'More than half of pharmacies are in deficit'

More than half of the pharmacies registered with the General Pharmaceutical Council (GPhC) are facing a deficit, according to a recent study.

The report, titled The Business Impact of pharmacy registration fees on registered pharmacies in Great Britain, has been prepared by consultancy firm Ernst & Young (EY).

The study, commissioned by the GPhC, observed that “the sector is demonstrating a notable fragility”.

Out of the 14,313 GPhC registered pharmacies, the study analysed the overall performances of 5,424 large pharmacy chain premises (LPCs), 18 medium-sized pharmacy chain premises (MPCs), 10 small or independent pharmacies (SIPs), 10 pharmacies that are independently owned and are the only pharmacy operating in a given town (ISIPs) and three online pharmacies.

Researchers observed it as a reflection of a “challenging environment which included changes to funding available to pharmacies in England and reductions in drug reimbursement.”

According to the report, two of five LPCs and two of five MPCs were in financial deficit in 2018. Seven out of 10 ISIPs and three out of 10 SIPs were also reported to be in deficit during the same period.

All three online pharmacies selected were also incurring net losses.

“Rising business rates and the impact of business rates on smaller businesses are also well-known challenges facing high-street businesses in general,” the report read.

GPhC last week proposed a 39 per cent increase in registration fees for pharmacy premises, a move that invited strong criticism from the National Pharmacy Association.

EY’s report said an increase of £103 does not have a significant impact on financial performance, except for ISIPs, but suggests the regulator took care of the system when considering the extent of fee rise.

“It is of note that ISIPs were more likely to be in deficit and registration fees were a larger proportion of their surplus/deficit on average than other strata, and as such future policy should consider the sustainability of services in areas served by a single pharmacy,” it added.