Community pharmacy 2016/17 and 2017/18


In October 2016, the Department of Health and NHS England announced changes to the community pharmacy contractual framework for 2016/17 and 2017/18. This announcement follows an open letter from DH and NHS England to the Pharmaceutical Services Negotiating Committee (PSNC), published on 17 December 2015, and a subsequent period of consultation and consideration.

The changes will be implemented from December 2016 onwards. Key elements include:

  • A funding reduction of £113 million per annum (4 per cent) in 2016/17 and a further £95 million (3.4 per cent) in 2017/18.
  • Introduction of a Pharmacy Access Scheme to protect patient access to pharmacies in areas where provision is sparse and patients depend on services.
  • A quality payments scheme, with pharmacies expected to meet gateway criteria before earning points for achievement of various quality criteria. 
  • An urgent medicines supply pilot scheme and an urgent minor illness care service pilot, led by NHS England and funded from the Pharmacy Integration Fund (see below). 
  • Phasing out of establishment payments, with an initial 20 per cent reduction from 1 December 2016, rising to 40 per cent from 1 April 2017. The intention is for the payment to cease entirely by 2019/20.
  • Introduction of a single activity fee, to replace the following volume related-payments:
    • professional fee (AKA dispensing fee)
    • practice payment
    • repeat dispensing payment
    • electronic prescription service (EPS) payment.
  • Changes to the pharmaceutical services regulations to facilitate consolidation of pharmacies.
  • The one-off EPS set-up payment will cease from 1 April 2017.

The December 2015 letter also announced a new Pharmacy Integration Fund (PhIF). This will be administered by NHS England to support greater integration of pharmacists and pharmacy staff in primary care pathways and local care models.

For more information please see the Department of Health and NHS England websites.

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