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With major players still loss-making and the funding model shifting, what would a sustainable, clinically-led future for distance selling pharmacies look like? By Saša Janković

Online pharmacy has boomed over the past decade as a growing number of patients decide an Amazon-like, home
delivery service is the most convenient solution for their repeat prescriptions. But is there really a viable path to profit
for online pharmacies, given the costs involved and the pharmacy sector’s pivot away from an items-based contract?

From June last year Community Pharmacy England (CPE) announced that no new applications for distance selling premises (DSP) pharmacies would be accepted, in a regulatory change which had been agreed as part of the sector’s funding deal.

Then, in service changes which came into force at the beginning of October 2025, CPE said DSPs would no longer be able to provide directed services (Advanced, National Enhanced and Enhanced Services) face-to-face with patients at the pharmacy premises from 1 October 2025,although they could continue to provide Covid-19 and flu vaccination services at the pharmacy premises, as part of an Advanced, National Enhanced or Enhanced service, until 31 March 2026.

Nonetheless, there is no sign of the online pharmacy market diminishing, with the biggest player by far, Pharmacy2U, on a growth path seeing substantial revenue hikes and additions to its portfolio – most recently expanding its pharmacy offering into the pet health sector with the acquisition of veterinary medicines dispenser The PharmPet Co, and its high-profile acquisition of online pharmacy LloydsDirect in 2023.

However, despite the online giant saying it is “the UK’s third largest distributor of prescriptions,” securing investment and winning over more patients every year, Pharmacy2U struggles to make a profit – a trend observed in some other DSPs, three of whom made it to a recent Sunday Times list of the fastest growing private tech companies despite two of them being in the red.

Glasgow-based Phlo came in at number 13 on The Sunday Times list, with a focus on building its Phlo Connect UK-wide digital health business covering medicine prescribing and pharmacy fulfilment, alongside its Phlo
Clinic patient service care. According to The Sunday Times the company has grown its revenue 180 per cent to £23.1 million but is yet to show a profit.

Norwich-based Evaro – sitting at 29th out of 50 companies in the list – provides digital pharmacy infrastructure that
handles compliance, fulfilment, and clinical consultations to customers including online pharmacies e-surgery and Clue. Helping to deal with more than 40,000 prescriptions a month and serving around 2 million people across the UK, The Sunday Times data shows it has grown its revenues 110 per cent to £12.1 million, generating £30 million in
revenues for its partner brands, and has started to make a profit.

The last pharmacy adjacent company on the list is London-based digital healt company HeliosX, ranking at 42. Founded in 2013, it serves customers in the UK, Germany, Canada and the USA via online prescribing, an in-house compounding lab, and personalised telehealth care. Sunday Times data shows a revenue growth of almost 89 per cent to more than £178 million, yet it remains loss-making.

Profit plans

If even these big players are struggling to turn up the books, what might a viable path to profit look like for online pharmacies? Dr Sophie Dix, head of medical aff airs at MedExpress – a UK-based regulated online pharmacy and part of HeliosX – believes scale on its own isn’t a sustainable answer for online pharmacy anymore. “The old model was built around volume and per-item reimbursement, and that doesn’t fully reflect how care is delivered today,” she says.

Instead, she thinks long-term viability comes from moving beyond fulfilment into genuinely clinically-led services, appropriate prescribing, ongoing patient support, and therefore better outcomes over time: “That means investing in clinical governance, technology, and continuity of care, not just logistics. Providers that see care as a responsibility rather than a cost are far more likely to build something sustainable.”

Reece Samani is founder and superintendent of Signature Pharmacy, an online pharmacy offering medication delivery services for NHS and private prescriptions. He says dispensing NHS items carries a “fundamental disadvantage” for DSPs due to postage costs which do not apply to community pharmacies.

“Depending on the delivery method, a DSP must generate approximately £3 per prescription item simply to cover postage before any margin is realised,” he explains.

“So, for one- or two-item prescriptions with limited buying margin against the DM+D price, achieving profitability is extremely challenging.”

On the flip side, while it is widely recognised that item-based dispensing delivers diminishing returns, Samani says this is not necessarily a problem: “I wouldn’t look at this as a constraint, but an opportunity, to diversify to clinical services such as Pharmacy First and the contraception service, both of which can be delivered remotely, materially improve the economic sustainability of care delivery, while also delivering clear clinical benefit.”

Victoria Steele, former superintendent pharmacist at Lloydspharmacy, and founder and principal consultant of Steelier Ltd – a specialist consultancy supporting regulated businesses and investors with governance, risk, and compliance strategy – has been working closely with a number of online pharmacies over the past year, mainly in the private sector, but also those which have NHS contracts and private patients combined.

With the current funding model as it is, she says a move into private services is “a must” for any pharmacy wanting to become or remain profi table. “In an online environment there isn’t the same considerations for their specific demographics like there is in bricks-andmortar pharmacies,” she stresses.

“Ensuring private services are compliant with all guidance, regulations and have been risk assessed appropriately are musts, as well as ensuring that the patient journey is straightforward, consumer friendly and builds trust, loyalty and delivers good healthcare outcomes.”

While private services may be one way forward, could current regulations limiting online pharmacies and DSPs prove too much of an additional complicating factor for those looking to expand in this space?

Steele says although she doesn’t believe current regulations are “a complicating factor”, she also thinks “pharmacy doesn’t need any more regulation”, adding: “I believe strongly that there is a place for online pharmacy and bricks and mortar pharmacy to survive and thrive alongside each other”.

Dix agrees that regulation itself isn’t the problem, calling it “essential for protecting patient safety and maintaining trust”. She believes the real challenge is that “much of the regulatory and funding framework was designed for a bricks-andmortar, item-based model, and hasn’t yet fully caught up with digital-first care”.

For “responsible online pharmacies”, Dix says that can create friction, particularly for those trying to innovate responsibly.

“The opportunity now is evolution, not deregulation,” she says. “The priority should be modernising frameworks so they reflect how care is increasingly delivered, through clinically-led, digital first models that combine medical oversight, data-driven monitoring, and continuous patient engagement.

"That means clearer pathways for virtual assessment, remote prescribing, and ongoing digital follow-up, underpinned by strong evidence, transparency, and safeguards around safety, consent, and continuity of care.”

Connected services

Dix also calls for better connectivity across the health system. “Joined-up electronic health records, used with appropriate governance and patient consent, can give clinicians real-time visibility of treatment and history, supporting safer decisions and more coordinated care wherever patients are treated,” she maintains.

But, of course, achieving this requires open collaboration. “Regulators, clinicians, digital providers, and patients need to share evidence, align on standards, and shape guidance that keeps up with innovation without compromising trust,” says Dix, adding: “Done well, this kind of evolution strengthens public protection, enables responsible innovation, supports earlier intervention and better long-term outcomes and helps ensure consistent clinical standards regardless of whether the care is delivered in person or online.”

Even for those businesses which appear to be succeeding, recent history tells us that things are not always as they seem. If the struggle to profitability is a hint that the current model for online provision is inherently unstable, what could it mean for patients and policymakers if a big player left the market?

Steele says: “Sadly, we all know that has occurred previously and there is every possibility that it will again.

"However, I am sure, if it were to happen then community pharmacy would survive, it would adapt and change like it has done before. The most important component in this is that pharmaceutical services remain in the communities that need them and that inequalities in accessing healthcare aren’t increased in harder to reach areas.”

Dix agrees that the most important consideration is continuity of care. “When healthcare models rely too heavily on scale, efficiency, and minimising costs alone, they can become fragile, and patients are the first to feel the impact if disruption occurs,” she says.

“At the same time, online pharmacies are playing an important role in widening access to treatment, including in areas like weight management, where demand currently significantly exceeds NHS capacity. If this access is disrupted, it wouldn’t only affect patients in the short term, it would also place additional pressure on an already stretched system, particularly as evidence continues to emerge around the role of these medicines in preventing chronic illnesses.”

For policymakers, Dix suggests this underlines the importance of supporting models built on “resilience, clinical accountability, strong patient relationships, alongside responsible innovation, including approaches where hybrid public and private models work together to maintain equitable access to treatment”.

For providers, she warns: “It’s a reminder that lasting trust comes from services designed to endure, not just to grow quickly. A stable and responsible digital pharmacy sector ultimately benefi ts everyone.”