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'No longer viable': York pharmacies to merge amid spiralling staff costs

Two York pharmacies are set to merge, with staff costs at a 100-hour branch making the site “no longer viable”, a pharmacy group based in the city has said.

Richard Harrison, director of independent pharmacy group Citywide Health, told C+D yesterday (May 24) that the pharmacy’s rent at a health centre was also a “significant” cost.

The Citywide-operated Huntington Pharmacy, which runs from the Huntington GP clinic on York’s North Lane, will “shortly” move its operations into nearby Parkers Pharmacy located just over 200ft away, Mr Harrison said.

Read more: Yorkshire pharmacy chain rebrands after acquisition by hub-and-spoke company

Huntington Pharmacy is a 100-hour pharmacy, while Parkers Pharmacy is a 40-hour pharmacy that will extend its contract to 66 hours to be open until 8pm once the merger is complete, he added.

According to the company website, Citywide Health is “the largest group of independent pharmacies in the city of York”, with seven outlets in the city.

 

“Losing money”

 

Despite doing “10,000 items per month”, the 100-hour Huntington site was “losing money”,  Mr Harrison told C+D.

“Upward pressures on staff salaries” had made the pharmacy “no longer viable”, he said.

Read more: Weldricks forced to merge branches after GP landlord hikes rent by 25%

He added that having to rely on “more expensive and less effective” locums “only worsens the financial situation”.

Mr Harrison told C+D that the combined pharmacy would have reduced hours, which would allow for “a more secure future”.

Read more: GPs to appeal against pharmacy tenant’s decision to close over rent hike

He stressed that dispensers’ hours would not be reduced, but added that “the reduced need for pharmacists at one site only will help deal with the current recruitment crisis that we're facing locally”.

Citywide preferred to “invest and develop our own team” rather than rely on locums, he said.

 

“Significant rent”

 

Mr Harrison told C+D that moving pharmacies away from healthcare sites “isn't great for patients” but was a “necessary” measure, as "NHS Property Services (NHSPS)is deaf” to the community pharmacy sector’s “dire financial situation”.

He said that while the rent in the Huntington health centre - which is not managed by NHSPS - was not rising, the “opportunity to remove that significant rent as a cost will help our situation going forward”.

Read more: PDA: Pharmacies should merge to combat funding cuts

Another Citywide pharmacy in Haxby recently moved from an NHSPS-managed health centre “due to a rent demand of £40,000 per year”, he added.

Mr Harrison said that Citywide has installed a 24-hour “Medpoint” collection unit so that “patients won't be impacted by the changes”.

 

NHSPS rents "fair and transparent"

 

A spokesperson for NHSPS told C+D that all the rental valuations it undertakes “are in line with current market practice”.

 

“When valuing a co-located pharmacy unit, we use standard valuation methodology where rent is determined on a rate-per-patient basis,” they said.

 

NHSPS makes “adjustments for levels of prescribing and capture rates” and considers “the rollout of the electronic prescription service…to ensure that rent valuations are fair and transparent”, they added.

 

Read more: ‘A warning to landlords’: Six health centre pharmacy contracts terminated

 

The spokesperson said that the organisation is “happy to engage with our customers directly to explore options and assist with lease terms where there may be potential financial difficulties”.

 

“In this instance, [we] worked closely with Citywide to extend their lease at no additional cost, ensuring they were able to continue to deliver vital COVID vaccination clinics for almost a year,” they added.

 

Read more: Pharmacy rents: DH working with NHS landlords to ensure ‘fair’ approach

 

And they stressed that the organisation continues to “proactively engage” with its pharmacy customers including the Association of Independent Multiple Pharmacies (AIMP) and the National Pharmacy Association (NPA).

 

This engagement aims to “offer support [and] ensure communities can access pharmacy services and that value for the NHS continues to be obtained and protected”, they said.

 

 

Pharmacy market

 

It comes after C+D revealed in March that Weldricks Pharmacy has applied to merge two of its branches in the Rotherham area after rent increases by its GP landlord made premises unaffordable.

Last month, C+D revealed that the GP surgery planned to appeal the rent-related closure of a pharmacy on its premises because it will be “detrimental to the interests” of its patients.

Read more: PDA issues advice as Lloydspharmacy moves ahead with divestment process

Meanwhile, C+D reported this week that Lloydspharmacy has confirmed the locations of six of its branches in Sainsbury's supermarkets that are due to close, as well as closure dates.

And Rowlands Pharmacy yesterday (May 24) announced that it has bought 30 Lloydspharmacy branches across Scotland.

 

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