Community pharmacy funding: where things stand as 2026 approaches

As community pharmacies head into 2026, funding remains one of the most closely watched issues across the sector. The past year has brought long-awaited investment through the Community Pharmacy Contractual Framework (CPCF), but rising costs and ongoing pressures mean attention is already turning to what comes next.

 

Looking back: what was agreed in 2024/25 and 2025/26?

After several years of flat funding, early 2025 marked a significant moment for community pharmacy. The UK Government, Department of Health and Social Care (DHSC), NHS England and Community Pharmacy England (CPE) concluded negotiations on the CPCF for 2024/25 and 2025/26, delivering what was widely described as the largest uplift in pharmacy funding for over a decade.

Under the agreement, baseline CPCF funding for 2025/26 was set at £3.073 billion, with a further £215 million allocated to support services linked to the Primary Care Recovery Plan, including Pharmacy First.

Alongside the headline funding increase, changes were made to how pharmacies are paid. These included an uplift to the Single Activity Fee and improved remuneration for several clinical services. Service expansion also formed part of the deal, with antidepressant medicines added to the New Medicine Service and emergency contraception commissioned nationally through the Pharmacy Contraception Service.

The settlement was welcomed across the sector. The Royal Pharmaceutical Society (RPS) described it as “the best deal community pharmacy has had in a decade”. RPS England Chair Tase Oputu said the agreement marked “a significant step forward in addressing the long-term underinvestment in the sector”, while acknowledging that wider economic pressures continued to affect pharmacy businesses.

For many pharmacy teams, the deal provided a sense of relief after years of financial strain. However, it was also clear from the outset that the uplift would need to be seen in the context of rising costs.

 

Why do cost pressures remain a concern?

As 2025 drew to a close, sector bodies began to warn that the funding increase, while welcome, was being quickly eroded by inflation and workforce costs.

In December 2025, the National Pharmacy Association (NPA) published analysis estimating that community pharmacies in England will face at least £275 million in additional costs during 2026.

The NPA highlighted several drivers behind this figure, including increases to the National Living Wage, ongoing inflation affecting utilities and supplies, and continued growth in prescription volumes. It's modelling suggested that an 8.9 per cent uplift in NHS funding would be required simply to cover inflation and wage pressures, rather than delivering any meaningful additional investment.

Commenting on the findings, Henry Gregg, Chief Executive of the NPA, said:

“Pharmacies stand ready to help the government move care from hospitals into our communities as expert health centres on the high street. Pharmacy funding has been badly eroded over the past decade, causing hundreds of pharmacies to close and forcing many more down onto their knees.”

These warnings reinforced concerns that, without further progress, the gains made through the 2025/26 settlement could be difficult to sustain.

 

Where do negotiations for 2026/27 now stand?

With the current CPCF now in place, attention has shifted firmly towards negotiations for 2026/27. CPE has been clear that closing the gap between funding and the real cost of delivering NHS services must be a priority, highlighting the ongoing financial pressures and the risk these pose to service delivery and patient access.

In her most recent CEO Blog post, CPE Chief Executive Janet Morrison has previously stressed that while the most recent settlement represented a step forward, it did not resolve the underlying sustainability challenge. She has warned that without a funding model that reflects real-world costs, pharmacies will continue to face difficult decisions about staffing, services and opening hours.

At this stage, formal details of the 2026/27 settlement are yet to be agreed. However, sector bodies are actively gathering evidence from pharmacy teams to inform negotiations and strengthen the case for sustainable funding, with updates published regularly here.

 

Why is the next settlement so important?

For pharmacy owners, managers and frontline teams, the outcome of the next CPCF negotiations will have direct, practical implications. Funding levels influence everything from workforce planning and service capacity to the ability to invest in premises, technology and patient care.

Community pharmacies are increasingly positioned as a first point of contact within primary care. Services such as Pharmacy First rely on funding arrangements that support safe delivery and recognise the workload involved. Without this, there is a risk that pressure will continue to build across the system, and both the quality and efficiency of such services may be diminished.

As negotiations unfold, staying informed and engaging with representative bodies will be key for pharmacy teams across the UK. CPE especially, are encouraging pharmacy owners to get involved and share their experiences via polls and surveys. All the data collected helps to strengthen a case and shape discussions around progressing the sector and securing sufficient funding.

In summary, with negotiations facing the same potential delays as seen in previous years, current funding pressures will continue to negatively impact the community pharmacy sector until change is made.