Layer 1

Pharmacy closes for good after failing to negotiate NHS rent reduction

© 2020 Google, image capture: July 2016

Colne Health Centre Pharmacy in Lancashire, which is part-owned by Rowlands, will close on August 28, after discussions with the NHS failed to result in a rent reduction.

The pharmacy, which is jointly operated by Rowlands and Leedam’s Pharmacy, cited “rising costs and insufficient funding” as reasons for its closure after 38 years in business.

Matthew Leedham, one of Colne Health Centre Pharmacy’s directors, said yesterday (August 25) that the pharmacy has been “loss-making for some time and there were no indications it could become profitable”.

“We had hoped for a rent reduction from our landlord – the NHS – but that was not forthcoming,” he added.

The pharmacy had been “in discussions for some time” with the NHS, but this did not result in a rent reduction. This reiterates that the government must “address the anomaly that GP practices can get their rent reimbursed by the NHS, but community pharmacies cannot – even when the NHS acts as landlord”, the pharmacy said.

An NHS Property Services (NHSPS) spokesperson said the organisation had been in contact with the pharmacy about its rental charges since February. The lease was agreed between the NHSPS and Colne Health Centre Pharmacy in 2014, with the price of rent reflective of the site’s market value, it said.

During a call with the pharmacy’s representatives in May, the NHSPS said it “was not in a position” to reduce the rent, although it pointed to “additional system support on a local basis” that the business could apply for, the spokesperson said. “We have not heard from the pharmacy since then,” they claimed.

“NHSPS has a clear remit of generating as much income as possible from its estate in order to reinvest this money back into the national NHS budget,” the spokesperson added. “Ensuring our portfolio generates a return helps us to deliver a modern and sustainable health estate that helps to enable excellent patient care.”

Rowlands: Funding needed immediately to stop closures

Mark Bather, managing director of Rowlands, said that “NHS rental charges shouldn’t be hampering pharmacies’ ability to offer customers essential access to healthcare”.

“Pharmacy has proven itself to be an invaluable resource on the frontline of healthcare during the COVID-19 pandemic,” he added.

There is an “immediate need for fair and sustainable funding which takes account of the increasing rent, rates and wage costs which pharmacies are facing”, Mr Bather said.

“Insufficient funding in England combined with rising costs will only lead to more pharmacy closures,” he added.

As the “lifeblood of communities”, pharmacies deserve recognition and it is “inevitable” that will be further closures “if significant change isn’t brought into force soon”, Mr Bather said.

24 Comments
Question: 
Have you asked the NHS for a rent reduction?

C A, Community pharmacist

"price of rent reflective of the site’s market valueprice of rent reflective of the site’s market value"
Everybody else gets the irony that the market value is now zero right?

It's just the NHS Property Services spokesperson that's missing it right?

A.S. Singh, Community pharmacist

The health centre they are in churns out 22K items, they must be doing something wrong

Mr CAUSTIC, Community pharmacist

with electronic prescriptions they can be sent anywhere . the only people going to the health centre pharmacy will be those visiting the gp or nurse . if however the in house pharmacy delivers then they will retain more patients and scripts. However delivering costs cut into ones meagre profits .

the pharmacies that leapfrogged years ago can now find that it isnt an advantage today .

C A, Community pharmacist

The health centre did 26k items in March, mainly due to Covid I suspect.

Mark Ashmore, Superintendent Pharmacist

Whether it makes a loss or not  surely depends on the rent and rates being charged

Interleukin -2, Community pharmacist

...the hipocrisy of it all. Jump into a healthcentre cos there's loads of scripts and  great location says greed.....then ask for lower rents when it bites...oh how classic. The big chain will survive am sure

Mark Ashmore, Superintendent Pharmacist

You might try for a rent reduction but you're unlikely to close a pharmacy that is at least covering its costs.

Mr CAUSTIC, Community pharmacist

interleukin i was too polite to make that observation . i looked at the situation of the pharmacies in the town and did work out what originally happened . There is a company investing in health centres that thinks putting pharmacies in their properties is a good idea. They have the idea pharmacies can afford their rents regardless. GP get their rents reimbursed but we have to make a profit to pay them The script figures for the pharmacies involved in the area are interesting but i refrained from publishing them ..

 

R A, Community pharmacist

I wish to make a sombre statement but I think the UK is litreally becoming a third world country. This trend set from 2008 and frankly speaking we never really recovered, just look at UK GDP figure it was at its peak in 2007. 

The final nail in this coffin is Brexit + COVID-19. I expect wide spread closure next year.

Mr CAUSTIC, Community pharmacist

if you look at the dispensing figures in the area , nothing is private any more, the healthcentre does figures just below the sum of the 2 partners . Boots does less than either partner and the other does better than either partner .  my bet is that boots and other will pick up the scripts when people go to the surgery and want their script immediately but the electronic scripts will be distributed according to where the people  live . will be interesting to look at the figures again in 4 months to see the % gain in each pharmacy . the unknown factor is what mail order pharmacies will pick up .

if you want the figures they are all in the public domain .

C A, Community pharmacist

The main pharmacies in the area are - 

Colne Hc Pharmacy 
Evercare Pharmacy 
Rowlands Pharmacy
Boots Pharmacy
Leedams Pharmacy

Gerry Diamond, Primary care pharmacist

It is regretable any pharmacy business has to close, as it is loss of jobs and services to the local community mostly in low income communities which have limited services and poor health outcomes.

Chris Locum, Locum pharmacist

Trends set in motion tend to keep that way until something else stops it. IF the advances made this year are not to be repaid, the trajectory community pharmacy is now on will continue anyway. You can't bring back a liquidated business.

Just in case anyone missed this old article I will post a shortened link which shows politicians at their duplicitous best. The exact future is not so easily predicted, but it is clear in principle what HM government would like.

https://tinyurl.com/sweethearthealthdeal

 

C A, Community pharmacist

They might just buy P2U - since it's script figures have finally taken off they might actually become profitable. They are turning over about 1 million items a month now.

Mr CAUSTIC, Community pharmacist

Do not forget the government stated they expected 2000 to close and they are nowhere near this target yet ! They do not reimburse our increased drug costs and so we are losing on many items we dispense .  They took away most broken bulk claims so when we dispense a part pack when it goes out of date we lose there as well . 

We are just a bunch of losers all round .

( dont forget loses on part packs of dressings as well ) 

Is it a surprise that PSNC has not agreed the fees yet for the flu service . Perhaps PSNC senior staff should be paid on results . The level of the increase being voted on by us .!

Freelance Chemist, Pre-reg Pharmacist

Why should The owl been given money off their rent. They are a multimillion pound company. They need to stop acting as a poor tramp!  Good on the NHS for not being bullied by the owl!! 

Dodo pharmacist, Community pharmacist

With increasing costs and flat funding, there will be large numbers of pharmacy closures. I know many have been saying this for ages, but it is now imminent. Just this month two pharmacies in Sheffield have announced they are closing permanently. One does 15,000 items a month and the other 17,000 items per month. That is a frightening statistic for most English pharmacies whose average items dispensed per month is 7,500. Any pharmacy who has higher than average overheads will be forced to close. This may include pharmacies in health centres, who pay huge rents and service charges, or 100 hour pharmacies. They will be the first to go, followed closely by many others. 

 

sunil maini, Community pharmacist

100 hour pharmacies who have got a contract by agreeing to pay huge rents have distorted the rents for all.they should be thankful that they have got a a contract that was never needed,and be grateful for the income they have taken from the nhs.How many scripts have been dispensed between 1am-6am? I would love to know.and no.I do not feel sorry for them now,if they are struggling with rents.

sunil maini, Community pharmacist

For those who took advantage of the warped concept of 100 hour pharmacies,paying ridiculous rents since they did not have to purchase an existing business,the pidgoens have come back to roost.Do I feel sorry for them?The legislation was introduced as a result of pressure on HMG from supermarkets-now supermarket pharmacies are just used as a loss leader,Half an hour for a script whilst no-one else waiting?The line these pharmacies are told to say to patients,so they will shop in store whilst waiting-totally immoral,and just paints the profession as incompetent for taking to long to dispense even only one item.We all know it is the case. Time for the NHS to look at value for money

fab fabioso, Locum pharmacist

See your point about Supermarket pharmacies and 100hr pharmacies flooding the market but without them the job situation for community pharmacists would have been ( and still be ) even worse, which says something considering how much wage rates and working conditions have declined since the mid 2000s.  

locum norfolk, Locum pharmacist

This is a serious point that many have missed, well made. These pharmacies have done a vital job at absorbing the oversupply... and when they close, there will be further pressure on wages due to the oversupply... we are unfortunately in a lose lose position. If you can afford it, retrain.

C A, Community pharmacist

It cuts both ways - the size of the pie was fixed, thus dividing it between more people meant smaller pieces for everyone, more locations meant more overheads, which meant that businesses looking to maximise their profit looked at other ways of saving costs - one of which was reducing personnel spend

sunil maini, Community pharmacist

I appreciate what you have said.However the nhs remit is not to ensure that pharmacists can earn a living.Really don not think this is a convincing argument.

Mr CAUSTIC, Community pharmacist

if one looks at the map showing pharmacies in the area it shows that the health centre is equidistant from the other shops owned by the partners . Within a shorter distance is a branch of Boots and one other . . not much inconvenience to the patients there and the partners can increase their numbers in their own shops without the additional costs of running the health centre pharmacy . Shame about the health centre staff .

 Another pharmacy added to their closure target !

 

Job of the week

Pre-registration Pharmacists 2021
London (South), London (Greater)
Competitive package