Contractor Update: PSNC secures further £50m injection to ease cashflow challenges

Contractor Update: PSNC secures further £50m injection to ease cashflow challenges

May 28, 2020

Ministers have agreed to inject a further £50m of advance funding into community pharmacies at the end of May.

This follows ongoing representations from PSNC about the cashflow crisis facing many community pharmacy contractors and businesses as a consequence of the COVID-19 pandemic.

The NHS Business Services Authority (NHSBSA) is working to calculate payments with the intention that the extra £50 million can be paid at the same time as the 1st June payment.

The payment follows the £300m in advance payments already made to contractors this year in recognition of COVID-19 related cashflow challenges, and it comes as the Department of Health and Social Care (DHSC) has also increased medicine reimbursement prices by £15m in June.

Alongside the ongoing discussions about cashflow and medicines margin and procurement prices, PSNC is continuing to highlight to the NHS and HM Government the urgent need for extra funding for the sector. This includes seeking to prevent contractors having to repay any of the advance payments that they have so far received this year.

PSNC’s bid for extra funding is currently being considered by HM Treasury – we will update contractors as soon as we can.

To inform the funding negotiations PSNC is continuing to work with the other national pharmacy organisations to gather evidence of contractors’ costs – data for April will shortly be submitted to Ministers to support our bid for more funding for community pharmacies.

NHSBSA website: COVID-19 – Uplift to pharmacy contractors’ payment on 1 June

PSNC Chief Executive Simon Dukes said:

“Since March PSNC has been highlighting to HM Government both the significant cashflow problems facing community pharmacy contractors and the urgent need for more investment in the sector to cover COVID-19-related costs. Our requests for cashflow assistance have once again led to a cash injection and, combined with the £15m increase in medicines prices in June, this should help to ease some of the immediate cashflow and procurement pressures on businesses.

In addition, our funding bid to cover the unprecedented costs that contractors are currently facing is now with HM Treasury, and while it is frustrating that these negotiations are taking some time, we are continuing to press for answers.

We do not know how this pandemic will develop and the long-term effects it will have on pharmacy, but we will continue to gather evidence of contractors’ costs and other financial pressures and to press for margin adjustments and further financial assistance wherever we have a case to do so.”

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