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How proposed community pharmacy funding cuts will affect my business and my patients

I find it impossible to reconcile the government’s stated desire to put pharmacy at the heart of the NHS (as stated in its open letter to the Pharmaceutical Services Negotiating Commitee on 17 December 2015) with the suggestion that up to 3,000 pharmacies will close. Worse still is the suggestion that closures will be driven by indiscriminate financial attrition (i.e. the market) rather than in any planned way.

Better use of community pharmacies is an obvious way to relieve pressure on GPs and accident and emergency services. We could do so much more, but not if these plans are implemented.

The letter advocates a more clinical pharmacy service. We have been saying this for years and have proposed changes that would deliver it, yet the government refuses to invest accordingly. For example, a common ailments service provided by community pharmacies in England could save 57 million GP appointments per year, save the NHS more than £1bn and reduce prescription volumes, especially antibiotics.

The letter claims that funding reductions can be imposed without compromising the quality of services but no evidence has been given. The risk is that excellent local pharmacies providing high quality services will go to the wall because they cannot absorb these cuts.

The minimum margin for any business to be sustainable is 6% net. Since the government intends to reduce my net profit by 6%, it must be assuming that I am currently making at least 12%. However, I have never made a 12% net profit in the 30 years I have been in business. Like most of my colleagues in independent pharmacy, my net profit (without me taking a penny out of the business) is 2–3%. A 6% reduction in profitability will inevitably put me into loss.

Although it is true that, in some areas, there are several pharmacies clustered, it is equally true (for example, in Letchworth) that there are clusters of GP surgeries. This does not inherently indicate inefficiency or over-provision, it can simply indicate high demand. The government appears not to have even considered this.

My pharmacy in Letchworth (which has won numerous local and national awards) is in competition with several other pharmacies. I have made massive investments in infrastructure, IT, staff, training and marketing, and I have built this business over 15 years of continual investment. Should my pharmacy now be penalised simply because it is competing with others? If, following years of financial attrition, only one pharmacy is left in places like Letchworth, will the consequential lack of competition produce complacency rather than a better service? There are several GP surgeries in close proximity in Letchworth. There is no suggestion that any of these should close, so why is the government set on forcing pharmacy closures?

The idea of ‘hub-and-spoke’ dispensing services has been mooted, but is the government really seeking ‘warehouse dispensing’? If so, this is shortsighted and carries risks. The millions of face-to-face interactions between community pharmacy teams and patients that happen every day are a vital part of the dispensing service. We ensure that people use their medicines properly and spot health issues that require further intervention. We reduce wasted medicines, and keep patients safe and well. Warehouse dispensing can do none of that.

We already collect prescriptions from local surgeries and deliver them to patients the same day. We dispense them into dosette boxes when necessary. We are a lifeline for elderly and confused people and for many with dementia. Warehouse dispensing cannot match that.

The government has extended the consultation period to 24 May 2016. But if it does not change its plans, it simply means that I have less time to plan for any cuts when they do come. Today my ability to make decisions about investment in staff, services and premises is blighted by uncertainty. I have hardly slept since 17 December 2015 because I am so worried. This is dreadful for me and my staff, but also for my patients, especially the hundreds of elderly vulnerable people who rely on us.

I find myself facing closure and bankruptcy or, at best, I will have to sell the business to one of the large chains and extricate myself as best I can. It seems the government does not realise that, if it destroys those at the leading edge of the profession, who have made massive investments in the more clinical future that it says it wants, patients will inevitably end up with a worse service.

The government’s plans appear ill-thought out and devoid of evidence. I implore those at Whitehall to think again. Do not destroy the one part of the NHS that is working well and has the potential to deliver so much more.

I urge readers to support the online petition against these cuts: https://petition.parliament.uk/petitions/116943. If we achieve 100,000 signatures in the near future we will be granted a parliamentary debate.

Graham Phillips

Superintendent pharmacist

Manor Pharmacy Group

 

 

Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2016.20200997

Readers' comments (2)

  • Graham, if your net margin is, as claimed, 2-3% then there is something very wrong with your business - and it is not NHS remuneration.

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  • I think what's "wrong" with Graham's pharmacy is that he is trying to provide an excellent service for his patients, with adequate levels of staff from good quality premises.

    We are in a similar position - in fact 2% net profit would be an improvement for us.

    It's impossible to make any sensible plans when we have no idea how this reduction will be applied.

    It's time quality received some financial recognition.

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