Government CPCF Impact Assessment: PSNC highlighting issues to Minister

Government CPCF Impact Assessment: PSNC highlighting issues to Minister

November 3, 2020

Some details of a Department of Health and Social Care (DHSC) impact assessment related to the five-year Community Pharmacy Contractual Framework (CPCF) deal have today been published in the pharmacy press.

The impact assessment is an internal DHSC document which illuminates the Department’s thinking on some elements of the deal. The document was not seen by PSNC at any point in the negotiations, but some of the arguments set out within it may have been used to help convince HM Government of the benefits of the deal.

PSNC objects to some of the DHSC assumptions set out within the impact assessment and we will write privately to Health Ministers and to the Secretary of State to correct these points. We are also continuing to press HM Government to honour its promises to give the NHS all the financial support it needs through the pandemic – community pharmacies’ full costs must be covered.

In particular:

  • PSNC has always questioned whether the introduction of IT and automation to dispensing would bring savings for community pharmacies and we have repeatedly made our reservations clear on this to DHSC.
  • PSNC does not agree that the Transitional Payment has helped to alleviate contractors’ costs – this would never have been the case without an increase to the contract sum and we will ensure that Ministers have clarity on this point.
  • PSNC has seen no evidence that the cost savings brought about by stopping the provision of MURs will cover the costs of new pharmacy services, and this is why we insisted that an annual review process should be built into the deal.

It is misleading to compare the impact of the deal with a ‘no change’ scenario. This option was never on the table. PSNC’s Negotiating Team was left in no doubt that had the sector not agreed to a new and ambitious vision for community pharmacy services, in some form or another, then further funding cuts would have followed to deliver the efficiency squeezes that the NHS was determined to impose on the sector.

PSNC considered very carefully what the impact of the five-year deal would be on pharmacy contractors. The majority of the Committee eventually accepted the deal as a solid foundation from which the sector could build: it gave a clear roadmap for the future, and some funding security.

PSNC also agreed that there would be a built-in annual review process through which it could make future appeals to Government and the NHS based on pharmacies’ costs, and in good faith that HM Government and the NHS would work collaboratively with the sector to help ease capacity issues.

PSNC Chief Executive Simon Dukes said:

“This Impact Assessment sheds some more light on DHSC thinking about the five-year CPCF deal, but the key premise that the alternative was to do nothing is misleading. It was made very clear to us during negotiations that the sector needed to demonstrate efficiencies in order to keep flat funding.

The five-year deal was, and remains, attractive because it develops clinical services in line with the sector’s own vision of its future, and because it protects baseline funding for five years giving us a platform from which to build: the alternative would have been more funding cuts. These are the sorts of decisions that we are regularly faced with in a monopsony in which there is no independent regulation of our paymasters, and as a sector we must press for that regulation.

PSNC considered very carefully the impact that the deal would have on pharmacies, and we eventually agreed it with two key concessions from the other side: first that they would work with us to ease capacity in the sector, and second, that we would have an annual review process. The review process was to enable us to monitor the impact of the deal on the sector very closely, and to argue for changes if they were needed. Similarly, freeing capacity would, we hoped, make delivering the changes set out in the deal more manageable for contractors.

Progress on both of these points has been inadequate, and since we agreed the deal COVID-19 has had a sudden and significant impact on community pharmacies’ costs. We are continuing to warn HM Government that without further financial support, we will see pharmacy closures. We await their response to our businesses cases and proposals both to deal with COVID-19 costs and to implement an uplift to CPCF funding. We are appealing to Ministers on both these points.”

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