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‘Our pharmacy made a loss for the first time in 11 years’

"We run a tight ship, but the pharmacy’s income is tighter"

An anonymous contractor explains he has been forced to refinance his company, cut staff wages and stop saving a pension due to the crippling financial conditions

We operate two community pharmacies, both in small rural market towns. One pharmacy is the only pharmacy for six miles in any direction, the other has two nearby pharmacies. The first qualifies for the Pharmacy Access Scheme, the second does not.

Before the funding cuts were introduced, our business was financially stable and had an approximate annual turnover of £1.9 million, with £500,000 of retail and over-the-counter sales.

After the cuts came in, business became much more difficult. This was despite pre-emptive measures, such as leveraging existing suppliers and contracts, cancelling discretionary spending, and abandoning planned investment. The impact of the headline funding cuts was exacerbated by a retrospective category M clawback, for which no planning or mitigation could be undertaken.

We have had to cut our opening hours, removing additional non-core opening hours, as we had to reduce our overheads. While pharmacies covered by the Pharmacy Access Scheme were partially protected from the full impact of the cuts, in reality they still had their funding cut (by 1% in 2016-17, then 3% in 2017-18).

The problem is that costs have been rising steadily thanks to the impacts of the government’s changes to the national living wage, pensions auto-enrolment and business rates; as well as a general deterioration in trading conditions in the retail sector. We have found it difficult to pay our taxes on time because of the unpredictable swings in our NHS income.

In the end we had to refinance the entire company, extending the term of our loans from six years remaining to a new 15-year term. This has helped with cashflow from month to month, but has cost us more than £40,000 in bank charges and professional fees. It will cost us much more in the long run, thanks to the longer repayment profile and higher interest rates. This is incredibly galling, as I haven’t paid into my own pension in around six years. We run a tight ship, but the pharmacy’s income is tighter. There is no room for capital investment.

We have also had to invest thousands of pounds in hardware compliant with the Falsified Medicines Directive (FMD). We have to finance the ongoing costs out of our revenue, with no certainty about the long-term usability of the FMD system.

Our business made a loss last year for the first time in 11 years. Unless things improve soon, we may make a loss again this year. We cannot carry on like this. My staff are already working flat out. I work at least 60 hours a week and cannot do more without impacting on my health and wellbeing. I have had to cut my own salary, and currently operate on around 15 days annual leave a year, working six-day weeks plus extra in the evenings and at weekends.

I am concerned that the confidence of the bank will be shaken if we should need to go back to them to rearrange our cashflow facilities. As a condition of our refinancing, we reduced our overdraft from £90,000 – capitalising on the full £90,000 as we were overdrawn up to our limit at the time – to £10,000. This does not leave much room for manoeuvre given the escalating costs of many medicines.

We will shortly have to introduce charges for medicines delivery services, and monitored dosage systems. We may have to scrap other locally commissioned services because they are no longer economical. My patients will suffer, because in areas like ours we have a lot of patients in rural poverty, particularly as access to services is limited by cuts to public transport. We don’t want to do any of these things, because they are a lifeline for the people we look after, but we do not have a choice.

By far the most distressing impact of these cuts has been on my staff. Nobody has had a pay rise in years, despite the rising cost of living. Pharmacy staff are absolute diamonds who always give their all to look after patients with little or no thanks or respect from the rest of the health system.

This article is part of a collaboration between C+D and the National Pharmacy Association to draw attention to the financial conditions independent contractors are facing.

Do you have a story you’d like to share? Email C+D features editor Thomas Cox at [email protected] or tweet @ChemistDruggist using #PharmacyCrisis.


Gary Jones, Community pharmacist

I hope the department read these posts before there is nothing left of the community pharmacy network. After all, it’s the most vulnerable people in society who will suffer the most. 

ABC DEF, Primary care pharmacist

No one with a sane mind should consider even owning a pharmacy nowadays. The whole model is just setting up for failure. The sector is a sinking ship, if not already sunken. Sell your ever depreciating store(s) before it's too late!

R A, Community pharmacist

I think the current model of remuneration that is in operation is tailored to deal with large companies in UK.

Unfortunately, it means bad news for individual pharmacists who operate their own pharmacy. This makes me sad because pharmacies owned and operated by individual pharmacists provided continuity to the local communities because often one pharmacist worked in a specific pharmacy for most of their professional life. With a multiple operated pharmacy they put so much pressure on individual pharmacists they burn out and call it quits leading to a new face every few years. As a result, it becomes difficult for members of the public to build the trust they traditionally had with their pharmacist. 

This is leading to an erosion of the goodwill pharmacy business used to have traditionally.  Eventually when the involvement of the pharmacist is completely separated from the day to day activities of operating a pharmacy the remuneration is likely to plunge significantly. The hapless corporate executives of multiples will blame on unforeseeable circumstances when it was the consolidation of the multiples that acted as a catalyst for the demise of the sector.

MR Dissillutioned, Pharmacy owner/ Proprietor

Two years ago we were dispensing 1500 less items than we are now yet our remuneration is roughly the same !

Jackie Robinson, Marketing

In 11 years as self-employed I have had 4 years at a loss...that's business

Pok Chow, Community pharmacist

But your lost was not a man made. This is a NHS delibrately make you loosing money

Mr CAUSTIC, Community pharmacist

Didn't the government state they expected that thousands of pharmacies would close ? A better career choice is driving underground trains for London transport ! Much less stress . With FMD checking even more time is required for the dispensing process

Ben Merriman, Community pharmacist

Along with real time exemption checking...

Reeyah H, Community pharmacist

Wholeheartedly agree. It’s like I’m reading my own story, except I’m not even covered by Phas- so imagine that?! My poor staff work themselves to the bone. The DHSC will continue until most of us shut down. 

Dodo pharmacist, Community pharmacist

I can only sympathise with your plight, we are in exactly the same situation, as are most  pharmacies in England.

Unfortunately there is no end in sight as DHSC are dead set on forcing pharmacy closures by financial attrition:

Clarke Kent, Community pharmacist

The sobering reality. I feel for you. Good pharmacist’s, especially independents work above and beyond for the needs of their patients, but cannot sustain this current remuneration model, of cuts, with increased costs across all aspects of the traditional pharmacy business model. Thanks for sharing your story. 

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