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English Pharmacy – Hope For The Future

Written by Adele West-Curran COO & CCO - RWA Pharmacy
Adele West-Curran
Pharmacists smiling on iPad

As COO of a business intelligence solution catering to Community Pharmacy in England, I examine a lot of pharmacy data from all across the country. As a result, my interpretation and understanding of the industry differ slightly from others.

Like many of you, I have read numerous articles proclaiming doom and gloom for the industry. While there is no denying the challenges we face, I've noticed an unprecedented level of positive media attention across the industry throughout 2024. Strong voices from pharmacy associations all over the nation are raising awareness about the difficulties that community pharmacies are experiencing. 

The challenges faced by pharmacies are significant, but after another year of analysing pharmacy data, I have reasons to feel optimistic. I meet with many customers who are confronting these challenges head-on. They are becoming data-driven and are focusing on opportunities for improvement. Many are also investing in pharmacy business intelligence solutions to ease the workload of their dedicated staff. 

Recognising that adapting and fully utilising pharmacy analytics will soon become imperative, rather than optional, is essential. There are many reasons why we need to adapt now more than ever before. 

Here are some facts about English pharmacies in 2024 that help explain this:

   

Number of contracts down

10,776 (31st Dec 2023) vs 10,554 (1st Nov 2024)

Number of closures

268

Number of consolidations

62

Numbers of Divesting Sales

334

Numbers of Retirement Sales

101

Number of Contract changes

57

Let’s examine each of these areas in greater detail:

 

Lower Contracts / Increased Closures 

A reduction in the number of contracts means pharmacies are facing a higher volume of patients and, consequently, an increase in dispensing item volumes. While new opportunities arise, they also bring new challenges.

We are aware that dispensing margins are declining, which puts pressure on pharmacies to provide more services to compensate for this loss. Staff members in pharmacies are under strain to deliver these services while managing the dispensing of medicines.

Pharmacy owners and managers face challenges such as rising wage costs on one side and employee burnout on the other. Data indicates a typical 3% drop in dispensing margins over the last 24 months. With less dispensing margin available, everyone is trying to do more with less.

If a pharmacy finds areas where it loses money, it can improve its processes. By understanding its pharmacy analytics better, it may recover some of its losses.

 

Consolidations

There have been many high-profile consolidations in recent years. One notable example is Lloyds, which sold off many branches in 2023. Some of these branches were subsequently closed and merged into existing contracts, allowing investment in one branch rather than two. This consolidation has also resulted in a doubling of the patient and prescription volume at those remaining pharmacies.

The positive aspect is that many pharmacies are responding to these challenges in innovative ways. To mitigate these pressures, numerous pharmacy chains have adapted and implemented forward-thinking technologies such as hub dispensing and robotics. Tools like these not only save time but also enhance efficiency, reduce errors, translate pharmacy data and improve stock management. While the initial investment may be significant, the potential rewards are equally substantial.

 

Divesting & Retirement Sales

Beyond the sale of the Lloyds branches, we have witnessed significant sales among some of the larger chains. Access to pharmacy data and insights regarding local demographics, condition diversities, prescribing trends, margin vulnerabilities, and other relevant aspects have likely influenced the decisions made by these larger group owners. This shift is paving the way for new players in the market.

New pharmacy owners are establishing their businesses in a fundamentally different environment than their predecessors. They understand the demands placed on community pharmacies and the realities of delivering quality care, leading them to adopt different approaches. The NHS must support this new generation of pharmacy owners so that they can thrive and successfully maintain their businesses while delivering high-quality patient care. The risks of burnout and bankruptcy are real threats facing all owners.

 

Contract changes

The number of contract changes throughout 2024 has been substantial. Although this may be currently under the radar, it serves as an early indication that pharmacy owners cannot afford to keep their pharmacies open. Many are transitioning to shorter-hour contracts as a strategy to manage overhead costs and wages.

Community pharmacies play a vital role in England. They provide a diverse range of services and manage patient care to an exceptional standard. However, the reality of operating a profit-making business continues to be a significant challenge for them. Despite this, an increasing number of pharmacies are adapting well to change.

They are shifting to new technologies and systems, including dispensing robots and pharmacy analytics. These changes help their businesses run efficiently and smoothly by providing actionable insights that lead to greater operational success. The volume of pharmacy data and information available within the pharmacy industry has never been greater, enabling data-driven decision-making and consistent results.

Witnessing this progress with our customers makes me feel incredibly optimistic about the future. If you require assistance in streamlining your pharmacy data and automating operations, contact our team to discover how our pharmacy business intelligence solutions can help future-proof your business.

Contact RWA Pharmacy

Interested to learn more?

Contact RWA Pharmacy

Interested to learn more?