Layer 1

Pharmacy clusters – what they are and why DH wants them gone

DH believes pharmacy clusters discourage efficient pharmacies with large prescription volumes

The government has used the term several times since it announced cuts to pharmacy funding – but what is a pharmacy 'cluster' and why is it so keen to remove them?

The Department of Health (DH) first used the term "clustering" to describe areas where there are several pharmacies in its open letter announcing a 6% cut to pharmacy funding at the end of last year.

Since then, it has used the term in its justification for scrapping establishment payments and plans to make it easier for two pharmacies to merge.

So what are clusters, and what does the DH intend to do about them?

What's the definition?

The DH defines “clustering” as a situation where three or more pharmacies lie within 10 minutes’ walk of one another. It claims that 40% of English pharmacies are currently situated in a cluster.

Why doesn’t the DH like them?

The DH believes that the current system of establishment payments – which it intends to abolish – encourages pharmacies dispensing “relatively low” volumes of prescriptions to cluster along high streets or around GP surgeries, it said in source papers released ahead of a pharmacy stakeholder event last month.

Rather than "efficient pharmacies with large prescription volumes”, contractors are tempted to maximise their funding by owning several low-volume pharmacies in a cluster, which are each paid an established payment, the DH claims.

What does it plan to do about them?

As well as amending the law to allow pharmacies in a cluster to merge, the abolishment of establishment payments will also reduce the incentive to operate pharmacies in a cluster, the DH believes.

What does the sector think?

An interim summary of responses to the government’s consultation on the funding cuts revealed that not everyone agrees with the DH’s assumptions about clusters.

According to the DH, some respondents said clusters are not necessarily inefficient, and may be the result of high prescription volumes in some areas or the “commercial viability of certain locations”.

Last week, Pharmacy London chief executive Rekah Shah stressed that clusters are needed in London because of the "tailored" services they offer to meet the "diverse cultural and language needs" in the capital.


Do you think clusters of pharmacies lead to low prescription volumes?
Total votes: 490


Do you consider your pharmacy to be situated in a “cluster”?

We want to hear your views, but please express them in the spirit of a constructive, professional debate. For more information about what this means, please click here to see our community principles and information


Tony Schofield, Community pharmacist

With control of entry in place since 1988 how do the idiots that put this nonsense together believe that contractors could plan to increase the number of premises they have in a location? Also, who believes that bringing in another establishment payment makes business sense when it is obliterated by the cost of another pharmacist, business rates and rent? God help us.

Harry Tolly, Pharmacist

Tony, You probably remember the reason that cost plus was removed. The reason being stated at that time was that it was subsidising small inefficent pharmacies !!!

Same old DoH, same old tune. Totally bereft of truly innovative thinking and poulated by jobsworths who have ZERO patient facing experience.

Brian Austen, Senior Management

When Pharmaceutical Needs Assessments were implemented they should have addressed the oversupply of pharmaceutical services with recommendations about how to solve such situations. The large multiples should have been forced to close contracts where there were several from the same company in one town. Sensible, efficient, value for money solution which would also have stopped further applications where they were identified as not required in the PNA.

Rekha Shah, Community pharmacist

Chris you make some fantastic points and I totally agree with you. To add to them I'd like to add another point- that it is not just about getting a few£K's in establishment payments as this would hardly cover the fixed overheads of rent, rates & utilities let alone pay for the pharmacist and support staff! Clusters are bound to happen where it suits the people using these pharmacies as they go about their daily lives and distance between sites is totally unsophisticated way of describing/deciding if a given number of pharmacies are "clustered" or not.

Harry Tolly, Pharmacist

Rekha, There is a long standing agenda against London and urban based pharmacies. There is little appreciation of the need for patient choice and convenience especially in high density urban areas with poor access to GP services. There are powerful and well financed entities that have drummed this into certain very gullible MP's, (look at the Parliamentary debate about the cuts and you will understand who and what I mean).


There is also the lack of transparency in that ANY HONEST equality impact assessment will show certain demographics of owners and patients being dispropotionately affected.


London (and maybe other urban?) Independent contractors need to get together and take the DoH to judicial review and force it to release information about their clusters. The DoH DOES have the cluster maps and volumes for every pharmacy and who the owners are, and they are being thoroughly dishonest in saying that they do not know which pharmacies will be disproportionately affected. The PSNC also has these cluster maps (see also the OFT Inquiry of 2003, usual suspects)

M Elnemy, Non healthcare professional

contractors have been barking on about cuts for nearly a any pharmaccies have closed many locums applying to open a pharmacy 100s..........if you dont belive me, speak to the ppl that specialise in pharmay applications....diaries are FULL..........!!!!!



David Holdsworth, Community pharmacist

The DH played a part in creating these 'pharmacy clusters' when it introduced the 100 hour exemption from control of entry.

M Elnemy, Non healthcare professional

100 hr pharmacies rock...!!!!  I suppose you want immunity from competition David

Gursaran Matharu, Community pharmacist

The DH does not understand the complex demographics that exist, especially in London. I locum in a pharmacy in which the CCG provides a host of services yet these services are not accessible to the residents across the road because they fall under a different CCG.

The use of AQP tendering by CCGs has resulted in a reduction in the number of services being provided in a locality, simiply because contractors have not bid for them. I have come across CCA companies that can no longer supply EHC because of this.

Furthermore, we have cohorts of patients that will only use a particular pharmacy because of the relationship they have with the pharmacists.

Why doesn't this Government close the cluster of betting shops, oulets selling cheap alcohol and e-cigarettes and introduce minimun price for alcohol. It would have a bigger impact on phyiscal and mental health than anything else.

Alan Whitemann, Communications

Government does not have to fund betting shops etc and therefore has no interest in curtailing them but does spend a great deal funding pharmacies , which are everywhere. Some of the points you make are valid but sorry to admit generally there are still too many pharmacies .  

Chris Mckendrick, Community pharmacist

Dear "comma", there are NOT too many pharmacies. The fact that there are more pharmacies in centres of population and in proximity to the source of their work is common sense and it gives the community pharmacy network flexibility, choice, capacity and a degree of robustness that quite frankly the rest of the NHS would give it's eye teeth for. We should be fighting tooth and nail to preserve the most responsive, patient orientated, customer focused, geographically and culturally diverse part of the NHS and the D of H should take advantage of all the outlets available to it and be using community pharmacy to maximise it's reach to those who can't or don't access other parts of the NHS, either because they're under resourced, under staffed or on strike.

If the establishment payment did encourage contractors to have multiple small pharmacies instead of one large pharmacy then why are there any pharmacies in England dispensing over 3,000 scripts/ month at all? Surely all the contractors and large chains that have all the  10,000+scripts/month pharmacies must be run by idiots, because even an ordinary hospital pharmacist in the DofH who knows nothing about community pharmacy can see the irresistable attraction of splitting up one large pharmacy business to make 2 or 3, even 4 all within one big cluster round the local surgery. Well I'm a COMMUNITY PHARMACIST and was trained as a SCIENTIST and as such I need EVIDENCE to back up this assertion and there is none. Even if there was a desire to follow this practice, Control of Entry prevents it anyway.

I just wish the D of H was honest enough to come out and say "we don't want small independent pharmacies, we only want large pharmacies and to deal with the multiples". It would save a lot of pretending and trying to make up reasons and justifications for doing away with the most valuble asset on the High Street.

P M, Community pharmacist

ah but the goverment and nhs does have to fund it via hospital admissions and policing drunkeness etc

and betting shops should pay larger tax revenues and not be allowed to base themselves offshore



Job of the week

Pharmacist Manager
Midlands, Cheshire & Dorset
Salary dependent upon experience