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'17p-per-item drop has caused my worst financial pressure in 30 years'

Raj Radia: Every single independent contractor is feeling the pinch
Raj Radia: Every single independent contractor is feeling the pinch

A contractor has told C+D the latest 17p-per-item price drop has contributed to the “worst” financial pressures on his pharmacy in 30 years.

Last week, the Pharmaceutical Services Negotiating Committee (PSNC) announced pharmacy owners in England will face an additional 17p-per-item price drop in July. It comes on top of the ongoing category M clawback – which already represents an average drop of around 17-18p-per-item – and is due to end on July 31.

Raj Radia – who has owned Spring Pharmacy in Hackney since 1987 – told C+D yesterday (July 11) that the “frightening” combination of the latest price drop on top the ongoing clawback – as well as the funding cuts – has “made life so much harder”.

Last year, Mr Radia told C+D he was offering a sore throat test service to offset the impact of the cuts, but over a year later he is still “struggling to survive”.

“For the first time in my 32 years [as a contractor], I’ve got cashflow pressures,” he added.

“We need to work smarter”

Mr Radia said he and his staff “need to work harder [and] we need to work smarter” to relieve the pharmacy’s financial pressures.

“I’m thinking about [offering a] travel service [and] I’m thinking I should look at independent prescribing…just to survive and make sure I can still maintain the staff I’ve got,” he said.

Every independent contractor “feeling the pinch”

Mr Radia, who is also chair of City and Hackney local pharmaceutical committee (LPC), said “every single independent contractor is feeling the pinch”.

It will be the members of the public that will suffer if pharmacies aren’t able to provide their “valued services”, Mr Radia said.

“I’m such a proactive pharmacist. I do dispensing, I provide services to the maximum of what I can, I’m chair of the LPC, and I sit on the transformation board,” he added. “I try do to the right thing and [the situation] is just crazy.”

19 Comments
Question: 
How is your pharmacy coping with the latest 17p-per-item price drop?

max falconer, Superintendent Pharmacist

All single independent contractors know that the pain is not even remotely shared equally and hasn't been for at least the 40 years I've been qualified.

There is a reason why pharmacies are becoming concentrated in the hands of US multinationals and larger groups. They all know the reason, have kept quiet, and have been extracting excessive profits, relative to single indcpendents, from the NHS consistently year after year.

Anyone with even a rudimentary understanding of the DT is aware of this but it's obviously either beyond the wit of the DoH or they have deliberately chosen not to confront the issue possibly with the full knowledge and maybe complicity of the PSNC.

It's time to reclaim pharmacy for pharmacists from large businesses.

Peter Sainsburys, Community pharmacist

It is not possible to reclaim pharmacy from the greedy multiples unless the government adopts a Germany-style approach where you can only own a few pharmacies. That will never happen in the UK, too many peoples pockets are being lined by the current system.

Too many people with "buddies" who are "really friendly guys" but only want your cash.

Peter Sainsburys, Community pharmacist

This is a sad story, but he owns a pharmacy in Hackney and has worked there for decades. He won't be short of cash, so can probably just retire or get started on a  new project. He does not have 50k+ student debt hanging over his head either.

Maybe if he closed the shop and moved all his operations online, he could continue trading.

Sue Per, Locum pharmacist

Spot on, he certainly must have raked in when the times were good, and if he were to market his pharmacy, i am sure he will walk away smiling, bagging a small fortune.Typical weep-opera from the "C&D" editorial as usual.

Time for a radical shake-up. the contract is not fit for purpose.Disincentivise sweat shop assembly lines!!. Incentivise professional services - Clinical

 

 

Bunny Boiler, Community pharmacist

 

 

With all due respect, merely offering a sore throat service and ‘thinking about providing a travel service’ one year on is not going to reverse the cuts. A travel service is now a basic offering in a pharmacy. The DH is not here to keep pharmacies in business and this means the pharmacy themselves will need to develop their service offering by quickly adapting.

Another Pharmacist, Hospital pharmacist

On a personal level I feel sorry for anyone kepy up at night by the fear that their livlihood could disappear; how will they pay the next wholesaler bill; what if business rates rise; what if there's another Cat M Clawback etc etc. However, the butcher and the Grocer did the same 15-20yrs ago, the local hardware store did it, even big brnads like Maplins have done it. I say it all the time on here, but this is community pharmacy's dying breaths, and the treasury are making sure of it. As per Barry's advice, get out and get out now. I really do feel for the poor ikes just graduating or starting university. Community pharmacy as we know it has 10yrs at best - boots, lloyds or p2u wont be the winners, it'll be the companies that havent even started up yet that will see the gaps and move quick that will capitalise. The consumerisation of healthcare is happening and HMG isnt gonna protect you, it's helping it, with one funding cut at a time. 

Barry Pharmacist, Community pharmacist

You're right AP except for one thing. I don't think it will take anything like 10 years. In 5 years the number of pharmacies will have fallen dramatically.

In the next 18 months EPS levels will be at the threshold to make a move to an "amazon-type" model. Automation costs and software costs will have fallen and distribution rates will be cheaper than ever. There may even be remote supervision as there is in other countries. I do agree that the shift will be dramatic.

Young pharmacists need to use the next 12 months to become a prescriber or another set of skills and get into a different field to better use their skills. 

A.S. Singh, Community pharmacist

Online automisation will only change the NHS contract changes. Currently the margins are too small to allow for large profits.

John Smith, Locum pharmacist

Another contractor crying poverty and citing that 'staff must work harder'. Threatening redundancies. 8000 item a month pharmacy, full quality payments made, healthy MUR figures. Pharmacies being sold for record prices. Seriously, doses anybody believe this anymore? The 17p reduction is due to falling wholesale prices. Something wrong with your business model pal if you're struggling. 

Sue Per, Locum pharmacist

Nothing wrong with the pharmacy model.Its the usual trick and tripe, sponsoredd by the C&D, - if you dont plead poverty and beg, you will get nothing....... Week in week out you will see these usual artcles. With this editorial, even  "fake news" woud seem to have more credibility.

Dave Downham, Manager

...and what, pray, do you get for pleading poverty apart from yet another cut?

SIMON MEDLEY, Community pharmacist

silly me- ive just dreamt my cash flow going into reverse-  thanks for making me realise i just need to adjust my business model- into something else other than uk pharmacy 

Peter Sainsburys, Community pharmacist

A Dominos franchise, a corner shop, or a kebab shop will all make more money than a pharmacy.

Barry Pharmacist, Community pharmacist

Mr. Radia isn't crying poverty. He is saying that his business is feeling the pinch and the pain is worse than ever before.

There are a lot of £1,000,000+ businesses for sale and that is because they have the common sense to realise that if they don't sell quickly their value will fall dramatically once this year's accounts are finalised. Good luck to the sellers but the tide is turning.

 

S Morein, Pharmacy Area manager/ Operations Manager

I think C&D is some strange "Twighlight Zone World" as the same mantra of overpriced contracts with goodwill considerations rapidly falling was posted for the last Cat M adjustment. And the previous one. And the previous one. And the previous one....etc . But miracle of miracles goodwill prices over that period have increased (as have net profits). So in this world of Pharmacy Groundhog Day it appears that the facts are entirely the opposite of the financial ruin "claims" of the vested interests of the contractors.

Watto 59, Pharmacy owner/ Proprietor

I would love to know how any English pharmacies have increased net profits given unchanged NHS/OTC volume.  Could you enlighted me further on how they have managed this?  I would be prepared to pay for such esoterica.   

Dave Downham, Manager

Wrong, wrong, wrong and.....wrong

Barry Pharmacist, Community pharmacist

“every single independent contractor is feeling the pinch”

The pain is not shared equally and everyone knows it. How about asking PSNC what is being done to share the load better?

Peter Sainsburys, Community pharmacist

LOL - because we all know what the PSNC are doing about it.

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