Pharmacy Reimagined

Pharmacy Landscape

The last 2 years has seen a radical remodelling of the community pharmacy landscape.

At the end of November 2024 there were just 10,044 community pharmacies (excluding distance selling pharmacies) in England, down 229 since the start of 2024, an average of 5 closures per week this year. This is 797 fewer since January 2021, and 1905 less than in 2015 when there were 11,949. In 2015, pharmacies dispensed on average 6230 prescription items per month, in 2024 this has increased to an average of 9230 items, albeit somewhat skewed by Pharmacy2U, Lloyds Direct and other online pharmacies, plus an increase in workload associated with service provision. (sources NHS BSA).

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 in November 2023.

There has been confirmation from Boots UK that it has now closed 581 of its stores as part of its transformation and cost management programme with more to follow. Tesco has stated that it would close a number of its pharmacies and Rowlands have disposed of 37 pharmacies to reduce their losses from £271 million to £38 million in 2023. A family-owned group in the North of England, Whitworth Chemists, has been put up for sale as individual pharmacies following a reported loss. Other groups, including Well, Paydens, Cohens, Kamsons, Peak, Jhoots and Weldricks, and many independents have also reported significant losses. One in six of the remaining pharmacies say that they are at risk of closure in the next twelve months unless funding is resolved.

According to a recent Healthwatch report, there were 48,000 hours of pharmacy services lost in England due to temporary unplanned closures in 2023, the equivalent of 5,800 days. All this is all impacting the provision of pharmaceutical care in rural and deprived communities in particular.

These outcomes are largely due to the significantly under-funded NHS contractual framework which in real terms is down 40% on 2015 against rising operating costs. Then there is the unjust reimbursement system which sees pharmacies frequently dispensing medicines for their patients at a loss coupled with a challenging supply chain resulting in many wasted hours sourcing medicines.

The overall result is a significant shift in the distribution of pharmacy ownership since January 2021. The largest sector is now the small independents owning between 1-5 pharmacies with 4901 which is 49% of the market and 877 more pharmacies than in January 2021. Medium groups owning 6-99 pharmacies now have 1826 (18% market share), up 233 on January 2021. Larger groups, owning 100+ pharmacies, now have 3317 (33% market share) which is 1903 less than in January 2021.

One potential benefit is that the independent sector can be more agile and make the required decisions more quickly. Their challenge is that some may not have the capacity or capability to plan and implement the necessary strategies to survive.

The current contractual framework is not fit for purpose and urgently requires a complete overhaul as part of the stalled 2024/25 negotiations. Community Pharmacy England (CPE) must deliver a successful outcome for contractors who have funded a substantial increase in their revenue to strengthen their negotiating team and enhance their lobbying activity following the Wright Review and the Transforming Pharmacy Representation Programme. The change in ownership balance should also be reflected in the constitution of the CPE committee if good governance is to be demonstrated.

The election of the new Labour government in July 2024 may give some hope, but we have heard yet more rhetoric and not seen any action. There is ambition for a shift from cure to prevention and yet the Healthy Living Pharmacy initiative, part of the essential services in England, remains largely underutilised and unfunded. The election, spending review and budget have caused further delays in negotiations and hence may be too late for some pharmacies.

Another impact of this shift in ownership 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.

The acquisition of LloydsDirect by Pharmacy 2U will create an organisation with a combined monthly NHS items now exceeding 3 million representing about 55% of the distance selling pharmacy (DSP) market. In November 2024 there were 410 DSPs, up 10 on on January 2024 and up 41 on January 2021, but many dispensing few prescriptions. DSPs still represent a relatively small percentage of total items dispensed, around 6%, and their rate of growth has slowed since the pandemic but still growing. ASDA have recently announced an arrangement to use Pharmacy2U for its home delivery service – another indication of the change in consumer behaviours and the need to cut operational costs.

Community-based pharmacy still has a very important role in the safe supply of medicines and patient-facing care which must be retained and valued as an integral part of a range of pharmaceutical care and wider health services.

Pharmacy Integration

The recent review of the NHS by Lord Darzi highlights community pharmacy as part of the solution to repair a broken NHS with a shift of healthcare out of hospital into the community and a stronger focus on prevention (Healthy Living Pharmacy). However, the core funding must be fixed first before new or extended services are introduced. We also need to see better alignment of primary care contracts, e.g. GMS and CPCF.

The devolution of contractual arrangements and health budgets to Integrated Care Boards (ICBs) means that good local relationships between Local Pharmaceutical Committees (LPCs) and Regional NHS teams and ICBs, and between pharmacy contractors and Primary Care Networks (PCNs) and local GP practices are critical. However, the shift in levy funding to CPE has meant that there is a reduced capacity in many LPCs to achieve the required local engagement, influencing and support. It is good to see that the NHS have given ICBs some funding (albeit not enough) to support the role of a Community Pharmacy lead for each PCN area. This role requires effective leadership, communication and influencing skills.

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 updates of the Blood Pressure Check and Contraception services plus the Pharmacy First clinical pathway service are an opportunity to demonstrate this but require support from GPs and an effective NHS driven public awareness campaign. In addition to enhancing credibility across the NHS and community populations, delivering these services should provide much needed and slightly more profitable revenue. However, we should acknowledge that the fees for these services do not reflect the workload involved and value they bring to patients and the health system.

The APPG inquiry into community pharmacy highlighted many of the challenges and opportunities that the sector faces and the actions a government must take to fully recognise and utilise it as part of an integrated health system. The political rhetoric needs to be converted into positive actions and outcomes.

Pharmacy Remodelled

The Kings Fund and Nuffield Trust were commissioned by Community Pharmacy England to write a ‘new vision’ for the sector: Pharmacies of Tomorrow, with evolution continuing to underpin the theme. Change by its nature is disruptive, but evolution is too slow and so often we have seen it only delivering more of the same. Whilst some contractors may struggle with the speed of change, the sector cannot wait another 12-24 months if it is to survive, it needs revolution and action now.

This vision is very similar, but less ambitious, to the Pharmacy Voice Forward View Blueprint published in 2016. Unfortunately this was never adopted and the single influencing voice was subsequently derailed by some individual and organisational egos. Then we had the judicial reviews which destroyed trust and relationships with the NHS, the then Department of Health, and Government resulting in many lost years of potential progress.

We have also seen various visions and campaigns from the CCA, NPA, IPA and the RPS. Whilst generally credible in their own right, they lack cohesiveness and any detailed plan as to how tangible outcomes will be achieved. Many would question why we need so many visions when a single vision, plan and a combined voice could unite the sector and move it forward together? All pharmacy contractors have more in common than differentiates them; that common priority is for a new contractual framework with fair remuneration and reimbursement.  The current status simply allows the NHS and DHSC to continue to divide and conquer.

#OneContract #OneVision #OnePlan #OneVoice

Supplying medicines alone is not a sustainable model for pharmacy in the community. Why would anyone seek increased prescription volume to then lose more money? Like our colleagues in optometry and dentistry, pharmacies can no longer be dependent on the NHS for a viable future. Whilst embracing the full range of NHS services, pharmacies must also develop the non-NHS part of their income including self-care support, OTC treatment and private services. A number are already adopting this hybrid model successfully with greater leverage of P-medicines, Patient Group Directions and Independent Prescribing within a broad range of private clinical services. A few have gone further and are completely private in their service provision without the administrative burden and loss-making consequences of an NHS contract.

We are seeing a radical change in what some community pharmacies look like and do. Many of these have enhanced their premises with a greater emphasis on a healthcare ethos and environment with multiple clinical consultation rooms. They have created and shared a new vision for their pharmacy with their team and developed their skill-mix with an increased role for Pharmacy Technicians. They utilise digital and hardware technologies to improve efficiency, release capacity and support smart communication and marketing. All of this to deliver more clinical services, self-care and a better patient experience which in turn should create a more sustainable business.

Those who are agile and adapt to reflect the evolving needs of communities, consumers and commissioners of our services should operate successfully as pharmacies of tomorrow. Those who wait for someone else to do it for them may not.