Day Lewis CEO Kirit Patel is no stranger to a tough financial climate. His first experience of government funding cuts was back in 1988, when the “very painful” loss in income left him struggling to pay the bills. Then came the 2007 Category M clawbacks, which occurred just after he’d bought 40 new pharmacies and hit Day Lewis to the tune of £6 million.

They were undeniably difficult times for the entrepreneur. But he feels he has learned from the experiences, which have shaped his key to survival: “Plan for the worst, hope for the best.” So when faced with the 6% cut to England’s funding, he is following exactly that mantra. And he advises independents to do the same as they square up to the three major challenges in the government strategy:

Challenge 1: Medicines optimisation

What the government wants: There is a clear desire to make sure patients are taking the right medicines in the right way, says Mr Patel. On one hand, this is good news for community pharmacy, which has traditionally assumed a leading role in medicines optimisation. On the other hand, Mr Patel fears the government sees opportunities elsewhere.

Mr Patel believes the medicines optimisation agenda is behind the government’s enthusiasm for placing pharmacists in GP surgeries. “The doctor can signpost straight to the pharmacist in the surgery,” he explains. This poses a clear threat to community pharmacy’s role. “How long will it be before we lose MURs and the new medicine service [NMS]?” he asks.

What pharmacy can do: The sector needs to “fight” to maintain its medicines optimisation role, says Mr Patel. “Otherwise it’s going to be pharmacists working in GP surgeries and I don’t wish to see our profession divided,” he stresses. “Focusing on service income is the way – it’s the future.”

For this reason, he urges independents to fill their MUR quotas. He is “surprised” that the average number of annual MURs per pharmacy is only 290 – 110 short of the maximum – considering that it is the “most basic” of services. “That’s why the government has no faith that a service will be taken and carried out correctly,” he says. He is equally passionate about realising the full potential of the NMS. He says the principle of the service – talking through new medication with the patient and following up with phone calls – is a pharmacist’s “duty” and getting paid for it is “a bonus”.

Challenge 2: The digital agenda

What the government wants: Making better use of technology is a key priority for the NHS. It is keen to see the electronic prescription service (EPS) rolled out nationwide – which, as Mr Patel points out, will make it easier for patients to nominate distance-selling pharmacies. Combine this with the government’s plans to make it easier for online pharmacies to enter the market, and they look set to become even more of a threat to their bricks-and-mortar counterparts. This hasn’t happened by accident. Mr Patel says the government is “unhappy” with the slow rate of progress made by online pharmacies and wants to increase the momentum.

What pharmacy can do: Independents need to secure as many EPS nominations as possible, stresses Mr Patel. “EPS nomination is what protects our business,” he argues. “If we don’t sign up those patients, they’ll be gone.”

Mr Patel also advises pharmacies to be aware of technology on a wider level. Those who aren’t may lose out, he warns. For this reason, he advises all pharmacies to have their own website with a function that allows patients to order repeat prescriptions online. “We must manage prescriptions and engage with patients electronically,” he says.

Ultimately, though, Mr Patel has words of comfort for those frightened by the digital takeover. He can’t see bricks-and-mortar pharmacies folding in favour of online-only operations. Online pharmacies can’t offer services, he points out, and are unlikely to attract large numbers of elderly customers. “At Day Lewis, the average age of the patients we deliver to is 76 years old – they don’t know how to go online and order a repeat,” he explains.

Challenge 3: Remote dispensing

What the government wants: By now, most pharmacists will be familiar with the government’s desire to push forward hub-and-spoke dispensing. This was the reason behind the plans to legally open up this model to independents by October. The government will consult on the issue, but Mr Patel believes it has already made up its mind. “That’s not a consultation, that’s happening,” he says.

What pharmacy can do: A change in the law surrounding hub-and-spoke dispensing isn’t necessarily a bad thing. As Mr Patel points out, implementing the model at Day Lewis has enabled pharmacy teams to do “the things that add value to the patient”. Allowing independents to go down the same route could “level the playing field a little bit”, he says.

The ideology behind the decision, though, is more problematic. The government is under the impression that the model will generate cost savings – one of the factors cited behind the 6% cut to funding in England. This is unlikely to be the case. “There is no saving, unless there’s a service income stream to compensate,” he says. For this reason, he advises independents to think carefully before changing their business model. Instead, he believes the independent sector should focus on its strengths: a strong relationship with customers and ability to adapt to “the service industry” he believes pharmacy will become.

Kirit Patel spoke at the Sigma conference in Jamaica in February

How are you going to plan for the funding cuts?

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