Worrying number of pharmacies running a deficit

Analysis

Worrying number of pharmacies running a deficit

In Analysis

A recent analysis commissioned by the General Pharmaceutical Council suggests a worrying number of pharmacy businesses are operating at a deficit.

The GPhC commissioned the report from consultancy Ernst & Young (EY) to determine the impact regulatory fees have on pharmacies’ overall performance. Out of 14,313 pharmacies registered with the GPhC in Britain, the report looks at 5,424 premises that are part of a large multiple; 1,401 from medium size chains; 20 independents; and three online pharmacies.

EY reports that when all categories are considered as a whole, 52 per cent of pharmacies in the sample are operating at a deficit. This figure is skewed by the fact that the 20 independents (half of which were operating at a deficit) contribute as much to the average as the multiple stores (40 per cent operating at deficit based on overall company aggregates), of which there were far more.

However, even when this is accounted for the figures are stark. In particular, independent pharmacies described as ‘isolated’ – meaning they are the only pharmacy operating in a given town – are at risk, with seven in 10 in financial deficit.

All three online pharmacies were found to be in deficit, although EY says this “may be due in part to accounting adjustments” as for two of the three there were indications of “underlying financial surpluses”.

‘Fragile’ sector

EY reports that the pharmacy sector is “demonstrating a notable fragility”. Government funding cuts and reductions in drug reimbursement have had an impact on financial viability for many pharmacies, it says, adding that “rising business rates and the impact of business rates on smaller businesses are also well-known challenges”.

With the GPhC proposing to increase registration and renewal fees for pharmacy premises by £103 to £365 per year from October, the report concludes that regulation fees make up such a small proportion of pharmacies’ overall deficits that they are unlikely to be a “major driver” of business performance – either at current levels or the proposed higher rate.

However, “the fragility of the system means care should be taken when considering the extent of fee rises, and that a policy where differential fees are considered for segments of the market based on their ability to absorb them may be required”.

In particular, isolated independent pharmacies are more exposed to any fee rises and future policy “should consider the sustainability of services” being offered by these pharmacies, the report recommends.

Record my learning outcomes

Analysis

Inspiring stories related to health, fitness and the pursuit of wellbeing

Share:

More like this

bookmark_icon_off
Analysis

Pharmacy and the new NHS

The first in a series on community pharmacy and the changing NHS landscape.

2 Min Article

bookmark_icon_off
Analysis

Clinical briefing: Opioid deaths

What needs to be done to reduce the harm caused by opioid dependency?

2 Min Article

bookmark_icon_off
Analysis

Pharmacy workload rises by 50% in Northern Ireland

Work pressures in Northern Ireland’s community pharmacies have risen by half over the past decade, a new KPMG report indicates. 

1 Min Article

bookmark_icon_off
Analysis

Tackling barriers to independent prescribing

Pharmacist independent prescribing is billed as the key to a more clinical future but there are many hurdles still to be overcome.

2 Min Article

bookmark_icon_off
Analysis

Report reveals impact of Covid on female health workers

The NHS Confederation's Health and Care Women Leaders Network found "a significant rise" in female staff reporting poor health.

2 Min Article

bookmark_icon_off
Analysis

Dispensing GPs driven by 'profit motive' report finds

Dispensing GPs prescribe in ways that are "consistent with a profit motive," a report finds. 

2 Min Article

bookmark_icon_off
Analysis

Massive rise in mental disorders among health workers in Covid peak

The first peak of the Covid pandemic last year saw a 300 per cent rise in healthcare workers suffering from mental health problems.

1 Min Article

bookmark_icon_off
Analysis

Pharmacy capable of delivering millions of Covid jabs, survey finds

Over 90 per cent of community pharmacists would be eager to take part in an annual Covid-19 booster vaccination programme similar to the flu jab service given the right funding and support, a new survey shows.

2 Min Article

bookmark_icon_off
Analysis

Over 90% of pharmacists want yearly Covid jab service

Pharmacists want to lead on an annual service similar to flu jabs, but have concerns around capacity and policymakers' attitudes, new data shows.

2 Min Article

bookmark_icon_off
Analysis

CCGs to be 'subsumed' into ICS before end of 2021

ICSs will also take on community pharmacy commissioning once they are established.

1 Min Article

bookmark_icon_off
Analysis

IT and the changing face of pharmacy practice

Information technology has proved to be a great enabler during the coronavirus pandemic. Now the falling cost of robotics and the use of ‘big data’ looks set to change the face of pharmacy practice.

8 Min Article

bookmark_icon_off
Analysis

OTC analgesic prescribing fell just 4% after NHS guidance

NSH guidance aimed at reducing prescriptions for OTC medicines saw a drop of just 4.4 per cent for simple analgesia prescriptions in its first year.

1 Min Article

bookmark_icon_off
Analysis

Pharmacist safety reports plummet by 43%

A distinct trend towards reduced reporting of patient safety incidents by pharmacies has continued throughout the Covid-19 pandemic says the NPA.

1 Min Article

bookmark_icon_off
Analysis

'More funding' needed for representation reforms

The group set up to take forward the Wright reforms will hold a virtual event next month to update contractors.

1 Min Article

bookmark_icon_off
Analysis

Local authorities get funding to improve access drug treatment services and to expand naloxone and needle and syringe programmes

1 Min Article

bookmark_icon_off
Analysis

Six in 10 struggling to stay positive in third lockdown

Many in the UK are struggling to maintain a positive mental outlook during the current lockdown, a recent Ipsos MORI poll reveals.

1 Min Article

bookmark_icon_off
Analysis

Long read: Wearable health technology

While some wearable health technology still focus purely on step counts, most are no longer just about fitness but overall behaviour modification and everyday healthcare.

3 Min Article

bookmark_icon_off
Analysis

EPS nominations and NHS app usage on rise during Covid

There were 41.34 million EPS nominations by 11 December this year, up by 8.27m over 12 months, according to NHS Digital

1 Min Article

bookmark_icon_off
Analysis

Why we need ‘left shift’ and not ‘left drift’

Mike Proctor, non-executive chair of health consultancy Conclusio, makes the case for community pharmacy to claim a much bigger role in creating secondary care capacity.

4 Min Article

bookmark_icon_off
Analysis

Why we need ‘left shift’ and not ‘left drift’

Mike Proctor, non-executive chair of health consultancy Conclusio, makes the case for community pharmacy to claim a much bigger role in creating secondary care capacity.

4 Min Article

Recommended Learning

bookmark icon off
Sponsored education

Managing hay fever: help meet your customers' needs

This module will improve your hay fever knowledge, helping you to understand its impact on sufferers and recommend the right products to ease symptoms

15 Min Module

bookmark icon off
Sponsored education

Challenge your thinking on warts and verrucas

Discover different treatment options for warts and verruas and when to recommend them to your customers, based on their individual needs

17 Min Module

Sponsored education

Advising on very dry and eczema-prone skin

This video will guide you through a consultation with Michelle, a customer with very dry skin, and help you recommend suitable products to help

2 Min Module

bookmark icon off
Sponsored education

Sore throats and antibiotic resistance

This module will help you to understand and educate customers about the risks of antibiotic resistance, and recommend products to help them effectively manage their sore throat symptoms.

 

10 Min Module

bookmark icon off
Sponsored education

Confident pet health conversations

Learn 3 key steps to having more confident conversations with customers about pet health products.

3 Min Module

bookmark icon off
Sponsored education

Biological medicines and biosimilars

This module explores biological and biosimilar medicines, and will increase your understanding of the guidelines surrounding the brand prescribing of these drugs and your role in their supply

10 Min Module