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Dispensing GPs lose market share to pharmacies

Pharmacy network growth continues - for now

November 10th 2017

Tagged: DM Zone news NHS statistical reports Pharmacy owners' news England

By Ailsa Colquhoun

Dispensing GPs in England dispensed 84.9 million items during 2016-17, a rise of 300,000 items (0.1 per cent) on the previous year, new NHS statistics reveal.

However, this represents a marginal (0.05 percentage points) fall in market share while community pharmacies increased their share by 2 per cent over the same time period. Community pharmacies now dispense 1.02 billion items, over half (52.1 per cent) of which are dispensed via the Electronic Prescription Service.

Furthermore, community pharmacy numbers are yet to reflect any impact of the £113 million reduction in community pharmacy funding in 2016-17. During 2016-17, there was a net rise of 11 pharmacies, increasing the size of the pharmacy network in England by 0.1 per cent to 11,699. However, during the year 47 pharmacies closed, which is the largest number of closures since 2013-14.

The statistics also reveal that there were five applications granted in controlled areas of which two were for unforeseen benefits.  During the year the NHS heard 32 appeals relating to applications made in controlled areas, of which 62.5 per cent (20) were lost on appeal.

There were no applications for outline consent by dispensing GPs.

Looking at the make-up of the pharmacy sector, independents continue to decline in market share and now account for 37.9 per cent of the total network (4,434 pharmacies). The average monthly item volume per pharmacy now stands at 7,218, up from 5,865 in 2007-08, explaining the rise in the proportion of pharmacies dispensing 6,001 items and over. One in five community pharmacies now dispenses 10,000+ items per month.

Pharmacies are also maximising clinical services income: in 2016-17 96.1 per cent of pharmacies provided the pharmacy medicine use review service, and on average deliver 300 a year (75 per cent of the maximum). Some 85 per cent of pharmacies provide the New Medicine Service at an average rate of 87 a year.

The percentage of pharmacies providing NHS flu jabs has also risen significantly compared to the previous year, up to 72.2 per cent from 61.6 per cent. In volume terms this equates to 950,765 vaccinations across the network, a 60 per cent increase in delivery compared to the previous year.

The report also notes the trend over the last 10 years of declining average NIC per fee, due to factors including the following:

  • The Medicines Margin Survey resulting in adjustments to Category M generic drug reimbursement prices as agreed under the Community Pharmacy Contractual Framework
  • An increase in generic dispensing rates (due to patent expiry and loss of exclusivity for a number of leading branded drugs) and the continued efforts to promote generic prescribing
  • The Pharmaceutical Price Regulation Scheme (PPRS), which has resulted in a reduction in branded drug prices (with price cuts of 7.0 per cent in 2005, 3.9 per cent in 2009 and 1.9 per cent in 2010). There were automatic permitted price increases of 0.1 per cent from 1 January 2011, 0.2 per cent from 1 January 2012 and 0.2 per cent from 1 January 2013. The 2014 PPRS agreed that the drugs bill will stay flat over the first two years of the scheme and will grow slowly after that.