Opinion: Crying wolf about the elephant in the room...

Yes, I know, heretical thoughts. I feel guilty for thinking this, never mind typing it. As far back as I can remember — multiple decades — pharmacy owners have always complained about their funding from the Government. 

Pharmacy organisations point, repeatedly, to record numbers of pharmacy closures. What they fail to mention is the record number of openings prior to the peak of 11,949 pharmacies in 2015.  

So let’s look a little further back. In 2005 there were 9,872 pharmacies and a population of around 51 million in England: in other words, one pharmacy per 5,166 people. The global sum then was £1.766 billion, providing a theoretical average sum per pharmacy of £178,889. Yet I don’t recall pharmacy bodies today demanding we open more pharmacies. Far from it.

Thanks to changes to control of entry in 2005, pharmacy numbers accelerated towards the 2015 peak when the global sum was £2.8 billion – an average of £234,329 per pharmacy and one pharmacy for every 4,602 people.

Correction or crunch?

Now the global sum is £2.592 billion and there are around 10,636 pharmacies (last time I counted) – that’s one pharmacy for 5,453 people and an average of £243,700 per pharmacy. 

On the face of it, therefore, historically speaking, we have a global sum that has grown since 2005 and reducing numbers of pharmacies, meaning a theoretical improved average income per pharmacy and a relatively small change in the average number of people served per pharmacy. So is this an overdue market correction 20 years on? Or is it really crunch time? 

There is no doubt that in real terms pharmacy income has fallen significantly – 40 per cent over the last decade – and costs are up. But given the constant messaging for many years, I honestly don’t know what this means for the bottom line for the average pharmacy. Some must still be making a profit, so what is the magic formula?

The elephant in the room remains goodwill values. While pharmacies are still attractive business propositions and banks are still lending to them, what message does this send to the Government? 

I’m not sure what the answer is, or what the end game will be, but I do know that our negotiating antecedents haven’t done us any favours during what we might now consider were the boom times.

On a lighter note, I read a while back that the Association of Independent Multiple Pharmacies (AIMp) has changed its name to the Independent Pharmacies Association (IPA) and generously opened its doors to all independents. Does that sound like any other body we know? What a time for a turf war. Light beer anyone? 

* Written by a practising pharmacist