Increases to employers National Insurance contributions and the National Living Wage will cost community pharmacies £200 million a year in unplanned costs, national pharmacy bodies including Community Pharmacy England have warned today. They have told the Government that ‘without mitigation, these additional costs will push many pharmacies more towards insolvency’, leading even more to close as well as cuts to vital health services for patients.
In a letter to the Health Secretary Wes Streeting MP, Community Pharmacy England, the Company Chemists’ Association (CCA), the Independent Pharmacies Association (IPA) and the National Pharmacy Association (NPA) have urged the Government to shield community pharmacies from the increases.
Analysis by Community Pharmacy England found that the National Insurance increase would cost pharmacies an estimated £50 million whilst increases in the National Living Wage could cost anywhere between £115-152 million. The pharmacy bodies have said that “imposing very significant additional costs will further undermine the already perilous financial position facing the pharmacy network”.
The Government has committed to offsetting this cost for the NHS but made no such commitment for community pharmacies.
This is despite community pharmacies receiving around 90% of their income by dispensing NHS medicines and delivering NHS services, including flu and Covid-19 vaccinations to keep people out of hospitals during the winter.
Unlike other businesses, pharmacies cannot put up prices for their patients, meaning that they may be forced to cut back on their opening hours, or shut altogether. This would reduce out-of-hours access, and lead to more patients having to visit A&E or urgent treatment centres at a time when the NHS has already been labelled ‘broken’.
These warnings come as pharmacies are closing at record rates due to the impact of cuts to their funding on top of inflationary pressures and increases in demand. 7 pharmacies have shut so far a week in England this year, around 700 in the past two years.
The pharmacy bodies have told the Health Secretary that they share his ambitions to move care into communities. However, without costs from the Budget being met it would “hinder the reform the Government wants to achieve and instead see community services facing further decline”.
Janet Morrison, Chief Executive of Community Pharmacy England, said:
“The Budget will wreak havoc on an already fragile community pharmacy network. Without mitigation these changes could hasten a ‘house of cards’ collapse in the network, with communities across the country quickly beginning to feel the effects as the local pharmacies they rely on are forced to make yet more cutbacks to essential healthcare services.
“As Government looks to shift healthcare from hospital to community, Ministers have a potentially disastrous situation on their hands. Urgent action is needed now to stem these costs and immediately re-set the contract sum to keep pharmacies afloat and to protect communities’ access to medicine supply and health advice.”
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