An economic report by Ernst and Young (EY) found that up to eighty-five per cent of community pharmacies in England will have a financial shortfall by 2024, which equates to a total of nearly five-hundred million pounds across the sector if the existing funding arrangements continue.
The report, which was based on data from one hundred and five community pharmacies and commissioned by the National Pharmacy Association (NPA), claimed that persistent shortfalls of this scale could lead to insufficient cash for companies to continue trading.
“An economic report by Ernst and Young (EY) found that up to eighty-five per cent of community pharmacies in England will have a financial shortfall by 2024.“
Currently, there is a financial shortfall between twenty-eight per cent and thirty-eight per cent in the community pharmacy network, with fifty-two per cent of owners preparing to sell their businesses. However, in four years, EY predicts that between sixty-four per cent and eighty-five per cent of the network will be in financial debt when the five-year community pharmacy contract ends.
The report stated: “Our base case projection was the average pharmacy premise making a forty-three thousand pounds deficit by 2024. This is an estimated average fall of sixty-eight thousand, two-hundred and seventy-two pounds per pharmacy between 2019 and 2024. Across all projections average financial performance projections for 2024 range from four-thousand pounds surplus to ninety-one thousand pounds deficit, with sixty-four per cent – eighty-five per cent of the network in deficit.”
Chair of the NPA, Andrew Lane, stated: “Community pharmacies act as a vital lifeline in communities across the land and there’s a very real threat they could close unless ministers act now. Health secretary Matt Hancock describes community pharmacy as a critical part of the NHS family. He has also said that, if the government asks pharmacies to offer more services, they need to be paid properly for those services. Those words urgently need to be backed by further investment to underpin viability, change and improvement in our sector.”
Chief Executive of the Pharmaceutical Services Negotiating Committee (PSNC), Simon Dukes, stated: “We know that contractors are failing to cover the costs of their capital and replace worn-out assets, others are taking short term measures, such as reducing services to patients and charging for services - and we are seeing increasing mergers and branch closures in the larger chains. The position of the NHS as a monopsony purchaser is dangerous for community pharmacy - the sector has been feeling the consequences of only having one customer for the past decade. We also agree that community pharmacies are in an incredibly difficult financial situation now, with many of them already making a loss and the situation set to worsen in the next few years.”See all the latest jobs in Consumer