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Pharmacy market still showing resilience despite cuts

Following the High Court’s ruling on 18 May 2017 rejecting the case made against the government’s funding cuts to community pharmacy in England, many may be left wondering what the future holds for the community pharmacy market.

I can say from our own transactional evidence that sales activity not only remains buoyant, but has increased through the period of the funding cuts uncertainty.

Our most recent figures show that, from October 2016 to May 2017, there was a 64% increase in sales that exchanged or completed in England when compared with the same period a year previously. This comes on the back of the fact that, as part of Christie & Co’s annual price indices, pharmacy prices were recorded to have risen on average by 12% across the UK in 2016.

Largely fuelling this rise in activity is the increase in first-time buyers who have come to us enquiring about getting a foot on the property ladder and owning their own pharmacy. These have mainly been locums and pharmacy managers who are anticipating the squeeze on their current positions, as pharmacy owners seek to mitigate the cuts through efficiency savings such as cutting staff hours and rates.

With many purchasers and lenders still viewing the market with long-term confidence, the pharmacy sector can at least now look ahead with certainty that the funding cuts are here to stay. This has been echoed by existing operators at a series of regional events and conferences that we have either hosted or attended in recent weeks, with many operators now keen to move forward through investment into their business or additional acquisitions.

Although I clearly acknowledge that the impact of the funding cuts will be felt by pharmacies throughout England, hopefully some consolation can be taken from the fact that the appetite in the marketplace has persisted and the sector continues to show its renowned resilience.

Tony Evans

Head of Pharmacy

Christie & Co

Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2017.20202884

Readers' comments (2)

  • I hope your readers realize that the last people to report the price of goodwill in pharmacies has gone down and hence it may not be a good time to buy or sell a community pharmacy are the transfer agents such as Tony Evans and Christies (thoughts of turkeys and Christmas come to mind)
    With such a massive cut in fees , large increases in business rates, and increases in other overheads profits over this and subsequent years must surely depress values otherwise we will see lots of new owners going bankrupt by the end of the decade because their profits may not be enough to service their debts. I remember those problems when we,pharmacy contractors, went through similar cut back in the second half of the last century when several small groups were hellbent on growing their branch numbers but which over the next decade saw them sell up under pressure from their lenders!!!!!!

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  • With the greatest of respect to the author of this 'letter' and the PJ editorial team, I would suggest this piece is actually an advert of sorts and it may be appropriate to remove it from the site of a professional journal.

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  • Many thanks for your feedback. PJ made the decision to publish this letter based on the fact that Christie & Co provides valuable insight into the current pharmacy sales market in the wake of Brexit, a topic we think is of great interest to our independent pharmacist readers in particular. We believe the letter says clearly that it is the company’s own analysis and opinion and not that of the wider market. We would welcome comment from anyone who may disagree with the analysis put forward.

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