Pharmacy Reimagined

Pharmacy Landscape

We continue to witness a radical remodelling of the pharmacy landscape. With reductions in the numbers of pharmacies, a shift in the balance of ownership, the publishing of the independent economic review, the contractual framework announcement for 2025/26 and the positive vote to move the Royal Pharmaceutical Society to a Royal College of Pharmacy; there’s a lot going on and much work to be done for everyone owning, working in and working with community pharmacy. The funding announcement, whilst welcomed, falls a long way short of what is required to sustain the sector.

At the end of March 2025 there were just 9,999 community pharmacies (excludes the 408 distance selling pharmacies), down 274 since the start of 2024, an average of almost 5 closures per week in the last 12 months. This is 838 fewer than in January 2021, and down 1,950 from 2015 numbers when there were 11,949. (sources NHS BSA)

Worth noting that in 2005, before the control of entry was temporarily opened up to a number of exemptions by the then government, there were a total of 9,736. Interesting that the current control of entry system, often based on outdated PNAs or lack of local vision about broader access to primary care services, appears to be preventing NHS contracted pharmacies opening in areas which are now deprived of pharmaceutical care services.

The combination of closures or disposals of the LloydsPharmacy group, Boots, Tesco, Well, Rowlands and Morrisons over the last 2 years had a significant impact on this. The planned acquisition of Wallgreens Boots Alliance by US private equity firm Sycamore Partners may further impact the total numbers and balance of ownership if they follow the Aurelius-LloydsPharmacy path to any extent.

Independents have by no means escaped despite their growth in market share. A family-owned group in the North of England, Whitworth Chemists, was put up for sale as individual pharmacies following a reported loss. Other independent groups including Paydens, Cohens, Kamsons, Peak, Jhoots and Weldricks, and many small independents have also reported significant losses. Many owners have openly declared that they have had cash-flow issues paying suppliers and had to put funds from private savings, pension funds or even remortgage their home to keep their business afloat. One in six of the remaining pharmacies say that they are at risk of closure in the next twelve months unless funding is resolved appropriately. The economic review highlighted that 78% of pharmacies were at risk of closure in the short-term resulting in a significant impact on NHS primary care services.

The overall result is a seismic shift in the distribution of pharmacy ownership since January 2021. The largest sector is now the small independents owning between 1-5 pharmacies with 4,910 which is 49% of the market and 886 more pharmacies than on 1st January 2021. Medium groups owning 6-99 pharmacies now have 1,807 (18% market share), up 214 since the start of 2021. Larger groups, owning 100+ pharmacies, now have 3,282 (33% market share) which is 1,938 down on the beginning of 2021.

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 under-funded NHS contractual framework which in 2024/25 was down 40% in real terms on 2015 against rising operating costs. Then there is the unjust and non-transparent 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 government has pledged to sort this out so that dispensing at a loss is no longer a thing in 2026.

We have seen what the government and CPE call the ‘first steps’ to improve core funding. The announcement on the outcomes of negotiations for 2024/25 and 2025/26 are a positive move, but fall a long way short of the findings of the Independent Economic Review and will not fix the critical cash-flow problems that many contractors are suffering. It will need more steps and quickly to create the urgently needed sustainable operating environment.

Even with the 19p increase in the Single Activity (dispensing) Fee now at £1.46, and predicted income including retained margin per prescription item at £2.29 for an average pharmacy dispensing 8000 items per month, the dispensing of medicines is still a marginal or loss-leading service. So much will be dependent on sorting out the reimbursement issues and supply chain challenges.

This leaves limited wiggle room to consider funding Spoke-Hub-Spoke services (due to be enabled this year) to release capacity in community pharmacies unless that time is fully realisable and is used to drive new profitable revenue streams. There would also be one-off stock investment benefits.

There is  government ambition to reform the NHS with the re-merger of NHS England and DHSC. Let us hope that we do not see a loss of good people, organisational memory of good practice and internalisation of focus for several months or years. The government want a shift from hospital to community and cure to prevention and yet no united vision or plan for community pharmacy and the Healthy Living Pharmacy initiative, part of the essential services in England, remains largely underutilised and unfunded.

The contractual framework remains unfit for purpose and urgently requires a complete overhaul as part of future negotiations on funding and reimbursement. We also need to see better alignment of primary care contracts, e.g., GMS and CPCF.

Community-based pharmacy still has a very important role in the safe supply and use 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

There is a risk that the government’s plans to ‘abolish’ NHS England and remerge with DHSC will take some time to happen and be a potential distraction from progress while the deckchairs are reassembled. Further devolution of contractual arrangements and health budgets means that good relationships between Local Pharmaceutical Committees (LPCs) and Regional and local NHS teams, whatever that may come to look like, are key. The danger is that relationships will be broken in the restructure and have to be rebuilt, that takes time and opportunity. Collaboration based on effective engagement and understanding is also important between pharmacy contractors and Primary Care Networks/Neighbourhood teams and local GP practices is also critical.

Community pharmacy must optimise all of the national and any locally commissioned services by delivering consistently high-quality outcomes and patient experience within an integrated health system. The updates of the Pharmacy First,  Blood Pressure Check and Contraception services are an opportunity to demonstrate this but requires better digital integration, referral support from GPs and an effective NHS driven public awareness campaign. Delivering these services should provide much needed and hopefully more profitable revenue given the improved fees announced.

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 and the need for operational innovation, the sector cannot wait another 12-24 months if it is to survive, it needs revolution and action now.

We have also seen various visions and campaigns from the CCA, NPA, IPA and Numark.  Whilst generally credible in their own right, they lack cohesiveness and any detailed plan as to how tangible outcomes will be achieved. Now we have the IPCN co-operative claiming independent pharmacy representation. Many would question why we need so many visions and representative groups when surely a single vision, plan and a combined voice would unite the sector and influence government better? All pharmacy contractors have more in common than differentiates them; that common priority is for an NHS contractual framework with fair remuneration and reimbursement.  The current divergent lobbying 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. However, some have seen over a 10% increase in prescription items due to local closures. 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 greater utilisation of independent prescribing and an enhanced 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 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 be able to drive their pharmacy forward for a sustainable future. Those who wait for someone else to do it for them may not. This is a tipping point for the sector.