Worst thing for sector would be 3,000 pharmacies not closing

"If pharmacies don't close en masse, an emboldened government will cut funding further"
Some pharmacy closures are a necessary price to prevent further cuts, argues the Area Manager

Like most people in the sector, I have been following with great interest the press coverage of the legal challenges to the funding cuts. At this point, I must point out that I am not the mysterious industry insider who appears to have given so much ammunition to a Department of Health keen to make savings.

As an area manager for an opinion-polarising multiple, I find it easy to be unpopular among some community pharmacists as it is – despite my best intentions.

So I found myself wondering, what is the worst-case scenario of the potential outcomes that are being predicted? Is it really 3,000 pharmacies closing? Or is it really only 1,000 pharmacies being left open, as some are saying?

No, the worst thing for the sector, in my opinion, would be 3,000 pharmacies not closing. And this is what I fear might actually happen.

Before you recoil in horror from that statement, allow me to explain.

I just can’t see business owners, who have made big investments in their pharmacies over the years, just deciding to throw in their towel and close. The demand for pharmacy ownership seems to remain strong, as evidenced by high sale prices. Therefore, some owners may sell or retire.

But close? I suspect not. Worst-case scenario: the Mercedes dealership might have to wait another year before the car is renewed, or locum rates may have to drop again. What I hope we see overall is the diversification of these pharmacies into additional activities and services. I don’t think that’s a bad thing, if done in a professional way.

And if, after all this noise from the sector, pharmacies don’t start to close en masse, then an emboldened government will see an opportunity to cut further and harder in the future. That could be the worst scenario the sector faces.

After absorbing the cuts, and contributing via the Pharmaceutical Services Negotiating Committee or the National Pharmacy Association to the funding of a costly legal challenge, the healthy profits still around will be seen as even more prime targets for the government.

The real dangers to the sector could come later, from crying wolf now. We may have to start supporting a few closures of the weak, in order to prevent even worse in the future for the many.

The Area Manager has worked for all of the large multiples

13 Comments

N O, Pharmaceutical Adviser

By the way, when are we getting any BREAKING NEWS on the case that made twitter @ #candd go crazy?? After the general elections ?? Then it will be a new government and may be we have to start all again and spend millions on these court cases/ campaigns !!!

Shaun Steren, Pharmaceutical Adviser

When a pharmacy closes the items don't disappear - they go to another pharmacy. The multiples are going to be left with fewer pharmacies dispensing a higher total number of items - an ideal situation for a vertically integrated corporate monopoly. So in effect the cuts are mutually beneficial for central government and vertically integrated corporate  monopolies - central government gets to cut spending / corporate monopoly gets to cut costs. It is the employees who will take the hit through unemployment, wage cuts and increased workloads. 

It is over for employee/locum pharmacists, even though many STILL don't seem to recognise the fact. The discussion around this has not only become redundant but also incredibly boring. However, with so many pharmacies (potentially) closing and with a so called drive for efficiency, why does control of entry still exist? Surely this is the time to open the market up to the best companies in the world with the leading technologies. The current mutiples are hopeless, they employ the most appalling middle management, have absolutely no intellectual/creative capital and have not innovated in any significant way.

It is time for genuinely dynamic companies with massive research and innovation budgets to be given entry. Those companies with incredible articifcal intelligence and logistics technology should be allowed to smash the current cartel to bits. The taxpayer has a right to value, so why is the government gifting cartel privilege to a market of such incompetent and wasteful corporate contractors? 

Lucky Ex-Locum, Superintendent Pharmacist

Message to C and D - Get Shaun writing some articles for you because the posts he makes are WAY better than the fart-gas we get from the likes of the Area Manager.

Chris Pharmacist, Community pharmacist

Agree regarding the tediousness of the plight of communtiy pharmacists (and I am one)...its a perfect storm of government fundng cuts, an increasingly ruthless approach by multiples to boost profitability and continued oversupply of pharmacists...£15/hour (and less) will happen...

 

...now is the time to re-train and look at other options but it isn't easy, I'm 40 years old, have worked in pharmacy for nearly 20 years, where else can I earn £60k?...there always has been an element of pessimism in the profession but the outlook really does look dire...anyone else agree? No point hoping for the profession to unite and fight what is happening, it will not happen...its time to make plans for something else.

Chris Locum, Locum pharmacist

What works  is on an individual's personal circumstances. I was planning ahead for this a few years back (reduce financial obligations pay off mortgage etc) when I tried to tell a few colleagues -  who said I was unduly negative in outlook...

Angela Channing, Community pharmacist

I did exactly the same Chris, paid the mortgage off, haven't bought a new car in a decade, started saving like mad, started shopping in aldi. Gone from Next to Matalan and charity shops!! Have been doing this for the last decade, as soon as the writing was on the wall with the multiples buying up everything and the explosion in schools of pharmacy, both I thought at the time going to push down wages.  I'm a bit older than you, but agree, it's hard to start again in your 40s. In my opinion community pharmacy as we knew it 20+ years ago is gone for ever. It's not a profession anymore, it's just a commercial enterprise for the big boys. And the government , any government don't mind as it keeps the costs down.    RIP community pharmacy.   I did consider the GP and IP route, but after reading on pharmacy-forum how they are deluged with applicants, decided not to bother. As soon as the GPs have to fund it themselves with 100s of applicants, you won't make money there as they will keep you on band 7 as a trainee, then band 8a, 40k a yr again, as an IP, plus much higher insurance costs and much more responsibility for similar money. And you can bet the Unis are telling everyone that GP/IP is the way to go, so all the 3000 newly quals every year will be dying to get out of uni, do a diploma and then do the IP course. By 2020/22 you will have saturation there too, then where do you go ?    I remember reading a letter in the PJ about a decade ago, from a lady in a touristy town who decided to leave pharmacy and set up a cream-tea shope!  Apparently she made more money and had a much better quality of life !   Something to think about????   Get out totally?

David Hollowood, Community pharmacist

I would dispute the phrase 'opinion-polarising multiple' as it infers that there are significant numbers of people who approve of them.

Tony Schofield, Community pharmacist

 

 I see what he is getting at in that if we aren't hurt the DOH will keep coming back until we are. However this is written by one who really thinks that pharmacies are suffering a mere 4% and then 7.8% cut in fee income. As the JR demonstrated and those who actually get to see the NHS statement and write the cheques to pay wages etc know it is much higher than that. Over 20% for larger busier pharmacies doing ove 10000 items a month. This has nothing to do with postponing the new Mercedes and it's insulting for this chap to say that's the only consequence 

I have relatives in Scotland who have just got 100% funding for new robots from their DOH. They face the same demographic that we do ageing population etc. They have the same recruitment issues with doctors and nurses and have chosen to address it by investing in pharmacy. Our DOH has decided, and convinced the chancellor that this is not necessary. We don't need pharmacies when a pharmacist works in a surgery and virtual on line businesses can replace bricks and mortar.

In such a scenario it's not new cars we should be talking about. It's the headlong rush into a dangerous experiment that has no evidence base to support it.  Our area manager friend may well find difficulty in finding comfort in that as he'll have no-one to bully over MUR targets 

Lara White, Student

It's very easy for one to write off redundancies and reduced wages when it won't affect oneself. These are real people's livelihoods.

Martin Bennett, Community pharmacist

A proper compensation scheme is needed to encourage certain pharmacies to close. It often costs money to close - redundancies, lease obligations etc. It's totally unreasonable of the DH to try to force closures by financial attrition. 

Hadi Al-Bayati, Locum pharmacist

That's the answer. They would save in the long run and lots would retire tomorrow if they were offered an incentive. Pharmacy prices are dropping as people are happy to take a cut price to get out.

Wonder what would happen if the government started their own chain by buying some out. (Obviously this government wouldn't do that I'm aware)

Dave Downham, Manager

If members of staff are considered surplus to requirements, there is a consultation period and then redundancy of 1.5 weeks for every year's service. If this were to be replicated properly in these "hateful" clusters, would an equivalent incentive work. E.g., business operating for 20 years doing 6,500 items per month => 20 x 1.5x1,500 items per week x £1.24 per item = £56,000. Plus 20 x 1.5 x £400 to replace establishment fee = £12,000. Total of £68,000.

Would DH pay £68,000 to close a pharmacy? Just a thought...

Delectable Skeptic, Community pharmacist

Even a stopped clock...   ;-)

Yep.  Agree (although, not "The worst thing...headline).  There'll be a smallish number of closures but it'll be staff put under increasing stress and independent owner/managers staying back for a few hours after work to play catch-up. 

(I'll clarify that I'm not hoping for the pharmacies to close, just that 3000 won't and it'll be used as justification for further cuts)

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