Economic analysis of the pharmacy sector

 Economic analysis of the pharmacy sector


NHS England (NHSE) commissions pharmaceutical services from the community pharmacy sector in England, to dispense medicines, and to provide wider clinical services to NHS patients. In October 2022, as a part of the final negotiated community pharmacy Contractual Framework (year 4 and year 5) deal, NHSE committed to “commission an economic analysis of NHS pharmaceutical services through an independent review, using data provided by contractors, and [to] work with the Pharmaceutical Services Negotiating Committee on the review.”

NHSE has now commissioned Frontier Economics and IQVIA to carry out this economic analysis of NHS pharmaceutical services.


The project will use available evidence to answer, as accurately as possible with that evidence and within the agreed approach, three questions:

  • What are the full economic costs of delivering NHS pharmaceutical services, and how do these costs vary across and within: different types of pharmacy; different mix of dispensing activity and services; and different locations?
  • Are NHS community pharmacy businesses sustainable under the current funding model, including the current trajectory of the sector? To what extent are NHS services at risk of interruption?
  • Which clinical services can be most efficiently delivered from community pharmacy as compared with general practice or the wider NHS?

The project will draw on data provided by contractors across the sector. Work began in April 2024 and final outputs are expected in early 2025.  

Throughout the process feedback will be sought from stakeholders based on the agreed consultation process.   

Please contact Nicholas Woolley or Nick Fitzpatrick if you have any questions about the work.