Scott Sanderson
Partner
The government has announced a record £3.073 billion in Community Pharmacy Funding for 2025–26 under the Community Pharmacy Contractual Framework (CPCF). This is in comparison to the £2.592 billion funding pharmacies were receiving under the previous five-year contract that ran from 2019/20 to 2023/24.
This includes an additional £106 million for 2024/25 compared to 2023/24 and an additional £375 million for 2025/26. In addition, the government promised to invest a further £215 Pharmacy First and other primary care recovery plan services and to write off £193 million of debt.
There has also been an increase of the single activity dispensing fee to £1.46 per item which is an increase of 19p.
What is the real financial impact?
Despite funding increasing by 15% in 2025/26 compared to the previous year, an independent analysis has found that this will not be enough to cover the sectors funding gap. However, this funding does offer some immediate relief for many community pharmacy owners and is a step in the right direction.
The increase in the single activity dispensing fee will help pharmacy owners offset rising costs and the increase in the margin allowance to £900 million per year gives owners a little more room to manage cash flow.
How has the pharmacy sector responded?
Overall, professional bodies have welcomed the deal as a long‑overdue reprieve for a sector hit by underfunding. Community Pharmacy England (CPE), described it as “a positive first step in the right direction towards stabilisation and a better future”. However, some have remained cautious with Louise Laban Sales and Marketing Director at Centred Solutions saying that “While the announcement is a step forward, set against the backdrop of the economic analysis, you can’t help but argue that it’s just not enough to help community pharmacy release itself from the financial blackhole it has been placed in,”
Source: Pharmacy Business
Furthermore, some others in the sector have suggested that this increase in funding will just be absorbed by the increase in National Living Wage and National Insurance made earlier this year.
Scott Sanderson, Healthcare Partner at Hawsons, commented:
“Whilst this funding has been welcomed by a financially strained sector, it does not close the funding gap. Moving forward, this sector needs to receive increased funding from the government so they can provide the valuable service they provide to communities across the country”.
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