development for community pharmacies across England. Although delivery will bring big challenges – not least from the unpredictability of the workload, and the increasingly important role we will be taking on in managing patients and triaging for more serious conditions – the service is a positive development in our journey towards becoming providers of more clinical services.

PSNC is already consulting with colleagues from across the community pharmacy sector to try to ensure that the right support is in place for contractors. Further details and guidance are rapidly being worked out and will be shared with contractors as soon as possible. Recognising the challenge in preparing for the new service in the already short and busy autumn period, the funding structure agreed offers a significant incentive for those pharmacies who are able to be ready to offer it.

Over time, and particularly when referrals from GP practices are introduced in April 2020, the service will enable us to take the lead role in managing people with minor conditions on behalf of the NHS. This will have a positive impact in reducing pressure on urgent care services and, crucially, it will give us a core clinical role at the heart of primary care, with GPs and other services relying on pharmacies and sending their patients directly to us. As we prove our abilities, we will become more vital than ever to the success of the health service and to patients, and PSNC will be using our success to make a business case for further investment in the service and the sector in future years.”

Bharat Patel, PSNC Vice-Chair and independent community pharmacy contractor, said:

“Our priority in negotiating this settlement has been, as it always is, to get the best possible financial outcome for all community pharmacy contractors while also meeting the needs of patients and our customers, the NHS and HM Government. This will be an ongoing job as we work through the detail of some of the later service developments and monitor the delivery of funding; and we must also continue to look outside of the CPCF to ensure that community pharmacy is making the most of local opportunities and that the Pharmacy Integration Fund is used to its maximum potential.

As a pharmacy owner and Regional Representative on PSNC, I am very concerned about the precarious situation that many independent contractors now find themselves in. For some, this pressure is unlikely to go away as we work to take on new services and challenges, and as is inevitable with any national contract of this scale, significant changes can mean that some contractors stand to benefit more than others. Our priority through our work on legislative change will be to ensure that all pharmacies, whatever part of the sector they fall into, will be able to take advantage of changes that help to make them more efficient, and to consider new ways forward such as local consolidations and partnerships to work within Primary Care Networks.

I hope that this deal will give all pharmacy owners certainty about what the future holds for our sector so that they can start to plan and to make more informed business choices. I am pleased that we have been able to secure money to support some of the very great transitions that pharmacy businesses are going to need make to deliver the services now being asked of them. I am also hopeful that the Government’s commitment to work with us to try to smooth the delivery of funding will help to prevent the shocks to the system that we have seen historically.”

Clare Kerr, PSNC Negotiating Team Member and Head of Healthcare Policy for McKesson UK, said:

“As a member of PSNC’s Service Development Subcommittee, I was pleased that we have been able to agree with Government, a collective view for the development of community pharmacy services, noting how closely this matches the vision we had set out for ourselves as a sector in the Community Pharmacy Forward View. Pharmacies becoming healthy living centres, as well as being the first port of call for people with minor illnesses, are changes that we have been calling for, for some years. It is clear that we and our customer now agree on our future and potential, and this should be celebrated: the move towards a more clinical service offering is one that I hope many contractors from independents and multiples alike will want to embrace.

The challenge of course will be how to operationalise all of this, and this will be particularly difficult within a fixed funding settlement and with so many other changes and unknowns – from the possibility of Serious Shortage Protocols to the likelihood of another difficult winter – going on. The decommissioning of MURs, and the predictability of the income that they brought, will of course be another challenge and disappointing to many, but the NHS was very clear on this matter: it will not fund services that it believes offer poor value for money.

Our collective job then must be to do all that we can to prove the value of the new services that we are being asked to offer. Multiples and independents will face similar obstacles and many of the transitions ahead will not be straightforward for anyone. One of the key challenges will be the need to come together to try to collaborate more with each other and to work together to integrate our sector into the evolving Primary Care Networks. The Government have rightly recognised the need for community pharmacy to do this and that this will take time and therefore cost money; so, the Transitional payments to recognise some of these costs are welcome. I would urge all contractors, large and small, to look to one another to start this important work so that we, as a sector, ensure that we are making all the progress we need to a local level.”

Further information for contractors: The five-year deal and negotiations

The Community Pharmacy Contractual Framework for 2019/20 to 2023/24: supporting delivery for the NHS Long Term Plan
This is a shared document between PSNC, the Department of Health and Social Care (DHSC) and NHS England and NHS Improvement (NHSE&I). It sets out the agreements we have made on the CPCF for 2019/20 through to 2023/24.

PSNC Briefing 026/19: A Summary of the Five-Year Deal on the Community Pharmacy Contractual Framework
This is a PSNC document summarising the deal for the future of the CPCF. It may be a good starting point for community pharmacy contractors and their teams to read.

CPCF service development grid
This matrix documents sets out, in grid format, all of the CPCF service developments pilots that PSNC, DHSC and NHSE&I have agreed. It shows when each one may be implemented throughout the duration of the five-year deal.

PSNC Briefing 027/19: Five-Year CPCF Deal – Frequently Asked Questions
This is a PSNC document answering key questions about the future of the CPCF and the negotiations for contractors.

PSNC Briefing 028/19: Information on the community pharmacy contract settlement and funding for 2019/2020 to 2023/24
This briefing sets out the main elements of the five-year community pharmacy funding settlement for 2019/20 to 2023/24 and gives background information on what the announcement means and how community pharmacy funding works. This may be of particular use to journalists and others wanting to know more about how community pharmacy funding works.

PSNC Briefing 029/19: The Pharmacy Quality Scheme 2019/20
In July 2019, a new Pharmacy Quality Scheme (PQS) was announced for the 2019/20 financial year; this scheme was formerly known as the Quality Payments Scheme (QPS). The new scheme has a review point in February 2020 and several revisions from previous scheme criteria. This PSNC Briefing provides a summary of key information on the PQS for 2019/20.


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