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‘Battle-worn’ owners have no resources left to cope with contract

Contractor Ian Strachan said details behind new services in the contract are missing
Contractor Ian Strachan said details behind new services in the contract are missing

“Battle-worn” pharmacy owners have no remaining reserves to sustain them in the face of five years of frozen funding, an NPA board member has told C+D.

Speaking in his capacity as a pharmacy owner, Ian Strachan said his fellow contractors would struggle to make further efficiencies in the wake of last week’s news that funding will be frozen at its reduced rate for the next five years.

“They are eating into their reserves, they have realigned their business models, they have adjusted their cost basis – there isn’t more they could [do].

“The sector has already gone through two years of hardship, depleted reserves and cashflow challenges and instability,” added Mr Strachan, who owns the four-strong Strachan’s Chemist chain in Lancashire and Cheshire.

“They are all fatigued and battle worn,” he warned. “To endure potentially more attrition is going to be very impactful.”

Establishment payments – which will be phased out by next April – had been the financial “bedrock” of pharmacies, Mr Strachan pointed out.

“Those overheads that are inevitable in keeping the doors of a pharmacy open have been supported by establishment payments,” he added. “There isn’t a second round of resources that [contractors] can tap into.”

Details needed about service-focused future

While Mr Strachan agreed the service-focused funding model set out in the contract is “the way to go”, he pointed out that the details of many of the services that will replace funding lost by medicines use reviews and establishment payments are still missing.

“How can you align to a contract when you don’t know the details behind those services?,” he asked.

“People would welcome a move towards a more service-driven model, but that has to be in the specifics,” Mr Strachan said. “From what I’m seeing, that’s just not there right now.”

Read C+D’s breakdown of the funding contract, and read C+D’s analysis of how National Pharmacy Association (NPA) members are struggling financially

6 Comments
Question: 
Do you agree with Mr Strachan's thoughts on the contract?

Richard MacLeavy, Non Pharmacist Branch Manager

I honestly think the PSNC have had the wool pulled over them. The DOH wanted to reduce the funding, to which the PSNC have fought tooth and nail to avoid. Yet in doing so they have agreed to loose MUR's and establishment payments to build a fund for other services which haven't been decided yet. I can't see the DOH phoning up PSNC any time soon to propose a new service, any proposal will come from PSNC and the DOH response will be "we don't need that service" or "ok we will discuss this as part of future negotiations in 5 years time". My moneys on no new services will develop and the DOH will have a budget surplus equal to amount they originally wanted to cut from the pharmacy budget.

paul mccourt, Superintendent Pharmacist

If anyone really believes “jam tomorrow”, better also work under the assumption that “tomorrow never comes”.

Reeyah H, Community pharmacist

Everyone has given up. Every contractor I have spoken to is fed up to the back teeth. RIP independents. They are the backbone of communities and now the DHSC has made sure they go. They will regret this decision in decades to come when health outcomes are a disaster. 

A.S. Singh, Community pharmacist

Very good point regarding tax- wheres the french model now?  It would take a brave contractor to setup a paid local meeting for all community pharmacies (apart from multiples or small multiples) to get together and simply have a set of ground rules to stop this policy bullying. Compete, try and nick a patient or two-nothing changes-but have backbone. This should be what the LPCs should be doing. People may have to prepare to lose short term business for long term gains. Saying this- most people with large loans wouldnt agree

N O, Pharmaceutical Adviser

“How can you align to a contract when you don’t know the details behind those services?,”

Absolutely spot on.

This situation is more or like telling new parents to buy all the clothes and accessories for their unborn child without revealing the gender. 

Ranjeev Patel, Non Pharmacist Branch Manager

I would have thought that the government would support the independents, seeing as they are almost always likely to be UK-based and pay proper taxes, unlike the multinational conglomerates who would base themselves anywhere in the world to avoid paying an extra few quid of taxes. These companies are like parasites, they come in and take the money then siphon it off somewhere abroad leaving the country worse off. It just seems so odd that the pharmacy organisations and the government have no objections to these kinds of behaviours. Just remember that everything which has happened recently and will happen in UK pharmacy is about money, it's all about who's getting paid what. The pharmacists are doing the work and getting paid buttons and are the ones under the most pressure right now, but they don't speak up or complain so that's their problem, isn't it?

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