12/12/2016 | Pharmacies

Understanding the pharmacy cuts

In October, newly appointed Pharmacy Minister, David Mowat, announced that funding cuts would be introduced from December 2016 with the global funding settlement being reduced by £113m for the current financial year to £2.687bn, with a further reduction in 2017/2018 of £95m to £2.592m.


While the scale of the cut this year is £57m less than first anticipated, the PSNC has announced that it is seeking a Judicial Review and with permission from the High Court, an expedited hearing has been requested. While the PSNC accepts the need for the NHS to achieve savings from community pharmacies, it has raised concerns around the Department of Health’s impact assessment in quantifying the cuts it has implemented.  

It is too early to tell what the outcome of this will be, or what effect the cuts will have on the pharmacy market. However, we’ve so far seen numerous examples of sales which underpin similar activity to that witnessed prior to the announcement. It is understandable that operators will be concerned as to the cuts’ future implications, but the sector has dealt with adversity in the past and in many eyes will continue to adapt in offering a long term and viable first line defence in primary care.

So even with the announced cuts, many will continue to see the opportunities that they present. It is inevitable that more contractors will look to exit the market as the cuts bite in real terms; however, with an expanding database of applicants looking for opportunities we predict there will continue to be strong demand for pharmacy sites.

For contractors struggling to understand the Department of Health’s announcement, Christie & Co has developed a ‘Funding Cuts Calculator’ that quickly and effectively identifies the likely impact the cuts may have on pharmacy businesses.

For further information please contact Tony Evans.