It’s been widely acknowledged that pharmacies are the most efficient part of the NHS but there’s efficiency and there’s being pushed into operating at a loss and that’s the situation many if not most community chemists now find themselves in. Pharmacies are independent businesses but more than 90% of their business comes from NHS-commissioned services: to supply medicines, to give patients health advice, Pharmacy First and other clinical services.
People relied on us during Covid and have continued to do so. But we have faced real-term cuts of more than 30% over the last 10 years while the workload has increased by more than half – so we’re doing much more for less money and it isn’t sustainable. We had this year’s settlement just before April last year and it was a better one because ministers had been listening and could see the looming crisis. But they couldn’t put right ten years of funding cuts in one go and immediately afterwards we had the impact of higher business rates, employers’ National Insurance rises and the National Minimum Wage. Between them, they entirely wiped out the increase we got.
In the past week we’ve been listening to the hospitality sector talking about the rise in costs including NI and the minimum wage and we’re in exactly the same position. Except we can’t simply raise our prices. For most pharmacies, about 90% of their business is NHS-related. That means fixed charges for prescriptions and drugs.
We can’t just charge more because our costs have gone up, apart from for things like toothbrushes and toothpaste but they form a very small part of most businesses. Some pharmacies offer private services, like Mounjaro jabs or ear wax removal, but these are then subsidising their NHS work which simply doesn’t pay enough.
So there have been more closures and the biggest companies have been consolidating. The biggest provider, Boots, closed more than 300 pharmacies over the last few years. The second biggest, Lloyds, sold up and moved out of the business entirely. Sainsbury’s closed pharmacies because it makes more profit from the floorspace selling cans of beans. It might be a good community offer but it’s just not economic.
So unless pharmacies can subsidise their contracts with private services, they go out of business. And ultimately, most closures have happened in the poorest areas because those patients don’t have extra money to splash out on private services. If a pharmacy suddenly goes out of business that’s a massive stressful loss for the entire community.
The impact on patients is real and immediate if you can’t get your medicines. People are getting really frustrated but, with problems in the supply of medicines, pharmacies are expending so much energy trying to source drugs and then getting grief when they can’t get prescriptions on time and patients are left waiting.
There’s got to be more money put into the NHS pharmacy contract and the Drug Tariff, what we’re paid for dispensing medicine, but also for the overheads – like lighting, heating and staffing – to keep the doors open. We haven’t started negotiations yet for next year’s settlement but we’ve already been given gloomy warnings that there isn’t enough money in the NHS pot.
The bottom line is that many pharmacy services are crumbling. The whole system is incredibly fragile and the really small independents – those who might own one or two pharmacies – really stuck. It’s not easy for them to exit because their pensions may rely on them selling that business. But if they’re not profitable, they can’t sell up.
We’re in a very grim situation. Pharmacies are a vital community asset and too many are at risk. And I’m afraid it all comes down to money.
- Janet Morrison is Chief Executive of trade body Community Pharmacy England
This story originally appeared on Express.co.uk
