Guidance

Community Pharmacy Contractual Framework 5-year deal: year 4 (2022 to 2023) and year 5 (2023 to 2024)

Updated 12 May 2023

22 September 2022

Dear community pharmacy contractors

We write to update you on the agreement for both year 4 and year 5 of the Community Pharmacy Contractual Framework (CPCF) 2019 to 2024 5-year deal between the Pharmaceutical Services Negotiating Committee (PSNC), the Department of Health and Social Care (DHSC) and NHS England (NHSE).

Firstly, we would like to thank all pharmacy contractors for their continued work and support. In summer 2021, we wrote to you to set out the agreement for year 3 of the 5-year deal. Since then, you have successfully continued the implementation of the 5-year deal by increasing the offer from community pharmacy. You have expanded the New Medicine Service (NMS) to more therapeutic areas and introduced the Blood Pressure Check Service and the Smoking Cessation Service (SCS) following hospital discharge. At the same time, community pharmacy continued to support the national coronavirus (COVID-19) response with the Medicines Delivery Service, Pharmacy Collect, over 24.5 million COVID-19 vaccinations and over 4.8 million flu vaccinations. That is an amazing effort and has been recognised by the NHS and health ministers.

The joint annual review of the 5-year deal undertaken last year confirmed this good progress, while raising significant capacity and funding concerns. PSNC set out contractors’ concerns on the rising demand, economic and workforce pressures, and their fears about future viability and the impact on quality of service for patients.

Within that context and following challenging but constructive discussions, we have agreed a package for the remaining years of the 5-year deal. This 2-year agreement continues to support measured and incremental expansion in clinical service provision from community pharmacies. Alongside this, recognising the pressures facing the sector and the importance of these services to the health system, NHSE has been able to provide for a modest and non-recurrent additional investment of £100 million across years 4 and 5 to support contractors.

We will not be seeking to introduce any further clinical services beyond those contained in this letter from within the current funding envelope.

New and expanded services

Building on progress made in GP referrals via the Community Pharmacist Consultation Service (CPCS) and hospital referrals under the Discharge Medicine Service (DMS), NHSE is providing project support to NHS trusts to facilitate implementation of the SCS and the DMS, and is also funding new integrated care system (ICS) community pharmacy clinical lead roles to support implementation of all clinical services. Given the significant capacity concerns raised by PSNC during negotiations, we will only be introducing services that build on existing services and that pave the way for community pharmacy’s future.

From 11 January 2023, we will introduce Tier 1 of a Pharmacy Contraception Service, enabling community pharmacists to provide ongoing management, via a Patient Group Direction, of routine oral contraception that was initiated in general practice or a sexual health clinic. This will allow people greater choice and access when considering continuing their current form of contraception.

The fees for this service are as follows:

• a fee for each consultation of £18
• a set-up fee of £900, paid in instalments

From March 2023, we will expand the CPCS to enable urgent and emergency care settings to refer patients to a community pharmacist for a consultation for minor illness or urgent medicine supply. The fee for this service will be the existing CPCS fee of £14.

From 19 April 2023, subject to positive evaluation of an ongoing pilot, we will expand the NMS to include antidepressants to enable patients who are newly prescribed an antidepressant to receive extra support from their community pharmacist.

From 4 October 2023, subject to positive evaluation, we will introduce Tier 2 of a Pharmacy Contraception Service, enabling community pharmacists to also initiate oral contraception, via a Patient Group Direction, and provide ongoing clinical checks and annual reviews.

To recognise the valuable skill mix that exists in community pharmacy, the service specifications for the Blood Pressure Check Service and SCS will be amended to also allow delivery by pharmacy technicians. Other services or elements of services that may be deliverable by pharmacy technicians will also be reviewed during the remaining years of the deal. No changes will be made to current fee levels.

Pharmacy Quality Scheme (PQS)

NHSE will introduce updated Pharmacy Quality Schemes (PQS) in both year 4 and year 5 with annual funding maintained at £75 million. Year 4 PQS will commence on 10 October 2022. These schemes aim to consolidate and build on existing criteria to support the NHS recovery from COVID-19 and wider national health priorities.

In year 4, the scheme will build on previous criteria around:

• managing risk (red flags, sepsis and COVID-19 transmission)
• effective management of respiratory disease
• antimicrobial stewardship
• referrals to weight management services

New criteria will be aimed at:

• supporting those suffering domestic abuse
• level 3 safeguarding skills
• improved access to medicines to support palliative and end of life care
• training on early cancer diagnosis

Year 5 will build on year 4. It will also include a re-audit of the safe use of anticoagulants, and new criteria aiming to increase awareness of the availability of defibrillators and understanding of how they should be used, and to increase working with local systems on health inequalities.

Summaries of the year 4 and year 5 criteria and training requirements for year 4 are included in Annex A: Pharmacy Quality Scheme.

Funding

To deliver the non-recurrent additional investment of £100 million set out above, additional to the agreed CPCF funding, allowed medicine margin will be increased by a total of £100 million over the 2 financial years 2022 to 2023 and 2023 to 2024. This will help to improve contractors’ cash flow as this additional allowed medicine margin is balanced against margin over delivery from previous years.

In year 4 and year 5, there will still be unallocated funding for future clinical services. We have agreed that this will be delivered to contractors through the following:

• the growing volumes of new and expanded clinical services
• the payment of a flat fee from April 2023 to all pharmacy contractors who dispense at least 101 items a month up to a national total of £70 million on an annual basis (this amount reduces if clinical service volumes grow beyond our forecasts and all unallocated funding is spent on new services)
• any remaining unallocated funding will continue to be paid out as a transitional payment until the end of year 5, or until the unallocated funding is fully deployed against growing service volumes and/or by the flat fee, which we will jointly monitor

Since October 2021, the transitional payment has been based on both dispensing volume and service delivery. To reflect the direction of travel set out in the 5-year deal and reward pharmacy contractors that have adopted clinical services, from November 2022 the service element of the transitional payment will be increased to 75% of the transitional payment. The service element will be calculated based on the total income received for advanced services (excluding flu vaccination) provided.

VAT

HM Revenue and Customs (HMRC) has confirmed that services delivered by pharmacy technicians are exempt from VAT so we will revise service specifications to support delivery by pharmacy technicians, recognising their valuable role in clinical service delivery.

DHSC continues to work with HM Treasury and HMRC to resolve any differences in VAT treatment of services supervised by registered pharmacy professionals when compared with other healthcare professionals.

Discussions with HMRC about the VAT treatment of the CPCF are ongoing but HMRC has confirmed that the following are out of scope for VAT:

• PQS
• Pharmacy Access Scheme
• transitional payment
• service set-up fees

We also expect there to be a confirmation around VAT treatment of serious shortage protocol reimbursement.

Reimbursement reform

DHSC has committed to reviewing the implementation of the price concession process as a matter of priority.

During year 4 and year 5, we will also continue to implement the reimbursement reforms. This will ensure that pharmacy contractors have more equitable access to medicine 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. The detail of a new mechanism to establish category A reimbursement prices will be finalised with the PSNC by the end of 2022 with implementation as soon as practicable.

Regulatory changes

The terms of service have been changed to make completion of Health Education England’s annual community pharmacy workforce survey mandatory from 2022 onwards. This will ensure that robust workforce data is available to support future planning, training and investment decisions.

To free up time for the workforce survey, the requirement to carry out an annual patient questionnaire has also been removed from the terms of service. Instead, NHSE will undertake national patient engagement on pharmacy services.

Market entry provisions have been changed to streamline applications for consolidations and the required notification period for changes to supplementary hours will be reduced. There will also be changes to the Pharmacy Manual on fitness information, emergency closures and changing core hours.

DHSC will also support efficiency by taking forward several changes to legislation:

• a public consultation on legislative changes to make hub and spoke dispensing models accessible to all community pharmacies closed on 8 June 2022 and DHSC is considering the responses. Subject to the proposed medicines legislation amendments being made, we will have further discussions and progress any necessary amendments to the NHS pharmaceutical services legislative framework with the aim of enabling implementation of these within NHS pharmaceutical services as soon as possible
• subject to making the changes to medicines legislation as proposed in the recent consultation on original pack dispensing and whole pack dispensing of sodium valproate, we will have further discussions and progress any necessary amendments to the NHS terms of service and reimbursement arrangements as soon as possible
• subject to the views of the Commission on Human Medicines, DHSC will launch a public consultation on legislative changes to allow pharmacy technicians to make use of Patient Group Directions
• DHSC will also launch a public consultation on legislative changes to enable community pharmacies to make better use of the available skill mix in pharmacies

Beyond the 5-year deal

The 2-year agreement for year 4 and year 5 concludes the 5-year deal, allowing DHSC, NHSE and PSNC to consider what comes after the 5-year deal. All 3 organisations agree that we should:

• build on what we have achieved under the 5-year deal
• continue to make the best possible use of the knowledge and skills of pharmacy teams
• aim to expand clinical services in community pharmacy

The experience of the existing referral pathways from GPs and hospitals, and the management and supply of medicines offers exciting prospects for further service development, both nationally and locally.

Economic analysis and PQS evaluation

An independent evaluation of PQS and its outcomes will inform future developments of the scheme.

DHSC and NHSE will continue to work with PSNC and contractors to further their understanding of the sector using more comprehensive data, and engage in discussions on issues affecting the future of the community pharmacy sector.

NHSE will commission an economic analysis of NHS pharmaceutical services through an independent review, using data provided by contractors, and will work with PSNC on the review. This review will help inform the negotiation of the future contractual framework for community pharmacy.

Action to start to relieve contractor pressure

DHSC and NHSE will also continue our current work with PSNC on what more can be done to relieve the current pressures contractors are facing.

Conclusion

We will continue to collaborate on finalising the arrangements set out in this letter.

Yours sincerely,

Alette Addison, Deputy Director, Pharmacy, Dental and Optical, Department of Health and Social Care

Ali Sparke, Director, Dentistry, Community Pharmacy and Optometry, NHS England

Janet Morrison, Chief Executive, Pharmaceutical Services Negotiating Committee

Annex A: Pharmacy Quality Scheme (PQS)

Year 4 gateway and quality criteria

Gateway criteria:

• 20 NMSs between 1 April 2022 and 31 March 2023, which must be claimed for by 5 April 2023
• updated patient safety report, learning and actions

Quality criteria:

• risk review – update for risks relating to missing red flag symptoms during over-the-counter (OTC) consultations, missing sepsis and minimising COVID-19 transmission. Training on risk management and sepsis
• access to palliative and end of life care medicines – contractors must update their NHS profile manager to indicate whether they hold the identified end of life critical medicines, and have an action plan in place to be able to support patients and carers in obtaining palliative and end of life medicines
• safeguarding level 3 – registered pharmacy professionals have completed bespoke training (at level 3) on e-learning for healthcare (elfh) and have an action plan in place
• domestic abuse prevention – all patient-facing staff that provide advice on medicines or healthcare can provide assistance for the vulnerable seeking help and have completed Safe Spaces and Ask for ANI training or toolkit
• respiratory – referrals for those using 3 or more short-acting bronchodilator inhalers in 6 months, personalised asthma action plans, use of spacers in children, offering NMS (including inhaler technique checks) to ensure people understand how to use new inhalers and devices, and advice on environmentally sustainable disposal of inhalers. Training on inhaler technique
• weight management – proactive discussions including measuring BMI, waist circumference and discussing the impact on health (with at least 25 people), updated action plan and referring at least 4 eligible patients to NHS Digital Weight Management Programme or locally commissioned Tier 2 service. Training on weight management
• antimicrobial stewardship – pharmacy staff have reviewed their practice to help them assess patients presenting with suspected urinary tract infections (UTI) or upper respiratory tract infections (URTI) using 2 TARGET leaflets, one for UTI and one for URTI (a minimum of 15 patients for each leaflet over a 4-week period). Embed use of tools into future practice. Training on antimicrobial stewardship and infection, prevention and control, updated action plan, and staff to become antibiotic guardians
• cancer awareness training – all patient-facing staff that provide advice on medicines or healthcare have passed the Let’s Communicate Cancer e-learning (British Oncology Pharmacy Association (BOPA)) Module 1 (available on the elfh website) and have available a new risk review to ensure potential cancer symptoms are identified and appropriate referrals are made

As part of the above criteria, pharmacy staff are required to complete the following training requirements set out in the table below.

Table 1: training summary for PQS year 4

Validity of training

In year 4 and year 5, pharmacy staff may be required to repeat training and e-assessments that they have previously completed. The table below details the time period that the training and assessment (where applicable) must have been completed prior to the PQS declaration. For example, registered pharmacy professionals must have completed the Centre for Pharmacy Postgraduate Education (CPPE) sepsis e-learning and e-assessment within the past 2 years.

Criterion	Training	Participation	Validity
Risk review	CPPE Risk Management guide and e-assessment*	All registered pharmacy professionals	4 years
Risk review	CPPE Sepsis e-learning and e-assessment	All registered pharmacy professionals	2 years
Safeguarding level 3 webinar	Safeguarding Level 3 for Community Pharmacy Teams**	All registered pharmacy professionals	New
Inhaler technique checks	CPPE Inhaler Technique for Health Professionals: getting it right e-learning*** and e-assessment (this must be the current version of the e-assessment)	All registered pharmacy professionals	4 years
Weight management	Section 1 and 3 of CPPE Weight Management for Adults: understanding the management of obesity e-learning and e-assessment	All registered pharmacy professionals	4 years
Weight management	All Our Health: bitesize training and assessments on adult obesity and All Our Health: bitesize training and assessment on childhood obesity	All non-registered patient-facing pharmacy staff who provide health advice	4 years
Domestic abuse prevention campaign	Safe Spaces Training and e-assessment	All patient-facing pharmacy staff that provide advice on medicines or healthcare	New
Antimicrobial stewardship	Health Education England (HEE) Infection Prevention and Control Level 1 e-learning and assessment	All non-registered pharmacy staff	3 years
Antimicrobial stewardship	HEE Infection Prevention and Control Level 2 e-learning and assessment	All registered pharmacy professionals	3 years
Antimicrobial stewardship	HEE Antimicrobial Stewardship for Community Pharmacy e-learning and e-assessment	All patient-facing pharmacy staff that provide advice on medicines or healthcare	3 years
Cancer awareness	Module 1 of Let’s Communicate Cancer e-learning (BOPA) and associated quiz****	All patient-facing pharmacy staff that provide advice on medicines or healthcare	New

* Registered pharmacy professionals whose risk management training and e-assessment is due to expire during year 4 PQS may choose to defer completion of this training and e-assessment until PQS 2023 to 2024 (year 5) as an exception to the overall training requirements. This amendment recognises the delay to PQS launch in year 4 but all training validity periods will revert to those defined above thereafter and for all other training modules.

** This is the webinar, which was held on 30 June 2022 by NHSE, therefore if you attended this webinar you have met this training requirement.

*** Registered pharmacy professionals can complete this e-learning or attend a CPPE inhaler technique face-to-face workshop.

**** If you have completed this training via the BOPA e-learning since April 2021, you can produce this certificate of completion as evidence of this training requirement.

Year 5 gateway and quality criteria

Further information on the details and training requirements for year 5 will be provided in due course.

Gateway criteria:

• 4% of NMS cap
• updated patient safety report, learning and actions

Quality criteria:

• risk review – update for risks relating to missing red flag symptoms during OTC consultations, missing sepsis, minimising COVID-19 transmission and missing red flag symptoms of cancer. Training on risk management, sepsis, and early diagnosis and prevention of cancer
• defibrillators – risk review completed regarding cardiac arrest, awareness of how to use a defibrillator and location of nearest defibrillator known to all staff
• reducing harm from anticoagulants – re-audit and implementation of learnings and recommendations from 2021 to 2022 audit
• palliative and end of life care – as per year 4 requirements
• peer review of safety report – to be completed with individual(s) from either within the same legal entity or outside of their legal entity and completion of any identified actions
• respiratory – as per year 4 requirements
• weight management – as per year 4 requirements
• antimicrobial stewardship – as per year 3 and year 4 requirements plus advice on safe disposal of unused or expired antibiotics
• health inequalities – collaboration with ICS, integrated care board, local primary care network or GP practice to develop an action plan to tackle health inequalities and completion of CPPE health inequalities e-learning and e-assessment