Pharmacists warned that chronic underfunding leaves patients vulnerable to medicines shortages as new analysis showed that the NHS only pays 20% of the cost of some drugs.
The analysis showed that in some instances the NHS only paid for a fifth of the cost of commonly dispensed drugs including anti-depressants, pain relief and blood pressure medication, leaving pharmacies covering the remaining cost from their own pocket.
NPA numbers showed pharmacies lost £5.8 million a month on average dispensing these six drugs alone.
The NPA, who represent around 6,000 independent community pharmacies, warned that years of underfunding has left supplies at risk and pharmacies facing unacceptable financial pressure.
It called on the Government to bring an end to the scandal of pharmacy owners subsidising the bill for the nation’s medicines.
It warned that without urgent reform of the ‘fundamentally broken’ pharmacy contract with the NHS medicines shortages will only worsen and pharmacies could be driven out of providing services for the NHS.
An NPA survey conducted this year found that two thirds of pharmacies made a loss in 2025 and 72 per cent of pharmacy owners had raided personal savings or remortgaged their homes to keep their pharmacies open to patients.
The analysis by the NPA of an average ‘shopping basket’ of latest medicine prices found that:
Drug | Cost for Pharmacy | Payment by NHS | Loss made by pharmacy per unit |
Aspirin 75mg (28) | £3.97 | £2.18 | £1.79 |
Irbesartan 150 mg (28) (blood pressure medication) | £6.09 | £1.68 | £4.41 (28% of cost met by NHS) |
Tolterodine 2mg (56) (treatment for overactive bladders) | £14.55 | £4.09 | £10.46 (28% of cost met by NHS) |
Mometasone 0.1% cream (30) (treatment for eczema) | £12.09 | £3.75 | £8.34 (31% of cost met by NHS) |
Lofepramine 70mg (56) (anti-depressant) | £32.00 | £22.69 | £9.31 (71% of cost met by NHS) |
Ivabradine 2.5 mg tablets (56) (treatment for Angina) | £53.09 | £43.72 | £9.37 (82% of cost met by NHS) |
Pharmacies in England buy prescription drugs from wholesalers and are paid via a central NHS contract which is supposed to reimburse them for the cost through a drugs tariff set in Whitehall. Similar arrangements govern medicine supplies in Wales and Northern Ireland.
However, due to fluctuating wholesale prices, government funding cuts and varying prescribing by doctors, NHS funding often falls short of medicine prices pharmacies have to pay.
Pharmacies have warned that the government funding mechanism is fundamentally broken and does not support individual pharmacies who could be making huge losses providing NHS medicines through no fault of their own.
Pharmacies have seen huge reductions in their real terms funding over the last 10 years and despite recent uplifts face an eye watering £2.6 billion funding gap according to independent economic analysis commissioned by NHS England earlier last year.
Henry Gregg, Chief Executive of the National Pharmacy Association said:
“It is a scandal that all too often pharmacies are subsidising the cost of the nation’s medicines. It pushes pharmacies to the edge of closure and exacerbates chronic problems with medicine supply.
"The government must stop funding pharmacies below the cost price of medicines – no other part of the NHS would tolerate this.
“Just like GPs and dentists, pharmacies are a vital part of the NHS but are forced to deal with an outdated and broken contract in desperate need of reform.
“We want to work with the government to implement reform and deliver care closer to millions of people, but if this situation continues, there is a real risk that more and more will be forced out of the NHS or have to close altogether.”
Notes
Analysis is based on Price Concessions published by Community Pharmacy England compared with prices from medicine wholesaler AAH on 7th January 2026.
