The NPA said on Monday that the increase to employer National Insurance Contributions (NICs) and the minimum wage means that pharmacies face £250 million in unplanned costs.
Nick Kaye, chairman of the NPA, said: “Pharmacies face a financial cliff edge at the beginning of April, with a triple whammy of rising National Insurance, National Living Wage and business rates all arriving at once.
“At the moment, they still have no certainty if any of these costs will be met by the Government, despite assurances for other parts of the health system including our GP colleagues.”
Kaye added that community pharmacies have been closing “in record numbers,” and that those which are left “are currently hanging on by their fingernails.”
The body, which represents 6,000 independent community pharmacies across the UK, said that without urgent clarity from the government on financial support, their members may take collective action.
In October, Chancellor of the Exchequer Rachel Reeves increased the rate of employer NICs by 1.2 percentage points to 15 percent, cutting the threshold at which the tax starts being paid from £9,100 to just £5,000.
Possible Collective Action
The NPA said that unlike other businesses, pharmacies cannot increase their prices in order to offset the effect of higher taxes.The body said this is because the majority of the average pharmacist’s work—around 90 percent—is funded via the NHS, including the supply of prescription medications, meaning they have to supplement this income with retail sales and private services.
Kaye said that pharmacies are “growing increasingly concerned about their future,” and without immediate certainty on funding, “we may be left with little choice but to recommend collection action to ensure pharmacies can survive for the patients who rely on them.”
Around 99.7 percent of pharmacies who have voted in the NPA’s ballot would take collective action if the funding situation did not improve.
A Department of Health and Social Care (DHSC) spokesperson said in response to the NPA’s remarks that community pharmacy services have “a vital role to play as we shift focus out of hospitals and into the community as part of our Plan for Change.”
‘Funding Crisis’
Pharmacists have been in talks with the government about what the sector calls a crisis in community pharmacy funding, a situation set to worsen with upcoming tax increases.Member of State for Care Stephen Kinnock said at the time that he would work closely with CPE to agree a package of funding “that is reflective of the important support that they provide to patients up and down the country.”
CPE Chief Executive Janet Morrison had said that her organisation would “consider very carefully if the proposals that the government is putting on the table address the severity of the funding crisis in community pharmacy.”
Pharmacy Deserts
Similar to the closure of bank branches and post offices, the decline in community pharmacies has been a concern raised by campaigners and lawmakers in recent years.According to analysis by the pharmacy membership body, rural areas had been hit the hardest during a wave of pharmacy closures in the past two years.
The NPA said that a number of rural areas are reliant on just one or two pharmacist providers and if one provider closes, then all of the pharmacies in an area could close down, resulting in these “pharmacy deserts.”
The body said that this forces vulnerable or older patients to travel long distances in order to get the medication or treatment they need.
