Retained margin funding for community pharmacies in England is worth £120 million less in real-terms compared to a decade ago, a parliamentary written answer has revealed.1
In 2025/26, retained margin was set at £900 million. However, the government has confirmed that the real-terms value of retained margin in 2015/16, was £1.02 billion.
The £120 million gap is likely an underestimation of the true ‘gap’ as it does not account for the increasing dispensing workload and additional operational costs pharmacies have had to absorb since 2015/16.
The CCA’s own analysis (September 2025) found that the 2024/25 value of margin was short by £430m.2
A recent CCA report (March 2025) warned of the need to increase retained margin in tandem with Drug Tariff pricing, to prevent ‘avoidable’ medicine shortages, with global manufacturers prioritising other markets over the UK for supply.3
Since 2015/16, the number of NHS prescribed medicines dispensed has increased by 16%,4 meaning pharmacies are doing significantly more work with proportionally less funding.
Since 31st March 2016, there has been a net loss of 1,479 bricks and mortar pharmacies – a 13% contraction of the network.5 6
Last March, the Government agreed to uplift pharmacy funding by 19%,7 following the decade of real-term cuts. This included an uplift to retained margin to £900m a year. This new funding was welcomed but the written answer once again demonstrates the fragile state of the community pharmacy network.
At the time of the funding agreement (31 March 2025), the government recognised the significant economic pressures facing the sector and committed to:
- “stabilise community pharmacy”
- “build on what we have achieved to date”
- “lay the foundations for an independent prescribing service to harness its full potential in the future”
The latest parliamentary written answer follows the Government’s recent admission that overall Community Pharmacy Contractual Framework (CPCF) funding in 2025/26 was £800m less in real-terms then a decade ago.7
Malcolm Harrison, Chief Executive of the Company Chemists’ Association said:
“This is yet another shocking finding, arising from a further question tabled on behalf of the CCA. This follows an earlier question that uncovered that the total funding envelope for 2025/26 is £800m less in real-terms than it was a decade ago.
Investing in retained margin, together with Drug Tariff pricing, is essential to ensuring the UK can maintain lower prices for tax payers, compete in the global marketplace, and to repair the resilience of our medicines supply chain.
Without investment in both tariff pricing and margin it will be patients who ultimately lose out.
We really hope the Government delivers on its commitment to stabilise community pharmacy by providing the additional funding it so urgently needs”.
ENDS
References
- House of Commons, Written Answer – Pharmacy: Finance, UIN 115915
- CCA, Margin is £430m short of its true value in England, 24 September 2025
- CCA, Penny-pinching is leading to avoidable medicine shortages, 19 March 2025
- NHS Business Services Authority, Pharmacy and appliance contractor dispensing data
- NHS Business Services’ Authority, Pharmacy Openings and Closures, 5 February 2026
- NHS Digital, General Pharmaceutical Services in England 2008/09 – 2018/19, 2 August 2018
- Department of Health and Social Care, Community Pharmacy Contractual Framework: 2024 to 2025 and 2025 to 2026, 31 March 2025
- CCA, Pharmacies in England funded £800m less than a decade ago, Government confirms, 25 February 2026