Community pharmacies in England are bracing themselves for even more financial hardship as they begin 2025 following their negotiating body’s warning last month that its analysis of January’s Category M price list revealed there will be an overall reduction in reimbursement of around £34 million per quarter.

Community Pharmacy England (CPE) said the reduction was a combination of factors, including a £17.9 million margin adjustment following the latest margins survey of independents, “movements in the underlying market” such as in buying prices of medicines which “are systematic and not subject to negotiation” and the entry of new generics into Category M.

CPE said the margin survey up to the first quarter of 2024-25 indicated there was an over-delivery of margin “and therefore in the normal course of business, a reduction in the Drug Tariff would be expected.”

CPE insisted it told the Government there should be no reduction in January’s Tariff as stretched pharmacies still wait for news on contractual terms for 2024-25 as they battle increasing costs and try to stay afloat.

“As well as stressing the unsustainable financial pressures already being experienced by English pharmacy businesses, making further reductions impossible to absorb, we argued it was inappropriate to enact material changes to pharmacy contractor funding while contract negotiations for 2024-25 remain unresolved,” CPE said.

Pharmacies continue to dispense at a loss and CPE also said it remained “concerned about the significant number of products being reimbursed at economically unviable prices.”

“The NHS focus on low prices over stability of supply continues to drive disruptions in availability, leading to hundreds of products requiring emergency concession status, and putting patients’ access to medicines at risk,” CPE said.

Insisting ministers pressed ahead with the margin adjustment this month despite its warnings about the impact on pharmacies, CPE added: “Further reductions in reimbursement prices will only exacerbate these issues.”