The National Pharmacy Association (NPA) has warned that thousands of pharmacies face a financial ‘cliff edge’ in April as rises in National Insurance and National Living Wage take effect.
The NPA is warning that pharmacies in England face £250 million of unplanned costs and risk being forced to cut back their services or in some cases consider closing altogether without urgent action from the government.
Many pharmacies are reporting bills of tens of thousands of pounds which are unfunded, on top of managing the impact of real terms cuts of 40 per cent over the past decade which has forced record numbers to close already.
On top of this, many pharmacies will also face an estimated 140 per cent increases in their business rates, further pushing up costs.
Unlike other businesses, pharmacies are unable to increase their prices in order to meet these sort of imposed rises.
The NPA has said it will recommend its members take collective action, including cutting back their opening hours for patients, if a new funding settlement which meets these costs is not announced by the government imminently.
Around one million pharmacy hours for patients could be lost in England alone if action took place as well as the ending of free medicine deliveries.
The government have finally begun consultations on funding for pharmacies for this financial year,10 months later than originally planned.
However, unlike GPs and other parts of the NHS, they have yet to commit to meeting rises in National Insurance and National Living Wage announced in the Budget and are due to come into force in just 6 weeks time.
Around 90 per cent of an average pharmacy’s work is funded via the NHS, including the cost of supplying medication as well as providing vaccination services, such as the flu and COVID-19 vaccine.
99.7 per cent of pharmacies who voted in the NPA's ballot said they would be prepared to take collective action for the first time in their history if their funding situation did not improve.
Nick Kaye, Chair of the National Pharmacy Association, said:
“Pharmacies face a financial cliff edge at the beginning of April, with a triple whammy of rising National Insurance, National Living Wage and business rates all arriving at once.
“At the moment, they still have no certainty if any of these costs will be met by the government, despite assurances for other parts of the health system including our GP colleagues.
“Pharmacies have shut in record numbers and those that are left are currently hanging on by their fingernails.
“They are growing increasingly concerned about their future. Without imminent funding certainty from the government we may be left with little choice but to recommend collective action to ensure pharmacies can survive for the patients who rely on them.”
Notes to editors
The NPA estimates these new increases to National Insurance and the National Living Wage will cost pharmacies across the UK £310 million.
