What does the 2026/27 pharmacy contract actually pay?

How much is the 2026/27 contract worth?

The 2026/27 Community Pharmacy Contractual Framework (CPCF) is worth £3.636bn. That is £340m more than 2025/26, a rise the Department of Health and Social Care (DHSC) puts at 10.3%. DHSC, NHS England and Community Pharmacy England (CPE) published the settlement on 29 May 2026, two months into the financial year.

The headline needs one qualification. For the first time, Pharmacy First sits inside the main budget rather than being funded separately. In 2025/26 the CPCF was £3.073bn plus £215m for Pharmacy First. The 2026/27 figure is a single envelope covering dispensing, national services and Pharmacy First together.

The table below shows how the envelope has moved over three years. The figures are from the two GOV.UK settlement documents, published on 31 March 2025 and 29 May 2026.

CPE's committee accepted the deal without calling it sufficient. Janet Morrison, its chief executive, said accepting it "does not mean we think it is enough - for this year or the future". She added that refusing it would have put more pharmacies, and the services they provide, "at greater risk". That framing matters. The deal buys a year, and it commits both sides to a joint reform programme on reimbursement and margin. It does not settle the argument about what the service costs to run.

What happens to the single activity fee?

The single activity fee (SAF) rises from £1.46 to £1.52 per item. That is 6p, or 4.1%. The rise is backdated to May 2026. The settlement promised "early advanced payments from June to swiftly benefit contractors", so the money reached advance payments before the Drug Tariff caught up.

The SAF is the one fee nearly every pharmacy earns on nearly every item. It matters here because the deal put all of the fee uplift into it. Every other dispensing and service fee stays where it was. CPE's factsheet gives the recent history, summarised below.

Scale it to your own numbers. A pharmacy dispensing 8,000 items a month gains £480 a month, or about £5,760 a year. At 10,000 items it is £600 a month. Those are simple multiplications, not official estimates. They also ignore the fact that the SAF is adjusted during the year to keep fee spending inside the envelope. If volumes rise faster than forecast, the rate can be trimmed. For how that mechanism works, see how the single activity fee works.

Which fees stay the same?

Every fee other than the SAF stays at its 2025/26 level. DHSC says this was deliberate, to concentrate the available money on the SAF. The table lists the main fees you will keep claiming. The values come from the 2025/26 settlement document on GOV.UK, which set them from April 2025, and they run for a second year.

The fixed payment is still volume-gated. You need 30 or more clinical pathway consultations in a month for the full £1,000, or 20 to 29 for £500. The 2025/26 deal cut the clinic blood pressure fee from £15 to £10 and raised ambulatory monitoring from £45 to £50.85. Those levels now stand for a second year. The flu vaccination fee is set separately and rose to £10.06 from 1 April 2026. For a ranking of which services earn most for the effort, see which NHS pharmacy services actually pay in 2026.

What changes on medicines margin?

Allowed medicines margin rises by £200m to £1.1bn for 2026/27. Margin is the money you retain when you buy a medicine for less than the Drug Tariff reimburses. It is a target, not a fee. DHSC sets the total and moves Category M prices up or down to hit it.

Two other reimbursement moves sit alongside it. Category M generic prices were adjusted upwards by £20m in April 2026. And DHSC will write off historic margin over-delivery. The settlement puts this at £219m confirmed up to the end of September 2025, which is £166m net of fee under-delivery, plus up to £73m for the second half of 2025/26. CPE rounds the total to "up to £239m" of net over-delivery.

The write-off matters more than it sounds. Over-delivery is margin the sector earned above target in past years. Without a write-off, DHSC recovers it through lower Category M prices later. Writing it off means those clawbacks will not happen. It does not fix the day-to-day problem of buying above the reimbursement price. That question, along with margin distribution, goes into the reform programme. If you want the mechanics, see how price concessions work and why pharmacies dispense at a loss.

What do the new prescribing payments pay?

From autumn 2026, an NHS independent prescribing service pays a one-off £500 set-up fee and £525 a month for infrastructure. The £500 is released once you have signed up and have a confirmed go-live date with an assured electronic prescription service (EPS) supplier. Consultation fees match the fees already paid for the same work under a patient group direction.

The service lets a pharmacist prescriber work in three ways. First, prescribe within the existing Pharmacy First clinical pathways and the contraception service. Second, run up to five new prescribing-only pathways, each subject to a clinical reference group. CPE's briefing lists bacterial conjunctivitis, allergic conjunctivitis, oral thrush, skin infections and respiratory tract infections as the options under consideration. Third, prescribe an alternative item when a supply problem affects the original prescription, provided arrangements exist with the original prescriber.

CPE signed while warning that the service risks "being set up to fail" without more investment. Its stated concerns are workload, enhanced clinical responsibility, clinical governance and infrastructure. The £525 a month has to cover all of that. Whether it does depends on your prescriber's hours and your consultation volume. For the sums, see whether your pharmacy should offer the new NHS prescribing service. For the clinical model, see how independent prescribing will work in Pharmacy First.

What changes for Pharmacy First, NMS and claims?

The Pharmacy First bundle stays. To receive the monthly fixed payment you must still be registered to provide the hypertension case-finding service and the contraception service. Earlier plans to add minimum ambulatory monitoring and contraception activity to that bundle have been dropped, according to CPE.

Caps on the highest-volume pharmacies also stay, and the mechanism extends to prescribing consultations. DHSC and CPE agreed "high level caps" for hypertension case-finding and Pharmacy First minor illness, aimed at outliers, with details to be agreed during the year. For the NMS, contractor caps come down to 0.9% of monthly prescription items, applied to activity from June 2026.

The claim window is the practical change most owners asked for. The one-month window for Pharmacy First and the NMS is retained. A new late-claims process will accept submissions up to two months after it closes, giving three months in total. As of early June 2026, CPE said this would be introduced "later in 2026". Until it goes live, the deadline is still the end of the month after the activity. See the three-month claim window for Pharmacy First for the detail.

The Pharmacy Quality Scheme returns at £20m. It started in June 2026 with an aspiration payment of 80%, up from 75%, due on 1 September 2026. The claim window opens in July 2026. There is no separate national clinical audit in 2026/27, and health campaigns are capped at two national campaigns plus two chosen by your integrated care board. Two years in, Pharmacy First is still the service most likely to change your monthly numbers; see whether Pharmacy First is working two years on.

What else is in the deal, and when?

Three regulatory changes follow in autumn 2026, with revised terms of service expected in October 2026. Each one changes how you run the pharmacy rather than what it earns.

The timeline below pulls the dates together. Several items were still marked "to be agreed" on 29 May 2026, so treat the later ones as targets.

What does it mean for your monthly income?

For most pharmacies the visible change is 6p an item, backdated to May. On 8,000 items that is £480 a month. On 12,000 items it is £720. The rest of your NHS income looks like last year's: the same consultation fees, the same fixed payment thresholds, the same NMS fee. Margin is the bigger variable, and it is set at sector level, not per pharmacy.

Trade bodies read the deal differently. The Company Chemists' Association called the prescribing service "a generational opportunity". The National Pharmacy Association's chair, Dr Olivier Picard, said the 10.3% uplift would be "mostly eaten up" by rising costs. The Independent Pharmacies Association estimated that an average branch still faces a shortfall of nearly £60,000 a year. Those claims rest on different cost assumptions, which we test in whether the 10% funding uplift is enough.

What the deal does not do is as important as what it pays. It does not change reimbursement for medicines bought above Drug Tariff price. It does not reopen the Pharmacy Access Scheme until 2027/28. And it does not set a funding path beyond March 2027. All three go into the joint reform programme that DHSC and CPE committed to, which is where the 2027/28 contract will be shaped. For the wider outlook, see what is coming for UK pharmacy in 2027.

Key takeaways

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