2nd March 2023 – The Government’s funding strategy for vital community pharmacies is in tatters, says London Medical Laboratory. The warning comes as LloydsPharmacy prepares to sell off a ‘significant number’ of its stand-alone branches, in addition to axing its Sainsbury’s outlets.

The reported planned sell-off of a significant number of LloydsPharmacy stand-alone stores shows that community pharmacy funding is in dire straits, warns London Medical Laboratory.

It says the Government’s funding strategy for pharmacies is unsustainable. Many areas of the UK will be in danger of having no local chemist store, unless funding is increased and pharmacies embrace the burgeoning wellness market.

Dr Quinton Fivelman PhD, Chief Scientific Officer at London Medical Laboratory, says: ‘This latest news should set the alarm bells ringing in Westminster. Pharmacy Network News is reporting LloydsPharmacy has launched a “divestment campaign” that it says will “include a significant number of new branches”.

‘The phrase “significant number” is alarming. In fact, Aurelius, the owner of LloydsPharmacy, has reportedly not commented on whether it intends to sell all its LloydsPharmacy branches in the UK, or the homecare and wholesale parts of the business.

‘This comes after the news earlier this year that LloydsPharmacy was to close all 237 of its remaining Sainsbury’s supermarket outlets. In 2015, LloydsPharmacy purchased Sainsbury’s in-store chain of (then) 277 outlets and has already closed a significant number.

‘The news of these branch sales is not entirely surprising. LloydsPharmacy has just posted a £66m net loss for 2021/22, with a fall in annual turnover of 3.4%. It says: “The Government funding model for community pharmacy in England continues to be challenging.”

‘LloydsPharmacy is one of the UK’s leading pharmacy and healthcare chains. If it cannot make money under the current community pharmacy funding scheme, how can local independent pharmacies be expected to? We could be facing a serious industry-wide crisis.

‘In addition to the LloydsPharmacy closures, Tesco has just announced it is closing 8 in-store pharmacies and Asda is closing 7. Since 2015, 808 pharmacies have closed permanently in England while only 138 pharmacies have opened. That’s a net loss of 670 stores and the rate of closure seems to be increasing.

‘This could be the tip of the iceberg. London Medical Laboratory’s analysis is that over 100 more stand-alone pharmacies may close this year, following a net loss of 236 during 2021/2.

‘Community pharmacies are literally a lifeline for many people. The role they play in their communities and their importance during the Covid pandemic cannot be overstated. However, the way they are funded by the Government means many are struggling to stay afloat.

‘A report by accountancy firm Ernst & Young has found that 64-85% of community pharmacies in England are heading for a financial deficit under current funding arrangements. Smaller community pharmacies are likely to be hardest hit. The Telegraph reports three-quarters of family-owned pharmacies could soon close permanently.

‘Typically, local pharmacies in England generate almost 90% of their income from their NHS contracts and the remaining 10% from counter sales of non-prescription medicines and other items, from reading glasses to perfumes. However, in recent years, supermarkets and e-commerce have gobbled up many of these non-NHS sales. At the same time, the total national funding for community pharmacies, which was reduced in 2016/17, has remained relatively unchanged.

‘Community pharmacy funding relies on fees for the services pharmacies perform and the profit they are allowed to keep after shopping around for the best prices for drugs. This means “indie” chemists and small multiples are at a huge disadvantage compared to large chains. Family-owned businesses cannot afford to purchase the quantities needed to achieve significant savings on medications through bulk buying.

‘Community pharmacies clearly need additional Government funding urgently. They also need to think beyond traditional prescription services and embrace the move towards personal fitness and wellbeing. Here in the UK, the health and wellness industry is worth £19.5bn and is growing at an annual rate of 10%.

‘For example, there has been a significant rise in patient awareness regarding self-testing. Health-conscious Millennials have become the “wellness generation”. Together with an increasing number of elderly people, they are requesting better access to testing and health monitoring.

‘Blood tests are likely to be at the heart of pharmacy reforms. New tests can diagnose conditions from diabetes to thyroid problems to specific allergies. Such tests can be performed by qualified pharmacy phlebotomists and are also available as off-the-shelf, finger-prick blood tests. Not only can these tests form the basis of treatment, but they can also prevent problems before they become a serious health issue.

‘Today, companies such as London Medical Laboratory (the UK’s largest phlebotomy network and leading blood testing, diagnostic and health check business) are constantly introducing new tests to give people a comprehensive picture of their health. We provide phlebotomy training to all our UK-wide partner pharmacy sites, which will number over 200 by the end of the year.

‘Our new generation, off-the-shelf, home blood tests are highly accurate, quick and simple to carry out. They take only around five minutes, with results emailed the next day. For example, London Medical Laboratory’s General Health Profile at-home blood test provides people with a comprehensive check-up of their general health, including diabetes (HbA1c), gout, liver & kidney function, bone health, iron levels and a full cholesterol profile.

‘Many tests can be taken at home through the post, or at one of the many drop-in clinics that offer these tests across London and nationwide in over 95 selected pharmacies and health stores. If done in-store, a full blood test can be added that can indicate a wide range of issues such as anaemia and leukaemia. For full details, see: https://www.londonmedicallaboratory.com/product/general-health