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General Pharmaceutical Services in England 1999-2000 to 2008-09

Big pharmacies getting bigger

30% pharmacies dispensing less than 4,000 items per month

Dr Allan Tennant and Brian Austen reports

7th of December 2009

 

The NHS Information Centre published General Pharmaceutical Services in England 1999-2000 to 2008-09 last month.

 

The headline figures are:

  • there are now 184 more pharmacies this year.

  • There are 10,475 in total.

  • There were 771.5 million items dispensed by pharmacies, an increase of 45.7 million (6.3 per cent) .

  • 62 per cent of community pharmacies in England were owned by multiple contractors

  • 26,970 local enhanced services were provided by community pharmacy contractors in England in 2008-09 compared to 23,551 in 2007-08. The most frequent services provided in 2008-09 remain unchanged from 2007-08. These are Stop Smoking support, Supervised Administration, Minor Ailment Schemes and supply via Patient Group Directions.

  • A total of 1,397,319 Medicines Use Reviews (MUR) were conducted in 2008-09, compared to 951,358 in 2007-08, an increase of 445,961 (46.9 per cent). Costing approximately £39 million, for a service that is still to show real benefit to patients.

 

Drilling down through the data

Till 2005 the number of pharmacies in England had remained very stable around 9,750. since the new regulations there are now 625 more a 6.5% increase. However there has been a 24% increase in the number of items dispensed over the corresponding period.

 

In 2006/7 the average number of items dispensed per month by a pharmacy was 5658, it has now increased by 8% to 6,129. (over the same period the total items dispensed increased by 12%). However if the number of pharmacies had not increased since 2005, the average pharmacy would now be dispensing 6,600 items per month.

 

The number of pharmacies dispensing more than 10,000 items per month has increased by 36% to 1,302 and now accounts for 12% of all pharmacies. These high volume pharmacies are the area of highest growth and these pharmacies now dispense 27% of all items.

 

Two years ago 63% of pharmacies were dispensing 6,000 or less items per month, this figure is now 57% and I would expect a continued decline. In the last year these pharmacies average number of items per year was 45,400 or 3,780 items per month. However the pharmacies with 10,000+ items per month are on average doing 13,100 items per month.

 

Currently there are 704 pharmacies dispensing on average 1,213 items per month, only 155 pharmacies take part in the essential small pharmacy scheme. 30% of pharmacies are doing less than 4,000 items per month.

Assessing viability is difficult, but 4,000 items a month is a low volume.

 

The factors affecting profitability at low volumes are:

  • Independent or multiple-If the pharmacist is the owner and superintendent then it will be viable
    with less items

  • Opening hours, longer opening hours increases costs. A 100-hour pharmacy needs many more items before it breaks even.

  • The profitability and success of the retail element of the business. However pharmacy leaders repeatedly say that the income from retail is falling all the time.

So how does one explain the 3,113 pharmacies dispensing less than 4,000 items?

  • Inner city pharmacies with low volume of prescriptions but high foot fall for retail. London SHA has an average items per pharmacy per month of 4,510 for its 1,762 pharmacies; the next lowest average in South Central SHA with 6,048 and in the North east the average is the highest at 7,650.

  • Multiple and large independents running some pharmacies at a loss whilst the await to see the full outcome of the Pharmacy White Paper and the PNA legislation.

  • The essential small pharmacy scheme for a small number of pharmacies.

  • Supermarket and out of town pharmacies that are using the presence of the pharmacy to sell lots of OTCs whilst not doing many prescriptions.

  • Independent pharmacies making only a marginal income.

  • In certain areas rates and rent can be very low.

  • Private dispensing in some parts of central London.

The number of independent pharmacies fell by 150 in the last 2 years, whilst multiples saw an increase of just under 500.

 

In 2008/09 44% of new pharmacies opening were within 500m of an existing premises. Suggesting that new pharmacies are about competition rather than improving access.

 

There are now

  • 450 one hundred hour pharmacies

  • 46 out of town shopping centre pharmacies

  • 56 mail order or internet

  • 3 one stop primary care centre pharmacies

The pharmacy lobby want to see the end of 100 hour applications. The government have ignored their appeals so far. DDA Online has heard rumours that 100 hour pharmacies will no longer be able to be made after April 2010. However this week's announcement of consultation on PNA regulations says the current regulations are expected to remain in place till April 2011.

If you are a GP considering making a 100 hour application for a pharmacy in your surgery you need to decide whether to apply now or wait- its your call.

 

The average pharmacy does 161 MURs, they are allowed to do 400 per pharmacy, so only 40% are being done of the possible total.

 

The DH does not publish data on the number of pharmacies in Health Centres or which are owned by GPs. We think the number is rising.

 

 

 

 

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