Guidance

Community Pharmacy Contractual Framework 5-year deal: year 3 (2021 to 2022)

Updated 12 May 2023

23 August 2021

Dear community pharmacy contractors,

We write to update you on the agreement for year 3 of the Community Pharmacy Contractual Framework (CPCF) 5-year deal between the Pharmaceutical Services Negotiating Committee (PSNC), the Department of Health and Social Care (DHSC), and NHS England and NHS Improvement (NHSE&I).

The pandemic has meant that the past year and a half has been an extraordinary challenge for the NHS including community pharmacy. Despite the challenges, you continued to serve your communities, staying open to ensure access to medicines and healthcare. You stepped up when needed with the medicines delivery service and Pharmacy Collect. You vaccinated more people against flu than ever before and, community pharmacy has a growing role in COVID-19 vaccination. We want to thank you for your work over this period.

A year of consolidation and recovery

Our 3 organisations have been working together in recent months on the detail of year 3. Those discussions were challenging but have shown that we jointly remain committed to the vision in the 5-year deal for pharmacy to be more integrated in the NHS, provide more clinical services, be the first port of call for healthy living support as well as minor illnesses, to support managing demand in general practice and urgent care settings. This enhanced role for community pharmacy is even more important now as it will support recovery of the NHS from COVID-19.

Despite the challenges the pandemic caused, we managed to jointly accomplish much of what we set out to achieve in year 2. All pharmacies are now Healthy Living Pharmacies providing healthy living advice and support and health promotion in their local communities. They have been actively supporting weight management through conversations about BMI and have also prepared themselves to better help people with suicidal feelings.

We expanded the Community Pharmacist Consultation Service (CPCS) to GP practices, and introduced the Discharge Medicines Service (DMS) to improve medicines safety on discharge from hospital. Work is ongoing to support the continued implementation during the remainder of 2021 to 2022. Both services confirm community pharmacy’s role at the heart of the NHS and are supporting the recovery of the NHS from COVID-19.

Further work is underway to develop the CPCS referral routes from Emergency Departments and Urgent Treatment Centres and work with systems to further embed these services in year 3 as part of integrated care pathways across primary care networks (PCNs).

New services

In September 2021 we will expand the New Medicine Service (NMS) to include the following additional therapeutic areas:

• hypercholesterolaemia
• osteoporosis
• gout
• heart failure
• glaucoma
• Parkinson’s disease
• epilepsy
• urinary incontinence or retention

The cap will be increased from 0.5% to 1% of monthly prescription volume and additional bandings included. Further therapeutic areas will be piloted through the Pharmacy Integration Fund as part of a fully integrated service model.

An additional catch-up NMS is being introduced to provide the best patient outcomes for individuals that might have missed this support as a consequence of the pandemic. This catch-up NMS will also support patients identified through the Pharmacy Quality Scheme (PQS) who have missed inhaler technique checks to optimise use of their inhaler.

In October 2021, or as soon as possible thereafter, we anticipate introducing the Hypertension Case-Finding Service as an advanced service to support the NHS Long Term Plan ambitions for prevention of cardiovascular disease.

This service will have 2 stages. The first is identifying people at risk of hypertension and offering them blood pressure monitoring (clinic check). The second stage, where clinically indicated, is offering ambulatory blood pressure monitoring (ABPM). The blood pressure test results will then be shared with the patient’s GP to then inform a potential diagnosis of hypertension.

The fees for this service are as follows:

• a set-up fee of £440
• a fee for each clinic check of £15
• a fee for each ambulatory monitoring of £45

In addition, incentive fees across years 3, 4 and 5 of the CPCF 5-year agreement, will be available. Pharmacies must reach a threshold of ABPM activity to trigger the payment of the incentive fee. An incentive fee of £1,000 will be available when the threshold is reached in the first year, followed by a payment of £400 in the subsequent years if the pharmacy reaches the thresholds for those years.

The initial incentive will be triggered by delivering:

• 5 ABPM intervention in 2021 to 2022
• 15 ABPM interventions in 2022 to 2023
• 20 ABPM interventions in 2023 to 2024

This will require identification of people in whom ABPM is indicated. Pharmacies will need to identify people with high clinic blood pressure measurements who then accept ABPM with accompanying support and advice.

Contractors who sign up after year 3 must achieve the ABPM activity thresholds specified for the given financial year and will receive £1,000 as a first payment. If a contractor signs up in year 3 and fails to do 5 ABPMs, they can earn £1,000 by doing 15 ABPMs in year 4. These incentive payments will be funded separately by NHSE&I to incentivise case finding in line with the ambition outlined in the NHS Long Term Plan.

In January 2022, or as soon as possible thereafter, we will introduce a Smoking Cessation Service as an advanced service. This service enables NHS trusts to refer patients discharged from hospital to a community pharmacy of their choice to continue their smoking cessation care pathway, including providing medication and behavioural support as required; in line with the NHS Long Term Plan care model for tobacco addiction.

The fees for this service are as follows:

• a set-up fee of £1,000
• a fee for the first consultation of £30
• a fee for the last consultation of £40 for each patient
• a fee for each interim patient consultation of £10

We have agreed to introduce a core dataset for all clinical services. This data will help understand whether commissioned services are achieving the desired aims and patient benefits, inform priority-setting for the development of new clinical services and provide insight into the care needs of local populations.

The data will be submitted by contractors to the NHS Business Services Authority (NHSBSA) automatically through the Manage Your Service (MYS) portal using an application programming interface (API) that will take data securely and directly from pharmacy clinical software systems. The intention is for this to be in place before the end of 2021 to 2022.

As part of the 5-year deal there was a commitment to test a new service to improve access to palliative care medicines. NHSE&I will work with PSNC to explore the role of community pharmacy supporting patients and their carers at the end of life as part of palliative care networks.

Pharmacy Quality Scheme (PQS)

NHSE&I will introduce an updated PQS from 1 September 2021 with funding maintained at £75 million. In 2021 to 2022 the PQS will focus on priorities that support recovery from the COVID-19 pandemic. In order to participate, pharmacy contractors will need to have completed at least 20 NMS provisions and met requirements related to patient safety and managing risks related to transmission of COVID-19, missing red flag symptoms that could signify serious underlying disease in over-the-counter consultations and missing symptoms that could indicate sepsis.

The quality criteria include:

• identifying people who may benefit from weight management advice and onward referral, including to the recently introduced NHS Digital Weight Management Programme
• training regarding health inequalities and producing an action plan to actively promote COVID-19 vaccinations, particularly in Black, Asian and minority ethnic (BAME) and low-uptake communities
• training to improve skills on the provision of remote consultations
• enhancing antimicrobial stewardship using the Target antibiotic checklist
• an anticoagulant audit to enhance patient safety
• engagement with PCNs to increase uptake within their population of flu vaccinations
• checking inhaler technique, as part of catch-up NMS, ensuring patients have personalised asthma action plans and use of spacers in children, and encouraging return of unwanted and used inhalers for disposal to protect the environment

See Pharmacy Quality Scheme (PQS) 2021/22

NHSBSA for further detail on the PQS criteria. Full guidance on the scheme will be published shortly by NHSE&I.

Transitional payment

The intention of the 5-year deal was that the transitional payment would not continue past the end of year 2. However, the pandemic has delayed and disrupted plans for service introduction and planned legislative changes that would support pharmacies in making further dispensing efficiencies. It also required introduction of infection protection and control measures and changed the behaviour of patients and the public in how they utilise pharmacy services. Therefore, we have agreed to continue a transitional payment in year 3 only.

We have also agreed that the transitional payment should reflect the direction of travel set out in the 5-year deal and reward those pharmacy contractors that have adopted the new clinical service model. From 1 October 2021, the transitional payment will have 2 parts. One part will be based on a contractor’s dispensing volume, as it is now. The other part will be based on a contractor’s service delivery.

Contractors will only be eligible for the service delivery part of the transitional payment if they have claimed payment for the NMS at least once in the previous month and if they were actively registered for CPCS in the previous month.

We expect the transitional payment in year 3 to be used by contractors for the following activities:

• primary care network (PCN) and integrated care system (ICS) engagement: to support further local integration of services and strengthening relationships with PCNs with the aim of increasing uptake of clinical services
• digital transformation: many pharmacies are reviewing their operations with a view to becoming digitally mature organisations. Electronic Prescription Service usage in pharmacies now represents more than 95% of all prescriptions dispensed. As part of this digital transition, pharmacies should explore a range of further measures to deliver element(s) of their essential services digitally For example, reducing reliance on paper in dispensing workflows, introducing the provision of electronic communications to patients around prescription collections, and embracing the ability to offer telephone or video consultations for clinical services
• dispensing efficiencies: to support contractors in preparing for a more service-based role, pharmacy contractors are required to look at business processes and to consider, for example, efficient skill mix, automated dispensing systems, planning and predicting workload and engaging on hub and spoke changes

Funding delivery

To ensure delivery of the agreed financial settlement taking into account the outturn for 2019 to 2020 and 2020 to 2021 and forecast for 2021 to 2022, £12.2 million will be added to the medicines margin in the next quarter (October to December 2021), the Single Activity Fee will increase by 2p to £1.29 from August 2021 to March 2022, and an additional £10 million will be allocated to the transitional payment in 2021 to 2022.

VAT

We recognise that the current VAT legislation is not reflective of the changing role of community pharmacy. DHSC has committed to work urgently with HM Treasury and HM Revenue and Customs in year 3 to seek urgent resolution to ensure that pharmaceutical services delivered under pharmacist supervision are VAT exempt.

The fees for the hypertension case finding service and the smoking cessation service are based on service specifications based on delivery by pharmacists. If the service specifications are renegotiated to enable delivery by other staff, then the fees will be adjusted accordingly.

Pharmacy Access Scheme (PhAS)

A revised PhAS will be introduced with payments under the new scheme starting in January 2022, with the first payment made with the January 2022 reconciliation payment paid on 1 April 2022. To be eligible, a pharmacy must:

• be on the Pharmaceutical List as of 31 March 2021. Distance-selling pharmacies (DSPs), dispensing appliance contractors, local pharmaceutical services (LPS) contractors, and dispensing doctors are not eligible for the scheme
• be more than 1 mile from the next nearest pharmacy, using pharmacy to pharmacy distance calculations based on Ordnance Survey Road network analysis or be more than 0.8 mile away from the next nearest pharmacy if located in the most deprived areas (that is, Index of Multiple Deprivation decile 1 to 2)
• have received at least 1,200 Single Activity Fees in 2019 to 2020 and was not in the top 30% largest pharmacies by dispensing volume in 2019 to 2020 (that is, received fewer than 104,789 SAFs)
• be registered to provide the CPCS by 31 December 2021 (and continue this registration to be eligible for payments)
• be in premises that are directly accessible to the public, that is, not in an area with restricted access - for example, beyond airport security

Eligibility for PhAS will be announced in August 2021. Contractors will be able to access the distance mapping that underpinned the decision in relation to their pharmacy should they wish to do so. In January 2022, contractors will be able to apply for reviews of eligibility decisions based on accuracy and the presence of a physical feature anomaly. Contractors will be able to utilise evidence submitted and decision responses from the first review process in 2016 to 2017.

The PhAS payment will no longer be paid as an uplift to remuneration. Instead, payments will be in bands based on a bell curve of dispensing volume. The maximum payment is set at £17,500 per year.

LPS pharmacies returning to the pharmaceutical list will be deemed as on the list on 31 March 2021.

The total funding available for the revised PhAS will not exceed £20 million per year.

Regulatory changes

Changes will be made to the clinical governance provisions in the terms of service in the NHS (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013 to include additional pandemic requirements. This will ensure that, following consultation with PSNC, pharmacies will be required to comply with recommendations from government or NHSE&I aimed at protecting staff and patients during a pandemic.

Changes will also be made to amend the market entry provisions to enable NHSE&I to reject Pharmaceutical Needs Assessment-based applications if they provide only a minor increase in opening hours in the area and otherwise additional pharmaceutical services capacity is not needed in an area.

We have agreed to continue further conversations regarding the regulation of dispensing and supply of medicines taking into account novel ways of undertaking these activities, while, at the same time, ensuring the integrity of the market entry system, based on Pharmaceutical Needs Assessments. We will also continue discussions on a suitable process to deal with suspected prescription direction issues.

As soon as practicable, we will be seeking changes to medicines legislation to enable original pack dispensing and the wider use of hub and spoke dispensing to improve efficiencies and better use of the skill mix in pharmacy teams so that the clinical skills of pharmacists can be directed to helping patients. We will seek to enable these flexibilities within the CPCF as soon as possible.

Reimbursement reforms

Further to the proposals set out in the public consultation in 2019, we intend to progress discussions on and implement reforms to reimbursement. This will ensure that pharmacy contractors have more equitable access to medicines margin and improve pharmacy contractors’ cash flow by ensuring reimbursement prices better reflect market prices. It will also improve value for money for the taxpayer.

Training and development

We are committed to future discussions that build on the progress made to date ensuring that the clinical skills of the teams that work in pharmacies are better utilised and will work to support employers to develop the clinical skills of the community pharmacy workforce further. A further 3-year programme of education and training for PCN and community pharmacy professionals is being commissioned from Health Education England and it will include independent prescribing training for existing pharmacists.

The model for commissioning and funding of trainee pharmacists will be reformed as part of the overall reform of the training and education of pharmacists. From 2022 to 2023 onwards, Health Education England will support the management of the training places in community pharmacy and responsibility for administration of payments to community pharmacy contractors for trainee pharmacists.

Annual review

The 5-year deal committed all parties to an annual review of progress against the ambitions set out in the deal. This process has also been disrupted by the pandemic. However, we have agreed a review process which we will work on over the coming months. We will complete a review of years 1, 2 and year 3 to date, to inform our year 4 negotiations which we expect to start in late autumn.

Conclusion

Year 3 is the year in which we consolidate the services already introduced, continue on our path to implement the vision in the 5-year deal and make the best possible use of community pharmacy in the recovery of the NHS from COVID-19. We will collaborate on finalising the arrangements for those services to be introduced later in the year, in order to give contractors as early notice as possible of their introduction.

Yours sincerely,

Alette Addison, Deputy Director Pharmacy, Dental and Optical, Department of Health and Social Care
Ed Waller, Director of Primary Care and Strategy and NHS Contracts, NHS England and NHS Improvement
Simon Dukes, Chief Executive, Pharmaceutical Services Negotiating Committee