The last 12 months has seen a radical remodelling of the community pharmacy landscape. At the beginning of 2023, the Hallo Healthcare Group, the organisation established by private equity company Aurelius following its acquisition of McKesson UK in April 2022, announced the closure of Lloyds Pharmacies in Sainsburys. Since then, it has either closed or sold off the remainder of the group completing their exit from the market this November.
There have also been announcements from Boots UK that it would close 300 of its stores, Tesco that it would close 10 of its pharmacies, and Rowlands has set out its ‘close, merge and dispose’ strategy in addition to acquiring 30 of the ex-Lloyds pharmacies in Scotland. A large family-owned group in the North of England, Whitworth Chemists, has now been put up for sale.
These decisions and actions were largely taken on the back of operating losses across the sector due to the still under-funded NHS contractual framework, which urgently needs a complete overhaul, and the general economic climate.
Most of the disposals have gone to entrepreneurial independent owners and small to medium sized groups. The result is that there were 10,307 community pharmacies in England in October 2023, a loss of 531 since January 2021, and 1,340 less than March 2015 when there were 11,647.
This has meant a significant shift in the number and distribution of pharmacy ownership within the different sized groups (excluding distance selling pharmacies) since January 2021. The result is that by far the largest sector is now the small independents owning between 1-5 pharmacies. One benefit is that they can be more dynamic and make the required decisions more quickly; their challenge is that they may not have the capacity to plan and implement the necessary changes.
Another impact of this shift is that those organisations, suppliers and manufacturers that interface with community pharmacies will have to focus their attention and support on an increased number of contact points.
A challenge and opportunity for community pharmacy is to become further embedded as an indispensable part of the local health system. The devolution of contractual arrangements and health budgets to Integrated Care Boards (ICBs) means that local relationships between Local Pharmaceutical Committees (LPCs) and ICBs, and between pharmacy contractors and Primary Care Networks (PCNs) are critical.
Community pharmacy must optimise all of the national and any locally commissioned services by delivering consistently high-quality outcomes and patient experience as part of an integrated health and care system. The recently announced updates of the Blood Pressure Check and Contraception services plus the new Pharmacy First clinical pathway service are an opportunity to demonstrate this. In addition to enhancing credibility across the NHS and community populations, delivering these services should provide much needed and more profitable revenue.
The Kings Fund and Nuffield Trust were commissioned by Community Pharmacy England to write a ‘new vision’ for the sector: Pharmacies of Tomorrow. Evolution continues to underpin the theme; however, whilst some contractors may struggle with the speed of change, the sector cannot wait another 12-24 months if it is to survive.
Change by its nature is disruptive, however what is needed now is not evolution, but revolution. Evolution is too slow and so often we have seen it delivering more of the same. Indeed, this latest vision is very similar to the Pharmacy Voice Forward View blueprint published in 2016 but never adopted. It is why, when we designed the Health Living Pharmacy (HLP) model back in 2009, we based it on organisational development, leadership of change in culture, capability and practice and greater integration. Whilst HLP is now an integral part of Essential Services, some of the aims and ambitions have been lost in translation for many pharmacy owners and organisations.
We have also seen strategies published by the Company Chemists’ Association, the National Pharmacy Association, and the Royal Pharmaceutical Society. Mainly credible in their own right, but many would question why we need four strategies when a single vision with an implementation plan could unite the sector and move it forward together?
The market share of Distance selling pharmacies (DSPs) continues to grow and the acquisition of LloydsDirect by Pharmacy 2U will create an organisation with combined monthly NHS items exceeding 2.7 million. In October 2023 there were 400 DSPs, up 31 on January 2021. It is difficult to access accurate data for all DSPs, however, they still represent a relatively small percentage of total items dispensed, probably around 5%. Hence community pharmacy still has a very important role in the safe supply of medicines which must be retained and valued as part of a range of health services.
Transacting medicines alone is no longer a differentiator nor a sustainable model for pharmacy in the community. Our colleagues in optometry and dentistry are witnessing a déjà vu moment and, like them, pharmacies can no longer be dependent on the NHS for a sustainable future. They must also develop the non-NHS part of their income including self-care support and treatment, and private services. A number are already doing this successfully with greater leverage of P-medicines, Patient Group Directions and Independent Prescribing from pharmacists and other health professionals together with a broad range of private clinical services.
We are already seeing a radical change in what some community pharmacies look like and do. Many of these are independents who are utilising digital and hardware technologies to improve efficiency, release capacity, deliver services and support smart communication and marketing. Those who are agile and adapt to reflect the needs of commissioners and consumers of our services should operate successfully as health providers. Those who wait for someone else to do it for them may not.