Increases to employers National Insurance contributions and the National Living Wage will cost community pharmacies £200 million a year in unplanned costs, health leaders 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, the Company Chemists’ Association (CCA), Community Pharmacy England (CPE), the Independent Pharmacies Association (IPA) and the National Pharmacy Association (NPA) have urged the government to shield community pharmacies from the increases.
Analysis by CPE 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 organisations have said that “imposing very significant additional costs will further undermine the already perilous financial position facing the pharmacy network”.
The government have committed to offsetting this cost for the NHS but have made no such commitment for community pharmacies.
This is despite community pharmacies receiving around 90 per cent 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 organisations 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”.
Malcolm Harrison, Chief Executive of the Company Chemists’ Association said:
“Pharmacy teams are busier than ever, currently vaccinating millions of patients to prevent ill-health as the NHS enters another difficult winter period.
“These short-sighted proposals could have far-reaching consequences for patients.
“Pharmacies are already suffering from an annual funding shortfall of more than £100,000 per pharmacy. 3.4m hours of pharmacy access has been lost per year between September 2022 and June 2024 alone.
“The community pharmacy network cannot be left to wither away – we need action to mitigate the impact of these additional costs”.
Please find a copy of the letter below.
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