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The pharmacies that lost £80k on increased medicines prices in a month

Cooper Chemists driver Shaul Williams outside one of the company branches

The owner of a small pharmacy group estimates his business paid up to £80,000 in extra costs due to excessive medicines prices in April

As the UK moves into the next phase of the COVID-19 pandemic, in community pharmacies the demand for prescriptions has settled and footfall is starting to increase again. But there are still challenges ahead. Will pharmacies have recovered financially to be able to afford to repay advance funding, whenever this may be?

The government allocated £370 million in advance funding to pharmacies to aid with their cashflow problems caused by the virus outbreak. But Jonathan Cooper, who owns the Coopers Chemists group – which has five branches in North Yorkshire – is “very concerned” that pharmacies are expected to pay back this funding.

Mr Cooper hopes the Pharmaceutical Services Negotiating Committee (PSNC) will backdate payments for generic medicines that cost more than was specified in the drug tariff. “We don’t feel that we should be paying that [advance funding] back – the drug prices have gone up, but we also haven’t been able to get funds in from any services we offer.”

In the short-term, the relief of the advance funding was a “lifesaver” that prevented Mr Cooper from having to ask the bank for a loan, but pressures on his finances have not disappeared.

“The most concerning challenge [of the pandemic] has been financial, with the rapid increase in the price of generics in March and April,” Mr Cooper says.

“In April alone, we estimated that within our group it had cost us somewhere between £60,000 and £80,000 in extra costs for buying drugs.” He calculated this through comparing the prices for prescriptions that month with the figures from a year before. “The price per prescription was around £1 per item more, basically down to the generics.”

“We’ve got a list of about 60 generics that are over [their drug tariff price] and over concession price,” he says. 

Medicine shortages were also “massively exacerbated” by the pandemic, Mr Cooper adds. Contacting surgeries to request alternative treatments has been “very difficult and time consuming”, he says.

90% less counter trade

Coopers Chemists had to pause its service provision during lockdown, cutting its revenue from services. “We did no medicine use reviews in April, May or June, no new medicines services, so we’ve lost all of our services income,” he says

This issue was coupled with the loss of “a very healthy counter trade”, which sank by around 90% during the crisis and only began recovering in June, Mr Cooper says.

The money problems of the business were compounded further by rocketing demand for prescriptions – up by approximately 25% in April – and home deliveries.

“Across the group, about 30% of our patients had their medicines delivered [before the pandemic]. That increased to over 60% – we delivered to virtually everybody over 70,” Mr Cooper says.

By the time the pharmacy medicines delivery service was introduced in April – paying pharmacies monthly for delivering to shielded patients – Mr Cooper had already organised his own volunteers.

The group now only offers to deliver to patients that the group delivered to before COVID-19 and anybody who is shielding. Its volume of deliveries has partially subsided, but the demand is still far higher than it was before the pandemic.

Many of the volunteers are heading back to their regular jobs, but Mr Cooper has employed one as a driver “because we didn’t feel that we should be getting paid and not pay the people who were delivering”, he says.

Another challenge going forward is adjusting to a new way of working in the dispensary. Many of the surgeries near Coopers Chemists branches have now switched to electronic repeat dispensing, meaning that patients are calling pharmacies to ask when they can collect their medicines.

“We’re constantly on the phone trying to do the job that the doctors were doing before,” Mr Cooper says. 

“Pharmacies have risen to the occasion”

Coopers Chemists has weathered huge pressures this year but none of its five branches have had to close. However, two pharmacies in the area were not as fortunate.

Ian Dean, CEO of North Yorkshire local pharmaceutical committee (LPC), says two pharmacies that were part of the same multiple closed at the end of August. One of them was in the centre of York and had insufficient footfall during lockdown to remain viable, Mr Dean says.

One of the greatest challenge for branches in his region will be flu vaccinations because of the “big differences” in delivering them this year.

PSNC announced in September that pharmacy contractors in England will be paid a “combined value” of £10.08 per vaccination during the 2020-21 flu season only.

Mr Dean says he would like the cost of personal protective equipment (PPE) required to operate flu vaccinations to be covered by NHS England. Masks alone are costing Coopers Chemists around £500 a month.

Improved relationships

Mr Dean says that the situation for pharmacies is “certainly a lot calmer” now, while access to PPE has been variable but is improving and COVID-19 testing sites are available nearby.

“Of the good things to come out of this is the relationships between pharmacies and the NHS England area team have improved and we’re having more contact,” he says.

“Relationships between the local medical committee and the LPC are much better too – they weren’t bad before, but we’re meeting weekly now instead of quarterly.”

Looking back at the “mass panic” of patients in the first months of the pandemic, Mr Dean says: “community pharmacies really rose to the occasion”.

2 Comments
Question: 
How has your pharmacy been affected by COVID-19?

Uma Patel, Community pharmacist

The person to blame is the Chief Pharmaceutical Officer Keith Ridge who has never backed community pharmacy. Fortunately he is retiring soon with his gold plated pension

sunil maini, Community pharmacist

Mr Cooper,

Thank you for taking the time to quantify what covid has cost your business.Whilst all were furlowed we carried on.All pharmacies will have suffered the same,obviously on a pro rata basis.However Mr Sunak does not care.I will march to Parliament with you if needed,ala the Jarrow Marches.Months and months of being told by PSNC they are "negotiating with HMG" but still nothing! Taking the mickey.Wish I couldc have used stronger words.

 

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