The National Pharmacy Association’s board led by its new chair and vice-chair has issued a series of recommendations it believes will improve the pharmacy contract in England, including creating a fairer environment for independents and ensuring pharmacies are paid on time and not dispensing at a loss.

The board, which met for the first time last month following the elections of Nick Kaye and Jay Badenhorst as chair and vice-chair respectively, laid out its plans for the contractual framework which it insisted was “broken and cannot be repaired in its current form.”

It said progressive thinking was required to enhance the contract and it needed to be “aligned to the NHS and its objectives.” The Board also insisted the contract must allow for a level playing field and a “fair deal for independents” so independent contractors “are not disadvantaged.”

“Independents are unfairly treated by the ‘averaging’ processes on which the current arrangements rely,” the NPA said. “It is harder for them to secure the best medicine prices in the first place yet clawback is applied equally across the board. Furthermore, independents don’t benefit from the averaging effect which allows multiples to effectively hedge their risk.”

The NPA said it wanted pharmacies to be paid “in a timely fashion” and criticised the current system of excess margin and clawbacks which it insisted were barriers to investment and forward planning.

“They undermine confidence to modernise and implement new clinical services. How can it be acceptable to be told that you made too much money one or two years ago so you are getting a bill?” it said, calling on the government to value the entire service community pharmacy provides, including non-essential services that patients regard as essential but are not funded.

The NPA said “a holistic recompensed offering on actual activity delivered and value created, using more real-world data” was needed, adding there should be “no more dispensing at a loss for any items.”

“It is an absurdity that pharmacies often buy blind and effectively lose money the harder they work to track down stock. Overall, the NHS dispensing service should pay for itself and service income should be additional to dispensing income,” it said.

The NPA’s other recommendations included empowering and enabling contractors to “be the master of their own destiny,” avoiding situations where pharmacy owners are at the mercy of wholesale price rises or the reluctance of GPs to refer patients to the community pharmacy consultation service.

Insisting “the link between supply and service is our history and our future,” the NPA said it wanted services to be built on supply and urged the government to put more money into community pharmacy so pharmacies are not so reliant on dispensing income.

“This is the very opposite of the aspirations stated in the NHS Plan. A multi-year deal should contain guaranteed uplifts in line with inflation as a minimum,” it said. “Any surplus (excess margin) should be recycled into the development of pharmacy services. This is the approach adopted in Wales.”

Finally, the NPA urged the Department of Health and Social Care and NHS England to introduce “independent financial regulation” to counter “the risks of a monopsonistic purchaser using its power to achieve short term gain at the cost of sustainability.”

“The current imbalance of power between the parties to contractual negotiations serves no-one in the long term,” the NPA said.

Badenhorst warned community pharmacy cannot “wait until the current framework limps to its finish line in 2024 before giving serious thought to the new race we must all run in the future.”

“Years more of the same would be totally unacceptable,” he said. “Tinkering at the edges of the current arrangements as the basis for a new deal could not achieve the transformation that is needed.”