A conflict that has sparked three judicial reviews in Northern Ireland is disappointing, frustrating, demoralising and ongoing, says Terry Maguire…

Contractors are on a war footing. We mustered our vanguard at Portadown in October and had a Zoom battalion online. Our leaders told us they felt it their duty to fully appraise us of the worsening situation. We didn’t need the detail. Individual business accounts have shrunk month on month since the summer.

The Department is aware and has made a £5.3 million gesture which they announced to some fanfare in the media calling it an “investment”. Calling it an investment was somewhat disingenuous as the monies amounted to a three month break in repayments of a Covid loan.

The current funding crisis is viewed as a pincer movement against contractors and the government is being blamed. From the right flank, Covid payments have stopped and Covid loan repayments started and from the left flank we find little opportunities to secure decent profit margins.

One example was given at the meeting: omeprazole 20mg caps now cost 81p, the Tariff price is 84p but when 10 per cent is clawed back as contractually agreed we lose 5p per box.

Across all items, and with the loss of Covid payments, there is potentially £20 million lost to contractors this year compared to last year and it’s understandable why contractors are so angry.

Government funding of pharmacy services is more complicated than Einstein’s Theory of Relativity! The global sum is fixed and transparent and only grows at a glacial pace. The Covid monies were considerable and very welcome and included vaccination fees, which was a great bonus, but this was temporary and now not much of an income stream.

A main item of our income is retained purchase profit (RPP) and this is the point of persistent conflict. Contractors are happy when there are plenty of generous discounts around such as happened during the pandemic.

Back then wholesalers were stocked to the rafters to avoid a Brexit worst-case scenario of medicine shortages. Then, to use the same example, I could buy omeprazole at 35p with an additional 10 per cent discount. The margins survey, used to reign in these profits, will eventually punish us.

The problem is that when the margins are poor, we cry foul and demand government intervention. I seem to be alone in thinking this way of running a business is crazy, and I’m possibly alone among contractors in thinking we should be moving towards exclusively service-based funding.

The concessionary pricing scheme should be sensitive enough to accommodate times of high price volatility, but it doesn’t deliver profits and it lags behind the real market. Many contractors seriously think twice about supplying medicines that shoot way above tariff price. This filters through to medicine shortages - which are extreme at the moment - and becomes a problem for patients who are potentially put at risk.

The pharmacy contract is seriously flawed and needs to be redesigned and renegotiated but it is unlikely that there will be much of an appetite among contractors for a move away from the current purchase model.

There is the constant hope that the Department will eventually just give up and let us get on with making a profit where we can find it, while they go lightly on the Category M dialling-down button or just scrap it all together. But that is not going to happen.

This constant and continuing conflict, and the reason for three judicial reviews here in Northern Ireland, is disappointing, frustrating and demoralising. It is disappointing particularly at a time when service development is really getting into its stride, and we are seeing new commissioned services coming on line regularly.

The Pharmacy First EHC and UTI services have been launched and we are doing seasonal vaccinations for Covid booster and flu again. We hope to have a Pharmacy First winter ailments service in early December.

Contractors rightly point out that the fees for these services are insufficient to cover the hole created by the RPP mechanism. But we are back to discussing militant action of which I am not a fan.

What action to take, then, is the question? The old actions have been proposed: opting out of on-call and rota services; stopping new MDS requests from GPs; a refusal to speak to hospital pharmacists; possibly a complete withdrawal of MDS service and concerns about delivering all new services.

If contractors decide to dig in and refuse to deliver services that would be a huge mistake.

Terry Maguire is a leading community pharmacist in Northern Ireland.