Chancellor Philip Hammond referred to government subsidies for community pharmacy's as "too high"

By Neil Trainis

Britain’s chancellor Philip Hammond has written to prime minister Theresa May to persuade her to cut community pharmacy’s funding, more than two months before the government announced its intention to reduce the sector’s budget.

It emerged in the High Court last week, where judicial reviews by the National Pharmacy Association (NPA) and PSNC were considered, that in a letter to May dated August 11 last year, Hammond expressed his “support for taking action” and insisted government subsidy of community pharmacy was “too high”.

An outraged community pharmacy sector has spent months vociferously fighting the government’s 12 per cent reduction of its budget and the revelation of Hammond’s letter will only add fuel to the flames of anger.

“Of the £10 billion we spend on the system, £2.8 billion is spent dispensing £7.2 billion of medicines. Each store that meets a minimum volume threshold gets £25,000 annually in a lump sum, and further receives at least 90p per item dispensed,” the chancellor wrote in the letter.

“It is inefficient to spend 39 per cent of the value of medicines to get them into patients’ hands. Owing to government subsidy, the number of pharmacies has increased by 20 per cent over the last decade to over 11,500.”

David Mowat, the communities and social care minister, told the Royal Pharmaceutical Society conference in September, nearly one month after Hammond’s letter, that the government would delay its cuts to community pharmacy funding, originally planned for October, while it took more time to consider the plans.

However, Hammond’s letter appears to suggest the government was intent on slashing community pharmacy’s funding despite Mowat’s insistence that it would take time to ensure it was making the correct decision.

The government eventually announced it would introduce the cuts on October 20 last year.

In the letter Hammond added: “Longer-term, I would like the community pharmacy market to follow trends we have witnessed in other retail markets.

“This might include a shift away from the traditional bricks-and-mortar business model towards scaled-up, innovative supply solutions employing digital technology, where government expenditure is minimised.”

NPA chairman Ian Strachan, who has led his organisation’s campaign against the cuts, said: “This is a smoking gun. We have been warning for months that there are elements within government that want to see the end of the community pharmacy network that has served so many patients so well for so long.

“Now the proof is there for all to see. The Treasury is clearly motivated by the notion that centralised medicines supply is cheaper, it is not in the slightest bit interested in the quality of patient care.

“From where I am standing – on the NHS front line – it looks like the funding cuts imposed on us this year are the first salvo in an effort to wipe local pharmacies off the map. But the NPA and the millions of people who have supported our campaign to save local pharmacies will not let that happen.

“Philip Hammond’s letter contains financial miscalculations and misleads the prime minister. Above all it is remarkable for its total lack of appreciation that pharmacies do more than simply supply medicines. For many people they are a local lifeline.”

The PSNC and NPA’s judicial reviews revolved around the government’s failure to properly consult on the cuts and sufficiently assess its impact on particular groups of people such as the elderly, poor, disabled and black and ethnic minorities respectively.

A verdict is expected to be delivered in the High Court in the week beginning April 3.

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