Jeremy Meader would like to see a national framework for sustainability and transformation plans so community pharmacy can make its mark. Numark’s managing director talks to Neil Trainis

 

A coffee shop next to Euston station might not seem like an obvious place to talk about community pharmacy’s future but Jeremy Meader is unfussed.

“We’ve certainly seen members in a far more precarious financial position,” the managing director of Numark says as he ponders whether the government’s dreaded and despised funding cuts have pushed any of the chain’s pharmacies towards closure.

“That does depend on individual cases, depending on when you purchased your pharmacy, the finances of the pharmacy. The group probably under most pressure is those who have bought in the last few years who borrowed money who now have major uncertainty and are not seeing the revenue they thought they would.

“I’m hearing an awful lot of our members who are using money at the moment from outside the business to support it. Cashflow is undoubtedly getting very, very tough.”

Jeremy, who took over the reins from John D’Arcy in February, is, much like his predecessor, a pragmatist and a realist. Pretty useful qualities when heading up a body that strives to provide support for community pharmacists trying to keep their heads above water in an increasingly challenging NHS.

Some £320 million in cuts, confirmed in the High Court in August, have jeopardised the futures of pharmacies across England. The PSNC and National Pharmacy Association, embroiled in a lengthy legal struggle with the government and its lawyer James Eadie, dubbed the ‘treasury devil,’ have moved on. Jeremy considers the impact of the measures on his members’ services.

“I don’t think they are deliberately dropping services. Pharmacies are willing to invest in services if it’s financially viable to do so. But if the pharmacy is under pressure, if staffing is under pressure, there has to be a commercial decision as whether to continue that service.

“I think most pharmacies will always make the call in the patient’s favour where they’ve got the option of doing so but undoubtedly, if things are very, very tight, they might have to look at some and say ‘actually, that is not working for us.’”

An engrossing legal tussle has come and gone but it seems sustainability and transformation partnerships (STPs) are here to stay. At least while the Conservatives are in power.

A survey this year by Pharmacy Business in association with the PSNC revealed pharmacists have struggled to establish themselves with STPs, the party’s way of moving care out of hospitals and into local communities.

Many local pharmaceutical committees reported those heading up STPs were not interested in pharmacy. James is asked how Numark pharmacies have got on with STPs.

“It’s been very mixed. We would not disagree with the findings from your survey. Speaking to our members there does seem to be very mixed views. The majority I think in truth are definitely struggling.

“There is definitely a desire to get engaged but there’s an awful lot of bureaucracy to get through to that to end up with something that is deliverable and, critically, that the pharmacy is being remunerated for.

“At the moment we’ve got a bit of a disconnect. We’ve had this in play now since 2016. Again, it’s something you’d like to see a national framework for rather than have to deal with so many silos. That again makes it difficult. If you had national standards for these things, it would make it much easier.”

The government might counter that by suggesting different parts of the country have different health agendas and priorities.

“That’s absolutely right. One of the great benefits of pharmacy is a really good pharmacy is able to understand the local healthcare needs and tailor its services to that. But that said, whether you’re providing a service for COPD or for diabetic patients, fundamentally there should be some common standards,” Jeremy insists.

“Whatever the service is, there should be a framework and a better way of doing it that would at least ensure more consistency rather then everything having to be done on an individual basis. For pharmacy, if you’ve got to deal with more than one body, it’s gets more complicated.”

One wonders whose responsibility within pharmacy is it to push for a national framework for STPs.

“Any representative body I think has got a responsibility to push for that. There are a number of bodies that represent pharmacy interests and that’s been a challenge for as long as Numark has existed.”

He is adamant Numark has “a responsibility on behalf of our members to lobby” for that as it does on a range of issues.

“We do lobby actively. If there’s a couple of papers coming out we will, more often than not, submit a view on that based on what we’ve heard from our members.

“We run a number of advisory boards across the country recognising the four nations of our membership, we will always try to put forward a view that is consistent with that of our members. In the future there has to be more lobbying.”

Talk to anyone at Numark and they will probably tell you it strives to provide its members with what the company itself describes as “virtual head office” support to help them run their pharmacies. Jeremy sees a wider role for Numark.

“If some of the stuff that was being commissioned was more to a national standard, it would make it much easier for Numark to represent our members and, maybe in conjunction with a larger member, pitch for providing the services.

“The problem is because each of those is individually done at the moment, that’s hugely time-consuming. So we will lobby to try and change that because some of us should be able to do better on behalf of our members.”

He suggests a national minor ailments scheme in England “would be an obvious thing to do” even if it appears never likely to happen.

“If you look at what’s happened in Scotland, the system is working extremely well. We’ve seen a few of the commissioning groups in the UK have gone back to that but it’s a minority. I think it’s a great way pharmacy can add value but at the moment it’s not recognised,” Jeremy says.

It is not solely local healthcare structures, many of them lead by GPs, that have preoccupied the minds of community pharmacists. Take the price of some generic medicines which a National Audit Office report this year claimed greatly increased in 2017-18.

The report identified a range of supply-related factors that may have been behind the rises and an unexplained “unexpected growth” in the margins of wholesalers. Jeremy, who has worked at Phoenix and Alliance Healthcare, both members of the Healthcare Distribution Association, is asked if he thinks those price rises and growth in wholesalers’ margins are linked.

“The generics market runs under a unique set of circumstances. The global market is quite cyclical. Last year we saw some prices rising. This year we’ve seen the absolute opposite. I’d say prices at the moment are absolutely on the floor and availability is much, much better.

“Last year there was a certain set of circumstances that all clawed together. There were some shortages in the marketplace. Inevitably when that happens, and you can see on a day-to-day basis the minute prices are rumoured to be going short, an element of buying takes place and that does tend to push pricing up.

“The market does tend to adjust to that. I think in the last couple of years as well, from a manufacturing point of view, we’ve seen some manufacturers make strategic decisions around what is profitable and what is not profitable.

“You’ve always got to bear in mind, if you look at generics pricing on a global basis, here there’s a very, very low price for generics compared to lots of other countries across the world. There’s always potentially an export market as well.

“Whilst lots of reports were saying wholesalers made incremental money, there are people who look at the additional costs wholesalers are taking on. There’s a few examples. Look at our fleet at the moment. We’re having to invest more and more in terms of temperature control. It probably puts £10,000 on the cost of a van that takes 15% of capacity.

“And also, with more compliance coming into the market, increasingly we’re having to invest more and more on that. That’s a hidden cost. Then there’s FMD (Falsified Medicines Directive) and that will probably affect about 15% of the packs we have.

“We handle five million packs a week. Both from the time and cost point of view, you look at that and you think ‘that does not sit comfortably.’ The reality is in the generics market, there is always likely to be fluctuations and last year was exactly that.”

Steve Oldfield, the chief commercial officer at the Department of Health and Social Care (DHSC), would tell an inquiry that there was no “concrete evidence that wholesalers’ margins were increasing in a way that we could entirely explain.”

Yet the government’s decision to use manufacturers’ data instead of wholesalers’ data to inform its concessionary pricing formula has seen prices fall and the pressure on clinical commissioning groups reduce “very significantly.” Was that revelation enough to implicate wholesalers in the escalating price of generics?

“I wouldn’t agree with that. If you look at the margin that wholesalers make, we are operating on an extremely low, single-digit margin,” Jeremy says.

“I’d look at that and say ‘well, if there was clear evidence that we were making excess profit…’ nothing could be further from the truth. It is an extremely tight margin, wafer-thin, worse than grocery wholesaling by a considerable way.

“I think it’s extremely tight for the service that’s provided, the large wholesalers providing twice daily deliveries 44 times a month…there is ongoing cost pressure there. I think the fact (the NAO report) couldn’t physically prove that probably…is indicative of how complex that marketplace is because it is very difficult to isolate one factor from all the others that constantly go on in the market. If one manufacturer drops out, it has a significant impact on the market to naturally adjust.”

Jeremy is asked if Numark pharmacies found it hard to source drugs because of the rising price of generics.

“I think you have to take a view on that over a period of time. There’s always going to be times where generic prices have gone up and times when they come down. For me, it’s taking a balanced view across a period of time.

“Certainly at the moment, because of the pharmacy cuts, there’s no doubt about it, our members’ number one concern is the amount of remuneration they are receiving, particularly how that is so unpredictable. That is the part that is keeping our members awake at night at the moment.”

What has been difficult for pharmacies – exasperating may be a better way to put it – has been the DHSC’s late announcement of concessionary prices each month.

“The whole issue of concessionary pricing is tough. One of the things where we’ve been able to help members is we work very closely with pharmacists who’ve introduced a new facility on to their system which enables them, with approval, pharmacists to supply data to the PSNC,” he says.

“That alone has meant that volume of data that the PSNC is receiving has gone up exponentially. That flow of information is certainly helping the PSNC in terms of lobbying for concessions. Speaking to pharmacists on a daily basis, it is a big area of concern.”

Jeremy suggests “logically there has to be another way of” approaching concessionary pricing and says there is “a genuine desire across the industry” for a review of the system. The message; just don’t hold your breath.

“The problem is at the moment, there are so many critical issues taking up time. There’s so much legislation going through relating to Brexit, there’s so much uncertainty still over that and that, as well as FMD (Falsified Medicines Directive), is in people’s minds. There’s so many priorities. I’m sure there’s a lot of lobbying going on to try and correct this.”

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