COVID-19 Cost Negotiations Update: PSNC rejects initial offer and makes counter-proposal

COVID-19 Cost Negotiations Update: PSNC rejects initial offer and makes counter-proposal

November 13, 2020

PSNC has today restated its position that community pharmacy contractors must be compensated for the full impact that the COVID-19 pandemic has had on their businesses.

The sector has so far received £370m in advance payments to help with COVID-related costs. This cash injection has been extremely welcome, but contractors must not now be forced to pay this back as they try to cope with the impact of the second wave of COVID-19 in the UK.

An initial funding offer to deal with the financial impact of COVID-19 on community pharmacy contractors was made to PSNC over the summer. This came from the Department of Health and Social Care (DHSC) who had been working with HM Treasury.

The offer marked the start of very challenging negotiations.

PSNC’s Negotiating Team ultimately rejected the offer as being too limited. The Team argued that the sums on offer from HM Government were not sufficient and that contractors must not be asked to provide evidence of historical costs, as had been proposed.

PSNC also believed that the proposed policy was not in line with Ministers’ pledges to give the NHS whatever it needs during the pandemic, as it would not have allowed contractors to claim compensation for all the impacts that their businesses have felt.

Last month, PSNC put a counter-proposal to DHSC, asking for the £370m in advance payments to be written off against the costs of COVID-19 to contractors for a particular period of time. We await a response to that proposal.

Contractors urgently need clarity and financial confidence as we move through the second wave of COVID-19 in the UK, but these critical negotiations are being prolonged because PSNC has not yet received a funding offer that will fully compensate contractors.

PSNC Chief Executive Simon Dukes said:

“Although there was initial very welcome help from HM Government in the form of £370m in advance payments to community pharmacies, high-level negotiations on community pharmacy contractors’ COVID-19 related costs have been difficult.

When formal discussions began over the summer PSNC and HM Government were still far apart. Despite the phenomenal work that has taken place across the community pharmacy sector during the pandemic, and the support that we know the sector has from Health Ministers, the proposal attempted to constrain the amount of compensation that was offered to pharmacy businesses and PSNC was unable to accept this.

There is quite simply nothing more that pharmacies could be doing to help their local communities, support the NHS and provide value to HM Government, and in the past months we have presented this case as business data, analysis, projections, case studies and strong value arguments to officials. We are waiting for a response to our latest proposal on COVID-19 costs, in which we propose a write-off of the £370m advance payments against the costs of COVID-19 to contractors for a fixed period, and also to our separate bid for an uplift to CPCF funding.

Community pharmacies are providing essential services to people through this pandemic and they will be critical to ensuring the continuity of medicines as we exit the EU: they must be treated as the valuable part of the NHS that they are. Negotiations are continuing and we are looking for ways to work constructively with HM Government and the NHS on the many challenges they face, but PSNC cannot accept any less than full reimbursement for pharmacies of their COVID-related costs.”



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