Community pharmacy settlement brings stability, but long-term challenges remain

As a former Pharmacy Minister, I watch the annual community pharmacy contract negotiations with interest because I know how important they are. This year’s settlement is notable for one reason above many in that it was agreed! That may sound like a low bar, but in today’s NHS it is anything but.

At a time when ministers find themselves in dispute with almost every part of the health workforce, the fact that Government and Community Pharmacy England have reached an agreement matters.

Negotiation remains preferable to imposition. It provides stability, certainty and, perhaps most importantly, a platform for future reform. The settlement itself is better than many in the sector (including me) were expecting. Indeed, compared with the rest of primary care, community pharmacy has secured one of the stronger funding settlements available anywhere in the NHS.

Minister Stephen Kinnock deserve praise for recognising that pharmacies cannot carry on indefinitely with rising costs. The increase in funding, the uplift in retained medicines margin and the write-off of historic over-delivery all sit on the positive side of the ledger.

But we should be honest about what this settlement is – and what it is not.

It is not a recovery plan. The uncomfortable truth is that a decade long funding gap – which I absolutely take my share of responsibility for – has not been closed. The additional investment announced for 2026/27 is largely consumed by increased activity levels and of course inflation. This matters because while the settlement should help stabilise the sector, I suspect it will not halt pharmacy closures.

There is another challenge too. I have great respect for Community Pharmacy England but there will come a point where it must decide whether it believes a deal is acceptable or not.

Last year, and now this, we hear of an agreement reached quickly followed by explanations setting out why the agreement is not good enough. I understand why this occurs, but it is not a position that can be sustained indefinitely and many in the sector will feel that. Ministers won’t much care so long as it’s done and they will come to rely on that.

At some point, the sector, government and negotiators alike need true alignment on what success actually looks like. The government’s clear priority in this settlement is independent prescribing. As a manifesto commitment and a central part of the neighbourhood health agenda, it is easy to see why ministers are keen to deliver here.

The principle is absolutely right. For years I have argued that community pharmacy is one of the NHS’ most underused assets. Everyone should want pharmacists diagnosing, prescribing and managing more patients – ‘hospital to community’ as they say.

My concern is whether the funding stamped on this settlement will be enough to deliver independent prescribing at a meaningful scale. Training people is vital. Creating the capacity, infrastructure and incentives to make independent prescribing a systemic part of community pharmacy practice is another challenge.

My verdict? This is a better deal than many anticipated and best in class in primary care. It provides some level of stability and demonstrates that constructive negotiation is still possible with this government.

But stability is not transformation.

The question facing us all is whether the settlement represents the first step towards a realised clinical future for community pharmacy – or merely another year spent managing decline, albeit a little more slowly.