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76% of contractors in England saw their personal income drop in 2019

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Only 7% of contractors experienced a rise in their personal income
Only 7% of contractors experienced a rise in their personal income

Three quarters of pharmacy owners in England have seen their personal income drop over the past 12 months, the C+D Salary Survey 2019 has suggested.

Of the 46 contractors in England who responded to the survey – which ran between October 1 and November 14 – 76% saw their personal income decrease – a seven percentage point improvement on the 2018 figure of 83%.

Only 7% of contractors experienced a rise in their personal income, while 17% said it had remained unchanged over the past year.

The average income decrease reported by contractors in 2019 was 16%, C+D’s survey revealed.

Of those who experienced a decrease in their personal income, 46% saw it reduced by at least 21%.

Gareth Jones, head of corporate affairs at the National Pharmacy Association (NPA), said the findings “confirm the stark reality of the sector, that many independents are struggling to keep their heads above water, given that funding is not keeping pace with the escalating and turbulent costs of medicines”.

Two thirds, 66% of contractors who were dissatisfied with the personal income derived from their pharmacy primarily blame the government. This is a 13 percentage point drop on the 2018 figure of 79%.

Just over one third, 34%, hold the Pharmaceutical Services Negotiating Committee chiefly responsible, believing the organisation did not negotiate a favourable enough deal for the five-year funding contract.

The biggest threat to business

Eighty-seven per cent of respondents said “cuts to pharmacy funding in England” is the biggest threat to their business.

One contractor told C+D: “Proper funding and support is needed from the government, not just cuts. Limited imagination and [a lack of] commitment to common sense policy is hurting community pharmacy badly.”

Mr Jones said this is a “hugely testing time for most independent pharmacies”.

While welcoming the greater emphasis on community pharmacy as “the front door to health”, he added that “at this level of funding it’s likely that some of those doors are going to shut, permanently”.

Use C+D's infographic to learn more about how pharmacy contractors' businesses are being affected.

Eighty per cent of contractors have had to make personal financial adjustments in the past 12 months, with 30% cutting back on holidays, 22% taking out or extending a loan, and 9% forced to remortgage a property.

Twenty per cent of respondents said they had needed to make “other” personal financial adjustments.

One contractor commented: “I am now drawing on my savings, as the pharmacy isn’t giving a reasonable return on my investment. My financial adviser suggests I’d be better off selling the business.”

Another told C+D they had to employ an extra pharmacist to offer additional services, “but the income from these services does not cover the additional pharmacist’s wages”.

Calling on the government to do more for the sector, Mr Jones said it “should be prepared to direct more money into community pharmacy”.

He added that this could be necessary “to avoid uncontrolled closures or if it becomes clear that funding is insufficient to maintain new services, such as the community pharmacist consultation service and transfer of care”.

The C+D Salary Survey 2019 – the largest UK survey of community pharmacy, and the biggest in the survey's 12-year history – ran between October 1 and November 14 and was completed by a total of 2,556 pharmacists and pharmacy staff. C+D's ongoing coverage from the survey can be found on our dedicated hub.

The number of contractor respondents from Scotland, Wales and Northern Ireland was too small for C+D to conduct a similar analysis in these three countries.

11 Comments
Question: 
Have you seen your personal income drop in 2019?

R A, Community pharmacist

The gross margin of the pharmacy business has been shrinking for sometime due to Cat M. Most investors would say that for any business when margins are shrinking but costs are rising is not a good business to be vested in. 

I remember when I was thinking of buying pharmacy I couldn't shake my concern that the sector was out of fuel. After all in 2006 when the new contract was introduced the goverment had plenty of time to roll out the so called services they wished pharmacies to deliver. However in 2013 there was no sign of such commitment. As a result in 2015 I decided not to buy/run a pharmacy not worth your time or effort. 

Glad I made that call. 

Greatly Pedantic and Highly Clueless, Senior Management

I think the lack of clear leadership is the problem with the pharmacy profession and why NHS can keep squeezing margins. 

Benie I, Locum pharmacist

smoke and mirrors. Owners left right and centre are selling up for six and seven figure sums. Remenber there are different accounts often for HMRC and sales agents.

s8chy P, Pharmacy owner/ Proprietor

Beggars belief how dumb some pharmacists are on here. The owner selling up for 6/7 figures paid 6/7 figures to buy the business in the first place. By the way, they had to put down their life savings and take out a massive bank loan which was secured against their home. Then, for first 3/4 years worked for virtually no income as the interest on the loan was huge. Did I forget to mention working 80hours per week to keep the business going.
Any of you pharmacists up for that? What I see of this new generation pharmacist, 95% couldn't do it.

Benie I, Locum pharmacist

Calm Down.

s8chy P, Pharmacy owner/ Proprietor

I'm a contractor. Over the last 10yrs, I pay myself around £60-70k annual. However, recently, I have had to fund my business account to pay wholesalers, that means for those months, I can take no wages at all and actually lost money. Is that eye watering enough DeeDee ?

Dee dee, Community pharmacist

Of course they will report an income drop. That's the MO of community pharmacy contractors, to constantly plead poverty. They were doing this even when times were good. 

Second, why aren't actual figures reported? Pharmacists average salary was revealed, along with dispensers, why not contractors? We all really know why. They'd be eye watering. 

 

Dave Downham, Manager

Actual figures aren't reported because they are indefinable, incomparable and meaningless in isolation.

Alexander The Great, Community pharmacist

Most will draw dividends, not salary. So hard to tell.

Thomas Wilde, Community pharmacist

I'd be interested to know what the average salary is for the contractors. We see the info for all the other roles I'm curious why we never see it for this one.

Benie I, Locum pharmacist

Could contradict the argument so you'll never see this.

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