Pharmacy clusters – what they are and why DH wants them gone

The government has used the term several times since it announced cuts to pharmacy funding – but what is a pharmacy 'cluster' and why is it so keen to remove them?

Richmond-House-L_0.jpg
DH believes pharmacy clusters discourage efficient pharmacies with large prescription volumes

The Department of Health (DH) first used the term "clustering" to describe areas where there are several pharmacies in its open letter announcing a 6% cut to pharmacy funding at the end of last year.

Since then, it has used the term in its justification for scrapping establishment payments and plans to make it easier for two pharmacies to merge.

So what are clusters, and what does the DH intend to do about them?

What's the definition?

The DH defines “clustering” as a situation where three or more pharmacies lie within 10 minutes’ walk of one another. It claims that 40% of English pharmacies are currently situated in a cluster.

Why doesn’t the DH like them?

The DH believes that the current system of establishment payments – which it intends to abolish – encourages pharmacies dispensing “relatively low” volumes of prescriptions to cluster along high streets or around GP surgeries, it said in source papers released ahead of a pharmacy stakeholder event last month.

Rather than "efficient pharmacies with large prescription volumes”, contractors are tempted to maximise their funding by owning several low-volume pharmacies in a cluster, which are each paid an established payment, the DH claims.

What does it plan to do about them?

As well as amending the law to allow pharmacies in a cluster to merge, the abolishment of establishment payments will also reduce the incentive to operate pharmacies in a cluster, the DH believes.

What does the sector think?

An interim summary of responses to the government’s consultation on the funding cuts revealed that not everyone agrees with the DH’s assumptions about clusters.

According to the DH, some respondents said clusters are not necessarily inefficient, and may be the result of high prescription volumes in some areas or the “commercial viability of certain locations”.

Last week, Pharmacy London chief executive Rekah Shah stressed that clusters are needed in London because of the "tailored" services they offer to meet the "diverse cultural and language needs" in the capital.

Result

Do you think clusters of pharmacies lead to low prescription volumes?

Yes

59%

No

34%

Undecided

7%

Total votes: 490

Do you consider your pharmacy to be situated in a “cluster”?

We want to hear your views, but please express them in the spirit of a constructive, professional debate. For more information about what this means, please click here to see our community principles and information

Sign in or register for free

Latest from News

DH to place ‘explicit restrictions’ on funded blood pressure checks

  • comment

The pharmacy hypertension service specification is set to be updated to exclude patients who request “frequent measurement of their blood pressure”.

CPE hiring independent chair at £50k for 3-4 days a month

 
• By 
 • comment

CPE is recruiting a new independent chair to “provide strategic leadership” – the position pays £50k a year and only requires a “time commitment” of 3-4 working days per calendar month.

CPE: Almost half of £645m recovery plan funds unspent

 
• By 
 • comment

The pharmacy negotiator estimates some £296m of remaining primary care recovery plan funding “will have been used by NHS England (NHSE) in other ways”, C+D has learned.

More from Funding

Pharmacy stop-smoking service expands to ‘non-registered’ staff

 
• By 
 • comment

The new pharmacy contract has expanded who can deliver the smoking cessation service, as well as adding the provision of two drugs via PGDs.

exclusive

Revealed: 2024/25 contract cash uplift already paid

 
• By 
 • comment

Following this week’s announcement of the long-awaited pharmacy funding deal, C+D has learned that contractors have already received the additional £106 million in retrospective funding for 2024/25.