You are here: Dispensing Doctor Data » The pharmacy market in 2010-11: An analysis
There are a number of important findings within the recent pharmacy statistics report published by the NHS Information Centre.
Yesterday we reported on Rural pharmacy applications soar. It is possible that there are now 500 pharmacies where GPs have an interest.
Looking at the dispensing volume bands (items per month per pharmacy) in detail:
Why are these figures important?
The market is obviously changing, with larger pharmacies doing larger amounts of dispensing. Smaller pharmacies are declining and losing market share, the 4-5% dispensing item annual inflation notwithstanding. In other words, the decline in smaller pharmacy numbers does not suggest that smaller pharmacies are simply getting bigger, and moving into a higher volume band.
There are three possible explanations for this:
1. Profits fuelled the purchase of independent pharmacies by the large multiples; pressure on reimbursement has reduced the amount of profits the multiples have to spend
2. There is an increasing number of doctor-owned pharmacies entering the market
3. Reduced competition from the multiples has encouraged young pharmacists to open independent pharmacies.
2010-11 saw a huge increase in the number of applications to consider rurality in controlled areas (as well as the increase in pharmacy applications). These applications have increased in number from 34 in 2006-07 to 263 during 2010-11, although we do not know whether the applications actually resulted in pharmacies opening: it may be that the development of PNAs triggered PCTs to look at rurality, rather than an actual pharmacy application.
I think there are two possible explanations for the increase in applications in controlled areas:
2. Doctor applications to locate a pharmacy in their surgery
It is worth noting that while the DDA has seen a small fall in the number of dispensing practices, it has not seen an increase in the traditionally small number of calls from practices suffering a predatory application.
Undoubtedly, the market is changing. The increasing number of doctor-owned pharmacies is one factor, The market town doctors in larger practices with pharmacies will be one cohort within the high volume end of the market; opening a pharmacy requires a significant increase in income to cover the increased costs of employing a pharmacist, there business case will be based on high volume dispensing.
Another figure to note is that 19 pharmacy applications were granted in controlled areas using the exemptions to the control of entry. None were refused. Since 2005, 1,561 100-hour applications have been granted.
Pharmacists I have spoken to do not believe that 100-hour pharmacies, even some of those within supermarkets, are viable in the current environment; however, I am aware of successful ones operated by doctors.
Nigel Morely, Managing Director of Surelines, told DDA Online, "I believe that the number of pharmacies where GPs have an interest in (either wholly or in partnership with pharmacists) is circa 500." He added, "Another point to consider is that when long existing collocated pharmacy leases come up for renewal, there is a window in which the GP landlord can consider the possiblity of not renewing the lease and establishing their own pharmacy. This is complex but we have advised several practices on this strategem."
Boots have 2,200 pharmacies in England.
Lloyds have 1600 pharmacies within the UK
There are 1337 dispensing doctor practices in the UK and possibly 500 pharmacies partly or wholly owned by doctors.
In conclusion for the first time ever the number of independent pharmacies is increasing, partly due to rural doctors opening pharmacies. High volume dispensing item pharmacies are on the rise. This again maybe partly due to the emergence of doctors as owners of pharmacies.
A lot of patients are now getting their medication from their doctor.