Sue Sharpe: Pharmacies with debt left in 'really desperate position'

Sue Sharpe: Each pharmacy has to manage its own problems
Sue Sharpe: Each pharmacy has to manage its own problems

The funding squeeze has left pharmacies already with "a lot of debt" in "a really desperate position", the PSNC's CEO has said.

In an interview with C+D on Monday (January 15) – a month after it was announced that fraud prevention service CEO Simon Dukes will take the helm at the Pharmaceutical Services Negotiating Committee (PSNC) when she retires in May – Sue Sharpe acknowledged that it is “a really, really difficult time for many in pharmacy”.

“Community pharmacy is really feeling the pinch,” from the funding cuts in England, an ongoing category M clawback and “massive increases in generic prices”, Ms Sharpe said.

“Each individual pharmacy has to manage its own problems,” she added. “Those that are exposed to a lot of debt are in a really desperate position.”

“It would be wrong of me to be in any way confident, on behalf of any pharmacy, that [the current funding situation] is something we can get through,” Ms Sharpe continued.

Ms Sharpe recognised that the sector is “not immune” to the financial pressures facing the whole of the NHS, but said it is “sad” that “pharmacies that are often really responsive to local needs…and in areas of high deprivation” are “being hit badly”.

“We have to recognise that – whether they accept it or not – there was a policy from [the] government, set out very clearly in [its] 2015 letter, that we have too many pharmacies. I’m afraid the growth in pharmacy numbers in the 10 years to 2015 did lead to that perception.”

Pharmacy's future and a new CEO

By the time her successor starts in May, the sector will be 10 months through the category M clawback, and Ms Sharpe is hopeful that generic prices will have stabilised.

She stressed that Mr Dukes is “someone with the right qualities to lead PSNC in the future”.

He was selected for his “leadership qualities”, which are “more important” than having a community pharmacy background, as is his “experience of working with government…passion for public service, and interest in health”, she added.

At the top of Mr Dukes’ to-do list will be “forging new, strong relationships with the Department of Health (DH) and NHS England”, and “ensur[ing] we have funding for the sector that is needed to support the really important care role that pharmacies are giving to people who need it across the country”.

On Tuesday, PSNC director of NHS services Alastair Buxton told delegates at a pharmacy seminar that the negotiator will "present [its] ideas" for a service-based pharmacy contract to the DH and NHS England in its upcoming funding discussions.

During the interview, C+D put three readers' questions to Ms Sharpe. Watch her tackle questions on purchase profits and generics price hikes here.

26 Comments
Question: 
How is your pharmacy coping with the funding cuts?

Mung Kee Majiq, Community pharmacist

Wether we like it or not ; I can foresee more cuts to come to the NHS in the next decade and community pharmacy is in no ways immune to this at all. As Brexit bites and the economy starts shrinking - the government will have to tighten the purse strings further - it is a no win position for anyone !! 

Sunny Jim, Pharmacy Buyer

Are you a remoiner? Like George Osbourne !!! The economy is booming, employment is the highest it’s been for decades...if you don’t like the UK, you are free to live in Europe...BET U DONT GO! 

Sunny Jim, Pharmacy Buyer

Reeyah....the cuts are here to stay, get over it. Pharmacy is worth what someone is willing to pay NOT WHAT YOU THINK YOU DESERVE..if you don’t like the funding, Christie’s are not short of buyers. 

John Ashworth, Community pharmacist

The government has made it clear that there are too many pharmacies . There are  8 within a mile radius of my house . 

We do not need that many pharmacies . The first round of cuts hasn't  had the desired impact . Be in no doubt there is more attrition to come .

Keith McElrea,

There is one within a 10 mile radius of mine and 3 in a 20 mile radius of it.  Perhaps a structured and targeted plan rather than this slash and hope the first two that fail are within your 1 mile radius and not my 20 mile one..

S Morein, Pharmacy Area manager/ Operations Manager

Those that have overpaid for the excessive goodwill values why should the taxpayer fund that error of commercial judgement? They took the risk, drove the goodwill consideration beyond what was sensible and now whine about it. Tough luck

Sunny Jim, Pharmacy Buyer

Totally agree. s morein

nader Siabi, Community pharmacist

....... and thanks to you Sue and your incompetent team that ran the contractors into the ground. Enjoy your retirement fund!!!! We hope we never see you anywhere near the pharmacy affairs 

Keith McElrea,

Pharmacists are telling me regularly that they're now struggling to make ends meet and many highly experienced pharmacists are now considering selling up.

First we saw efficiency drives from Government in the mid 2000's which resulted in Cat M and the death of any profit in branded medicines for pharmacies.  This was closely followed by the economic crises in 2008 and the governement came back for another bite, increasing Cat M as they have continued to do since.  At the same time in England, control of entry was relaxed, with the 100 hour exemption, depsite the protests of Community Pharmacy that this was a bad idea and put the pharmacy network at risk, it was deemed to be in patients interests and progressed, creating a flood of new entrants into an already busy sector.  Now, according to DoH we have too many pharmacies, so funding has been cut again and further, in a bid to reduce this inflated number by attrition rather than in a planned and structured manner.  A fund was set up to protect pharmacies in areas the government wanted to, but before it was even off the drawing board, that fund was halved.

The DoH is now back for a third bite of the cherry to fix this, a problem of it's own making.  Well we feel that Pharmacy has already given it's pound of flesh three times over, there is nothing left to give.  We need the resources to train and invest in our staff, to appropriately staff our businesses and to pay our drug bills, our premises rent and utility bills, as well as pay the loans taken on by owners to purchase our businesses as well as to make a living ourselves.  

Pharmacy already provides incredible value to the NHS.  It is the pressure valve for GP and A&E services in current situations like the Flu crises and it is time this was recognised and the slashing was stopped and reversed.

S Morein, Pharmacy Area manager/ Operations Manager

Why does the DH have to fund the loans taken out by owners to pay for the excessive goodwill values of contracts. There is zero benefit to patients or taxpayers in rewarding excessive risk taking by those who failed to analyse their exposure to debt. That money should be spent on patient care not driving up greedy goodwill values.

Jonny Johal, Pharmacy Area manager/ Operations Manager

Quite right SM, the NHS is an organisation for patients, not a charity for pharmacy contractors, they just have to recognise the economic reality. The taxpayer doesn't owe contractors a living.

Keith McElrea,

In response to both comments, the model the government chose for Community Pharmacy for this country was a private contractor model, as they have done with GPs.  They could have opted instead for a network of NHS owned and run pharmacys, but they didn't.  The reference to loan repayments is that if you don't just want multiples to mop up all of these independent community pharmacys with their corporate cash reserves (as Area Managers that may be what you want but I belive most would agree it would not serve the greater good) then Pharmacists need to be able to buy Pharmacies.  We do not set the Goodwill values, in fact, it was the multiples buying up so many that historically drove them so high.  But Pharmacy contractors have taken out loans, guaranteed against their homes and have in most cases, put everthing they have on the line to buy that pharmacy, on the basis that for years this has been a strong and stable industry capable of repaying the loans taken, over the timescale of the loan.  They have invested in being a part of the NHS and contractors are as  passionate about pharmacuetical care and their patients as anyone, if not moreso.  But when funding is then cut drastically 3 times in a decade, a contractor who has taken a loan over 10 or 20 years in good faith did analyse their exposure to debt.  They just didn't forsee that funding would be slashed, slashed and slashed again and they are genuinely struggling to make ends meet. The NHS, while of course not responible for their individual bank loans, has a responsibility to ensure continued provision of pharmacuetical care, and these cuts put the pharmaceutical care network model, which they opted to use, at risk.

On a spearate note, there's a suggestion of greed and of milking the NHS in both comments.  A community pharmacy contractor owning one average sized pharmacy, will, for most of their working life, be paying themself substantially less than they would earn as an employee pharmacist, and the value of their business when it comes to selling it, will be probably no greater than that employee pharmacists pension pot.

Ilove Pharmacy, Non Pharmacist Branch Manager

You reckon an average contractor earns similar/less than an aerage employee over a lifetime? Very doubtful and doesn't tally at all with what  I have seen. 

Keith McElrea,

I don't reckon, I know.  They will earn less for the duration while they are repaying their loan which could be 10 or 20 years and their business in most cases will be the bulk of their pension.

Ilove Pharmacy, Non Pharmacist Branch Manager

Very few will fall for that tall tale you've just told. You must know different owners to me then.

Wolverine 001 , Pharmacist Director

Very well said these comments are from people who have no idea.... 

Jonny Johal, Pharmacy Area manager/ Operations Manager

Am I wrong in thinking that being a pharmacy contractor and owning a pharmacy is a career choice, un-coerced participation, free to leave if you find that disagreeable? Are you suggestion that taxpayers should be responsible for your poor career choice and cover your ill-judged financial liabilities? I am a taxpayer, can you understand how I feel?

Uday Thakrar, Superintendent Pharmacist

I have never had so much cash flow issues in my 30years plus of being an independent contractor and feel very isolated.
 

Sunny Jim, Pharmacy Buyer

Uday....if you’ve been in the business for 30 years, you must have made your money by now, stop whinging , 

Keith McElrea,

The sad thing is Uday, that while banks currently view Pharmacy as a safe and stable bet for lending they will be sympathetic to borrowings and short term cash flow issues.  However as these become regular issues for many businesses their tolerance will diminish, and their view of Pharmacy as a favourable sector will dissapear, we will then see comumunity pharmacies forced into closure.

Sunny Jim, Pharmacy Buyer

Out of the 11,000 pharmacies , how many have closed? Lloyds thretclose 200 Which is 1.8% and even those are being bought.....if you do close it’s tough luck...you can’t have immunity from cuts...

Wolverine 001 , Pharmacist Director

this coming year is going to be very intresting indeed... not just for contractors but for employees, locums and indeed pharmacy buyers!!! 

Ilove Pharmacy, Non Pharmacist Branch Manager

Very insightful of you.

Wolverine 001 , Pharmacist Director

immunity from the cuts is your punch line...you live in a fairy tale 

Jonny Johal, Pharmacy Area manager/ Operations Manager

Be real, we all know there are too many pharmacies and pharmacists. This is the reality, please accept it and move on accordingly. If your business is not profitable - do what is necessary instead of asking for handouts from the taxpayer.

Reeyah H, Community pharmacist

*This comment has been deleted for breaching C+D's community principles*.

 

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