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APPG: Government expects up to 3,000 pharmacies to close

APPG: Mr Burt wants pharmacists to stop relying on dispensing income

Pharmacy minister Alistair Burt estimates 1,000-3,000 pharmacies will close because of funding cuts in England, according to the all-party pharmacy group

*This article was first published as breaking news on January 22*

The government is braced for more than a quarter of pharmacies in England to close as a result of the 6% cut to the global sum, the all-party pharmacy group (APPG) has said.

Pharmacy minister Alistair Burt estimates that between 1,000 and 3,000 pharmacies will close because of the funding cut, according to an APPG report of a meeting with the minister published today (January 22).

Mr Burt used a meeting last week (January 13) to stress that pharmacies need to become less reliant on dispensing income, the APPG said. The minister told the APPG that those that rely heaviest on this income will feel the greatest financial "squeeze", it said.

Mr Burt is determined that the 6% cut to pharmacy funding will go ahead in October and "protesting will not change this", according to the APPG.

Department of Health (DH) head of pharmacy Jeannette Howe, who also attended the meeting, confirmed that the government plans further cuts to pharmacy funding in future years, the APPG said.

Ms Howe said the government will consider a "phased" approach to decreasing pharmacy funding, according to the APPG.

Which pharmacies will close?

Mr Burt told the APPG that the government will not decide which pharmacies would close, the group said. Instead, Mr Burt said contractors will need to decide whether they are viable in light of the £170 million drop in the global sum, according to the group.

He said multiples will be better placed to cope with the cuts, so the government will look into ways of helping smaller pharmacies survive, as well as those wishing to "retire", the APPG said.

Ms Howe said the government could not be sure about the precise number of pharmacy closures, because it does not have access to the "accounts of individual pharmacies", the APPG added.

C+D has drafted a template letter for readers to raise awareness of the impact of the cuts with their MP.
 

More news on the funding cuts...

PSNC warns of 'far larger' funding cuts to come

Funding cuts equivalent to 12% 'net' loss over 6 months

Government to slash pharmacy funding by 6%

 



Is your pharmacy in danger of closing because of the cuts?

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66 Comments

P M, Community pharmacist

of course the banks, just raise the deposit ,eg 500,000 goodwill , so  20 % deposit + stock + professional fees etc 

refinance the house get some equity out people have been doing it for years just like in buy to let but put the money towards a business and try and secure your future

people without a house or with no equity shouldnt be looking to buy a business but should be saving hard doing overtime get another job etc  

this is nothing new the older generations used have to do it so why not the new generation

peace out

 

 

Folajimi Awofisoye, Locum pharmacist

I think the Community Pharmacy is dead

. We probably should start entertaining the notion of the Hub and Spoke dispensing, if all pharmacies close, others would need to get more efficient as there is even more Rx to dispense.

We might need to stop some services like, Blister packs, Free delivery and other unprofitable stuff.

Concentrating on what we get the best pay for  MURs, NMS , Flu jabs, Malaria, and let a hub do the rest.

Barry Shooter, Academic pharmacist

Many of your contributors seem quite bitter but not particularly about the proposed cuts. I am a retired contractor now but independents will survive because they know how to adapt to new circumstances as we have had to do it throughout our business careers. 

The multiples are not flexible and any non-viable branches will be offered for sale to the many pharmacists who want to become proprietors. Of course it's not very nice and the prospect of a new model of community pharmacy with repeat prescriptions being dispensed centrally with local pharmacies giving service to their probably registered patients on these repeats and on locally dispensed new and acute medicines will present new challenges. What an exciting time ahead with pharmacists at last using their skills and knowledge to the best advantage to their patients. 

 

 

 

 

 

 

 

 

 

Chemical Mistry, Information Technology

The worse type of ex contractor view made his money and now preaching to pharmacist when sitting on his pile of money,Has a right to his view but we are in this place due to like of his ilk where does he think young pharmacists are going to get the money banks I don't think so,money of mum and dad, I don't think so and already saddled with loans.

It right what they say no fool like a ex pharmacy contractor.

 

 

P M, Community pharmacist

you will still need deep pockets to buy , goodwill prices wont fall just as it seems house prices dont seem to fall -  supply and demand even if 50 shops come on to the market over the next 2 or 3 years there is still 500 people chasing them including small groups as well as individual pharmacists with cash/equity or parents willing to help. 

 

 

Marc Borson, Community pharmacist

 

Here are the estimated closures based on a snap shot of one recent months dispensing data. Of course this does not take in to account new opening and disposals, but gives you a good idea of the future landscape. Near enough 1000 are owned as part of a chain. If this lot dispensed circa 7.7 million items. If they were shared across the remaining landscape each pharmacy could see an uplift of circa 870 ipm based on current numbers.

Total closures based on sub 4000ipm = 2887

potential closures by brand.

Asda = 99

Boots=  400

Well= 37

Lloyds and Sainsbury=  251

Cohens = 28

Manor = 21

Whiteworth= 8

Day Lewis= 44

Jhoots = 25

ABC= 5

Weldricks= 8

Please stop recommending pharmacy as a career to new prospects.

Marc Borson, Community pharmacist

It looks like they have set the bar at 4000 items per month. They will want to shed these stores. The remaining property will be allowed to remain on much lower profitablity.

Sami Khaderia, Non healthcare professional

Brilliant comment by my learned friend..........survival of the fittest.!!!

Bobur Ahad, Community pharmacist

Does anyone can say,  whats going to happens to pharmacist,  if 3000 pharmacies are closed?

Chemical Mistry, Information Technology

It will be classed as natural wastage by the powers that be, with the added incentive of practice pharmacists as sop the pharmacy world which is just smoke and mirrors from the government in that provide some funding now for the gp's to employ the pharmacists and then take the funding away after a year then the gp's will not employ any if no funding provided.

Because if practice pharmacist are such a great idea why were gp's not fighting to employ them previously only since funding provided as their been a clamour to employ them so when funding disappears it will revert back to status quo.

Shaun Steren, Pharmaceutical Adviser

Low Item Independent (LII) = Closure within a few years. Low Item Multiple (LIM) = Many survive via short-term cross subsidisation and vertical integration and then become independently viable post acquisition of LII items and LIM items (limited numbers will close with multiples doing their best to make sure another of their branches acquires those items). Medium to High Item Independent (MHII) = Survive + acquisition of LII and LIM items. Medium to High Item Multiple (MHIM) = Survive + acquisition of LII and LIM items. Acquired items are zero operational cost as pharmacists and their staff absorb the new workload with no increase in staff hours (possible cuts) and with reduced wages.  The increase in numbers of items per pharmacy and the reduced dispensing cost per time more than cover any cut in payment per item by the government. The closure of LII and LIM result in many hundreds of pharmacists losing their job, further adding to an already oversupplied market - post mass immigration/pharmacy school expansion. Many pharmacists will never find employment in community pharmacy such will be the scale of the oversupply. Those who find work will face reduced wages, knowing if they leave that job they will struggle to find another and will have to reapply for a lower wage then they previously had. Overall all employee pharmacists do very badly through unemployment, reduced wages and increased workload. A significant number of independent pharmacist owners lose their business. Medium to high item Independents survive if they absorb the acquired workload, buy very well and maximise services (i.e. do a legal but useless tick box event on every NMS and MUR). Multiples as a net calculation benefit significantly through the concentration of items throughout their estates and reduced wages. The government gets to cut spending. The public doesn't care what happens in community pharmacy as long as they have to pay less (or not at all), walk very short distances (or get a delivery), get instantaneous service and only have to take the minimal amount of responsibility for anything to do with their medicines. 

 

 

 

 

 

 

London Locum, Locum pharmacist

A very plausible account you have given. Thank you. Now why would I strike / campaign for these organisations many of which impose terrible pay and conditions, Silly hours with no breaks( some multiples even frown at going to the toilet. Even performing animals in a circus or zoo get rest breaks. There is no demonstrable benefit to me in downloading this silly letter to send to an MP who isn't even bothered anyway. Or is the benefit seen as bieng one the lucky few locum/employees to man the surviving pharmacies that are transformed into sweatshops for less or same pay. you'd be better served saving your energy for exploring pastures new.

This is evolution. Some will make it and others won't. 

Chris Pharmacist, Community pharmacist

Lots of hysteria on here, the way I see it is that a number of 100 hour pharmacies will now close and frankly some of them aren't needed or viable, hence the hysteria from the panicking 100 hour contractors on here. Government legislation allowed too many to start up and now the rug is being pulled from under their feet...the multiples aren't exempt either, ths supermarkets won't hesitate in closing them where necessary....the oversupply of pharmacists situation is about to get a whole lot worse.

Chris Locum, Locum pharmacist

The over supply will get worse even if the number of premises remains static. Pharmacies won't close quickly off this one cut but subsequent rounds of remuneration which will inevitably come.  Cost cutting will be used to hold on - the human element. Staff and pharmacists. Supermarket pharmacies have been loss leading in many cases and not able to survive as independent entities. The fast food culture will be endemic and pharmacists scared or stupid enough to operate in this environment will run a risk of civil or professional sanction before the end of their 'career' This is a red line which if crossed without any unified response will eventually result in many unemployed 

Ebers Papyrus, Pharmaceutical Adviser

Can you smell that? The putrid stench of a dying pharmacy profession. Hang on I can smell something else, the herbaceous odour of whatever Messrs Burt, Ridge and Cavendish are smoking.

The ignorance of this direction from NHS England has and will continue to rapidly mobilise pharmacy. Nearly 2 million people use a pharmacy everyday, pharmacy is the focal point for many communities. Community pharmacy manages prescriptions at increasing volumes, safely and efficiently without fuss. Reducing funding will as the survey highlighted reduce staffing levels within the dispensaries. Meanwhile workload increases, services are neglected and patients are put at risk of dispensing errors. 

If NHS England want to reduce pharmacy numbers then there are more rational ways of approaching it, than driving them into the ground and putting patients at risk. Locums and pharmacy staff are paid a pittance for working within onerous challenging environments, where they are regulated and scrutinised.

The blatant naivety of the open letter from NHS England poses a significant threat to the future of community pharmacy in England. Pharmacy as a profession deserves more than this constant kick in the proverbials. 

 

Sachin Badiani, Pharmacy owner/ Proprietor

You have said what I have been thinking very succintly. Spot on.

London Locum (whilst not agreeing with him on other things) is also spot on. Pharmacy is being driven to the ground. I will disagree with you London Locum, on not treating locums fairly. We have treated our locums I think much better and do TRY and empower them to carry out services (and getting our other staff members to carry out services within their remit). We certainly are not trying to run our staff/locums to the ground that I will assure you!

I am getting tired of reading the constant bashing between contractors/locums etc. If I could request, pharmacy contractors like myself will campaign to keep our pharmacies open. London Locum, if you want to make a difference, why don't you campaign for better rights for locums?

You have made the right decision to not lay all your eggs in one basket. That is the best strategy.

London Locum, Locum pharmacist

You empower them to do services !! I'm sure you do because YOU get paid for it or do you give them a small cut or incentivise them? Not all contractors are bad of course but in my time I've come across a significant minority that systematically defraud the NHS and have little or no care for their staff never mind locums. And for them I have no sympathy so let the axe swing and let's see where everybody ends up. Think of it as evolution. 

London Locum, Locum pharmacist

You empower them to do services !! I'm sure you do because YOU get paid for it or do you give them a small cut or incentivise them? Not all contractors are bad of course but in my time I've come across a significant minority that systematically defraud the NHS and have little or no care for their staff never mind locums. And for them I have no sympathy so let the axe swing and let's see where everybody ends up. Think of it as evolution. 

Shaun Steren, Pharmaceutical Adviser

I will repeat a previous post on the basis that some people don't seem to understand that the 'cuts' are about to make some people better off - IT IS ZERO SUM FOR GODS SAKE: There are three things: payment per unit, cost to deliver each unit and total number of units. The government is going to reduce payment per unit - that is a fact that will not change. The government in return will help reduce cost per unit by engineering a massive oversupply of pharmacists thereby reducing wages - the main cost of delivering a unit. The government will then maintain control of entry, which with ever increasing prescription numbers, will ensure each pharmacy gets more units. Indeed, the government has agreed to support a concentration of units to a fewer number of shops by making low items pharmacies loss making (by reducing payment per unit and so making their scale uneconomic). These extra units will be zero cost to deliver - pharmacists and their staff will absorb the new workload, knowing to refuse will mean to be replaced by a queue of workers ready to take their place. So the future is a reduced payment per unit, but with a consistent annual growth in total units and fewer pharmacies sharing these units (increase in total units per pharmacy) and with a significantly reduced cost per unit (reduction in cost per unit through a simultaneous cut in wages and increase in workload). This shafting of employee pharmacists and their staff will maintain the ten percent returns for the chains and will be spun as a bright clinical future. Employee pharmacists know it will actually mean checking items at an unsafe rate, a reduction in (or the absence of) the supervision of counter sales, making all services tick-box speed events and treatment of patients not as humans who need individual attention but as units who need to be processed. Any defiance of the 'new paradigm' will have you discredited, via a performance management process, as a pharmacist who is not clinically focussed and who doesn't want to 'add value'.

 

London Locum, Locum pharmacist

You're right Shaun. If some people are losing always stands to reason that someone else will be winning. Just like the credit crunch a few years back, whilst some lose thir home others pick cheap bargains to add to the portfolio and become even richer. Of course the winners are always in a very small minority and the rest can whistle in the wind.

Sue Per, Locum pharmacist

Spot on, but i believe supervision of sales dissapeared years a go. These days it is sell, sell, sell, for pure profit before patient interest, in breach of Professional rules. As for dispensig it is impossible to do a proper clinical, legal and dispensing check, with the voulme of dispensing done in a robotic manner.  Pharmacy is nothing more than a supply superstore.

John Randell, Non Pharmacist Branch Manager

1000-3000 pharmacises will close....well mr pharmacy minister do something about it...i thought the idea of a minster is to protect what ever department he/she leads not to  say OH WELL where screwed.........healthcare will suffer significantly...how much free advise and medical interventions do pharmacists do FOR FREE....answer is ALOT. this includes dealing with hypochodriacs and general nonsense questions from the public.

London Locum, Locum pharmacist

All that free stuff has been part of the problem. Now those chickens have come home to roost.

Chris Locum, Locum pharmacist

Yes the free stuff has come at expense of static or falling pay and conditions for staff and pharmacists. It won't stop on both counts.

Ben Merriman, Community pharmacist

To a point, I disagree; it's not solely that fact that we do lots for free (which must make any cuts easier to justify), it's the fact that there is very limited hard evidence of any benefit of these services.  Whilst GPs have been hammering QoF, we've done nothing to show what we does makes a difference.  As well as the money paid for MUR/NMS, it's the data that these services generate that is of value to pharmacy.  If we could, for example, say that for every 50 Ventolin inhalers we've dispensed, we found that 20 were being used incorrectly.  Post pharmacy intervention, I'm sure there'd be a way of translating 20 improved inhaler techniques into subsequent GP appointments or even A&E admissions.  This is the kind of information we need to stop Amazonisation of pharmacy, to show that we do make a difference to patients' health, to ensure that pharmacies are located on high streets, in health centres and in residential areas to actually allow us to make these differences.

James Spiral, Community pharmacist

So they have finally admitted it, bigger cuts will keep being inflicted until 3000 pharmacies close and the rest are scratching a living.

Come on powers that be, stop mumbling into your coffee cups,' oh this is bad' whilst checking your generous pension benefits for the 10th time that day.

This is now your time to inspire, plan, lead.

Open warfare has now been declared, time to organise your troops.

Where are the 10,000 white coated pharmacists angrily waving their spatula's in the air as they descend on downing street.

Oh sorry, you sent a strongly worded letter, that must have put the government into a panic!

Dave Downham, Manager

What is deafening is the silence from the big boys. It's all well and good us all making our feelings known here, but where do Boots and Lloyds stand? I'm sure we have an idea. Even rent-a-quote Kirit has more to say on SCR than the new contract. Do they know something we don't?

Mr Pharmacist!, Pharmaceutical Adviser

This whole idea was born in 2012.  It's taken this long for the DoH to implement.  Fact is this step change is not only required to guarantee our existance for the next few decades, but to ensure we seen by our paymasters to share the goal of operational efficiency.

There will need to be signifant investment in infrastructure and costs of re-positioning business which may involve the creation of independent pharmacy local co-operatives.  The latter would ofset scale issues and allow the adoption of automated dispensing thus allowing efficienices to be gained.

At the point of maxiumum pain, each pharmacy could lose up to £85,000 per year but this is transformative and new revenue streams (local deployment of intergrated care models, innovation in service deliver etc), enhanced efficiencies of dispensing etc should offset this loss by the 4-5th year and allow profits to be maintained as per pre-cuts.

The big guys will have the advantage of easy mobilisation in terms of step change and financial power to make that change requiring CAPEX.  However, the smaller independents and multiples (i.e Groups below 300 pharmacies including retail/supermaret led operators) will need to club together to share that cost and allow similar scale as that of multiples to thus enjoy the monetory benefits of automation.  In addition, independents will far offset the disadvantage of immediate scale, by being able to create new revnue streams by working with local healthcare providers in delivering local integrated care models, wherethe bigger groups will face the disadvantage (Local is better than National Strategy in the new healthcare landscape).  

For what its worth, rather than crying and burying the head in the sand, lets start looking at how we can, as a group, look to face up to the changes being demanded and rise to the challenge.   

John Alan James Robinson, Superintendent Pharmacist

I wonder , Are you a member of PSNC ?? I think I heard this back in 2012

N O, Pharmaceutical Adviser

What is more surprising, is, that, They don't know whom to close!! The same DuH made lot of promises and statements. Why small pharmacies?? Answer is clear in the article, however we try, we can't force the big cats out. So, take it or leave it we will close you!!!

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