Financial pressures

24 May 2019

|| Featured Article

A look at the findings of an NPA report on financial pressure that has been submitted to the government

“I have not fired any staff, as this is critical to any healthcare business – instead I have not taken a monthly salary for six months and am feeling the pressure.”

This is one of the comments made by an NPA member responding to a survey on financial pressures. Other comments cover cash flow being the worst it has ever been, community pharmacy as “a shadow of its former self” and imminent closure if nothing changes in the next six months.

A report on the survey, “Financial pressures on community pharmacy in England”, has been compiled and submitted for “urgent consideration” to the Department of Health and Social Care.

The results were based on a survey of nearly 250 NPA members carried out at the start of the year. The NPA wants ministers and officials to have a clear picture of the extent of the challenges that independent pharmacies are facing. It is hoped this will help inform future decisions about investment in the sector and encourage the government to improve the concessionary pricing system.

It has also been submitted as further evidence of the need for a multi-year contractual settlement in England.

Nine in 10 of those surveyed are less optimistic about the future of community pharmacy than they were 12 months ago, and almost two thirds say their business needed a cash injection to maintain working capital.



Reena Barai is an NPA Board Member and independent community pharmacy contractor in Sutton, South West London. Is she surprised by the findings? “No, not at all,” she says. “I’m working harder than ever before for even less return. Ideally, we should be taking on more staff, but with so much uncertainty, we don’t know if we will be able to pay the bills – it is a very difficult time.”

She says that cash flow has been a major problem across the sector and states that the overarching issue is an uncertain future.

“We can’t predict what will happen, which means that we can’t plan for our businesses without knowing what our new contract is. No one can invest right now without knowing what the future is.” As for what Reena thinks is needed for a brighter future, the answer is not surprising – certainty, security and funding. “If we could get a five years contract with the right funding, then that would help. Let’s hope so.”



Financial pressures are also having knock-on effects on patient services. Survey responses range from “services are suffering”, to “the service is fast becoming unsafe” through to those reducing opening hours.

Martin Bennett, Superintendent Pharmacist at Associated Chemists (Wicker) Ltd in Sheffield, who has been working in pharmacy since 1973, agrees that the public are suffering due to the financial pressures on pharmacy.

“The service that we provide now and the level of safety that we provide are not as good as they were two or three years ago and that is a disappointment.”

He continues: “Over the years I’ve been in pharmacy there has been gradual improvement, but now it has started to go the other way. The service is getting worse and everyone is having to economise. That is going to result in more errors and a poorer service for patients – we can’t provide a Rolls Royce service on Mini funding.”

He adds that the best case scenario for the coming months would be a pharmacy contract that involved an increased clinical role, with increased funding. While the worst case would be the same contract, but with no additional funding.

Also covered in the report are the impact on motivation and morale (including depression, anxiety and poor mental wellbeing) and future investment in services.

The report concludes with a sentence that quotes the NHS Long Term Plan: “Just when the NHS wants to ‘make greater use of community pharmacists’ skills and opportunities to engage patients’ the current financial challenges’ are a powerful disincentive to pharmacy owners to invest in NHS services.”


69% say that cash flow is currently having a “critical negative effect” on their ability to operate and sustain a successful pharmacy business.

91% are less optimistic about the prospects for community pharmacy than they were 12 months ago.

86% said they have been affected mentally or physically by funding cuts and escalating costs.

79% reported that the moral of their pharmacy team is lower than 12 months ago.

54% of independent pharmacies are “very worried about the survival” of their business.

89% say that their total monthly wholesaler bills have exceeded their NHS payments for at least one of the last six months (70% more than once).

64% of owners said that they had needed to put a cash injection into the business to maintain working capital.

31% said they asked their wholesaler for an extension to credit terms in the last 12 months.

91% said the current financial situation is making it more difficult for pharmacies to maintain a safe service to patients.