National pharmacy bodies have welcomed the findings of a report by accountancy firm EY and urged the government for a quick policy intervention and further cash injection to prevent closures of struggling pharmacies.

The EY review, commissioned by the National Pharmacy Association (NPA), found that amid growing challenges posed by the Covid-19 pandemic, nearly 75 per cent of family-owned pharmacies in England could be forced to shut their doors by 2024 due to financial deficits and lack of new funding.

Findings should trigger action: NPA

“These are very sobering figures, but they ought to trigger action, not despair,” said NPA chair Andrew Lane, adding: “The government and NHS England have an opportunity to put things right, by re-setting the sector’s funding and empowering pharmacies to run with the clinical service agenda – an agenda that the Health Secretary recognizes will ease pressures elsewhere in the NHS.

“The NPA commissioned this report in order to generate the credible data needed to make ministers and officials sit up, take notice and take action.”

National pharmacy organisations, including the NPA, have been unanimous in stating that the financial pressures on community pharmacy contractors have been increasingly treacherous, leaving many owners struggling to cover the mounting costs and replace worn-out assets.

While some independent pharmacies have been trying to overcome the situation by applying short-term measures such as reducing services to patients and charging for services they provide, there has been a significant rise in pharmacy mergers and branch closures in the larger chains.

Sector needs urgent cash: EPB

Commenting on the latest EY findings, the Royal Pharmaceutical Society’s English Pharmacy Board has underlined the need for an urgent cash injection to support community pharmacies and their staff members to prepare for the challenges ahead, such as the upcoming winter season vaccination pressure and a potential second wave of Covid-19.

Claire Anderson, chair of the EPB, said: “During Covid-19, our profession has played a vital role in supporting care and ensuring patients can access their medicines, remaining open to the public throughout the pandemic. Pharmacy has demonstrated incredible resilience in facing up to the difficulties presented by the pandemic.

“It’s more important than ever for the government to back pharmacy financially and make the most of our profession, especially with upcoming winter pressures and a potential second-wave. Pharmacists deserve urgent funding support following an increase in demand for services, which has left many community pharmacies facing financial insecurity.”

The EY report noted that the pharmacies are under-funded to the tune of £497 million with 72 per cent forecast to be loss-making within four years if the current contractual arrangements carry on unchanged.

The average pharmacy will be making an annual loss of £43,000 by 2024, the survey has projected.

It also noted that many pharmacies will be unable to survive without a positive intervention from NHS England – limiting access to health services in many areas including remote rural communities.

Survey is reflection of reality: AIMp

Community pharmacy sector is currently underfunded and needs quick cash flows to maintain the existing network, the Association of Independent Multiple Pharmacies (AIMp) has said, adding that the EY survey is the reflection of the reality.

Commenting on the EY findings, AIMp chief executive Leyla Hannbeck commented: “This survey is consistent with what AIMp has been outlining, that the sector is underfunded and funding needs to improve to maintain the existing pharmacy network, a network that has shown how vital and valuable it is in the support it can offer to people in their local communities and society at large.”

CCA renews calls for fair funding for pharmacy

The Company Chemists Association (CCA) has welcomed the research which helps demonstrate the huge financial challenges that pharmacies of all sizes face.

Its chief executive, Malcolm Harrison, said: “The CCA has been calling for fair funding for the entire sector for some time. In March, we warned that pharmacy businesses, large and small, would not cope without adequate additional support and may be forced to close permanently.

“We will continue to work with our partners in the sector, NHSE&I and DHSC to press for reasonable and fair funding for the sector to enable it to continue to deliver the safe supply of medicines, urgent care services and healthcare advice without appointment.”

We concur with findings: PSNC

The Pharmaceutical Services Negotiating Committee (PSNC) has welcomed the survey findings, adding that PSNC, therefore, welcomes any attempts to dig further into the detail of the finances of pharmacies, and EY have done a considerable amount of work on this.

The chief executive of the PSNC, Simon Dukes, observed:” …We concur with their findings that the position of the NHS as a monopsony purchaser is dangerous for community pharmacy: the sector has been feeling the consequences of only having one customer for the past decade.

“We also agree that community pharmacies are in an incredibly difficult financial situation now, with many of them already making a loss and the situation set to worsen in the next few years.

“This is in line with PSNC’s recent letter to the government arguing for an uplift to the Community Pharmacy Contractual Framework: this is critical to ensure that pharmacies can continue to deliver what the NHS needs them to both through the pandemic and in the post-Covid world.”

DHSC to “carefully consider the findings of the report”

Meanwhile, in response to the EY survey the Department of Health and Social Care said: “We will carefully consider the findings of the report on independent pharmacy in England and any implications for NHS arrangements under the community pharmacy contractual framework.”

“During this unprecedented pandemic, £370 million has been made in advance payments to support pharmacies in maintaining medicine supplies and providing health advice. We are continuing to engage with the sector on funding to meet extra costs incurred during the peak of the pandemic,” DHSC added.

“With funding support pharmacies can provide better, more accessible services”

A West London-based pharmacy contractor said the EY report highlighted “some deep concerns and massive opportunity to NHS England to think again about what it wants from the pharmacy network.

Sanjay Patel, a pharmacist and Director at Innovate Pharma Services, said: “NHS England and the government need to urgently review their stance on pharmacy. They need to fund the sector better and consider what can pharmacy do for patients rather than how to cut costs.

“Having a fixed five-year global sum will simply not work as operational costs will continue to rise year-on-year. The current funding model in real terms is not a fixed amount, it is reducing year-on-year,” Patel explained.

“Many many pharmacies if supported with funding can provide better and more accessible services. A lot of these can be delivered cheaper by pharmacies than other settings.

“Sadly many pharmacy owners do not have faith in NHS England and the government to do. They are already considering their options before it is too late,” he concluded.

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