A drop in market share doesn’t take away from large pharmacy chains’ offer to the public, says Company Chemists’ Association chief Malcolm Harrison. By Arthur Walsh

Large pharmacy multiples have had a strong innings with Pharmacy First in the first few months of the service, says Company Chemists’ Association chief Malcolm Harrison. “The latest number is close to 100,000 consultations from our members,” he tells me at the start of April when we meet in central London. He’s encouraged by the “linear growth” of the service so far, and shares reports of pharmacists saying, ‘This is why I entered the profession’.

This is very much still a moving piece; our conversation takes place shortly after the confirmation that pharmacists would finally be given direct write access onto patients’ GP records, a long overdue development that Harrison welcomes. “As with any launch, there is the odd teething problem, but we’re excited about what we’re seeing,” he says. “It’s good that it launched when it did rather than waiting for it to be absolutely perfect.”

Harrison – who spent 20 years at Boots before taking the top role at the trade body in 2018 – says the collective footprint of CCA members gives his organisation rolling access to figures that could help shape the national conversation. “We realised quite early on we would be able to see stuff no one else could because the data’s not coming out of NHS England,” he explains. “We can talk with confidence; the data we’ve got is from over 3,000 pharmacies across the whole of England, so it’s a large enough sample.”

A March briefing from the CCA revealed that acute sore throat and UTIs accounted for almost 60 per cent of all clinical pathway consultations. “There’s going to be seasonality,” Harrison comments. There are also indications that the service is most utilised in precisely the deprived communities the NHS is anxious to reach.

Pharmacy First has the potential to “reach out and touch people who aren’t routinely visiting a pharmacy”, Harrison says, arguing that for certain conditions, the local pharmacist could supplant the GP as the ‘go-to’ practitioner for families with young children. He also shares anecdotes of pharmacy teams spotting suspected sepsis during a pathway consultation and signposting patients to A&E, pointing to wider wraparound care possibilities.

“We’re confident that if we maintain the current level of growth, we’ll get to where we need to be,” he says. “The NHS currently says it wants six million consultations a year out of the seven conditions – 10 million if you include blood pressure and contraception too.” The CCA believes there are 30 million GP appointments pharmacy can free up if the service is “fully funded” and Harrison says the organisation is committed to using the data at its disposal to evidence successes and encourage commissioners to think about expanding the service.

He believes independent prescribing would be a “natural progression” and would like to see the model move away from PGDs eventually. This could address current limitations such as the otitis media pathway age restrictions, which to patients could feel arbitrary, says Harrison, adding: “It’s very difficult to say to a 13-year-old they can’t have antibiotics for their ear infection.”

Closures

If the new pharmacy services create opportunities to provide care on the high street, financial pressures and resulting closures could snap some of that potential away. It’s an issue the CCA is vocal on, with the latest NHS figures showing that England has lost more than 1,500 community pharmacies since 2015 and over 700 since 2021.

“In order to provide pharmaceutical care, you need pharmacies,” says Harrison as he notes that the rate of closures in some deprived areas has been especially intense. “The thought that more pharmacies are closing in areas where there is greater need doesn’t sit well with me.”

The most high profile divestments have been made by CCA companies. In May, Boots is expected to complete a close/sell programme that will have seen the biggest player in UK pharmacy shrink its estate by 300 stores in the space of a year. And in an interview for our January issue, Rowlands Pharmacy MD Nigel Swift told me his company no longer sees itself as “one of the larger chains” after selling over a fifth of its branches within three years.

Then of course, there is LloydsPharmacy, which sold up completely over the course of 2023 and had to call in liquidators, leaving behind a fraction of the cash needed to service debts amounting to nearly £300m. I’m curious when Harrison first knew of the owners’ plans; even before the announcement of the Sainsbury’s branch closures in January last year, rumours were swirling that Lloyds was about to go bust.

“I was briefed by the leadership within Lloyds before the story broke,” he replies cautiously, adding: “The owners had their own reasons for doing it – that’s outside my remit.”

The story of Lloyds should be a wake-up call for commissioners, he says: “When a very large business says ‘we’re exiting the market’, that’s not a decision it has taken lightly.”

All this churn has seen the CCA-owned segment of English pharmacies fall to the low thirties in market share percentage terms in England, while businesses operating between one and five pharmacies have seen their collective share shoot up to almost 50 per cent. “It’s been a year of change,” Harrison acknowledges, but he is quick to add that it’s “not just the large businesses” that are feeling the pinch; many independents have sold up too.

Is the drop in CCA market share a sign that large companies need to redefine their offer to the public? “I don’t think so,” says Harrison. “Notwithstanding their ability to generate information that can be used to influence and shape a negotiating agenda, they’ve got an awful lot of experience, skill and considerable resource that can be brought to bear to support the whole of the network. There’s significant value in having large corporate structure within the community pharmacy network.

“I don’t think any business in any sector has a God-given right to a certain level of market share, but I think the network is stronger because it has large multiples in it than not.”

The reach of big businesses offers scope to get things off the ground, he says, citing sore throat test-and-treat as something that started as a private Boots service and eventually found its way onto a nationally commissioned programme. Harrison says multiples “have that ability to innovate and research and produce the evidence that can inform the future direction of travel for the network, which hopefully everyone can benefit from”.

Negotiations

Following the official end point of the five-year contract in April, the sector is in limbo until an agreement for the current financial year can be reached – but few sweeping reforms are expected this side of the general election. Eyes are already focused on what the following year might bring, and Harrison is clear on the number one priority: “The big thing is funding. People aren’t able to make a living or break even, let alone make a profit out of the current framework.”

He’s glad the Government found the money for Pharmacy First. “But without the core funding being sorted out, how sustainable is that future?” he asks. “The foundation is in the supply function; it’s 80 per cent of what we’re paid to do and 80 per cent of the workload. We need to make sure that it is equitable, sustainable and predictable. Then you can use that to launch other things.”

He believes the NHS “needs to take a long, hard look at what it can afford and what it will pay for, and then ask what that will get it – both from a supply and a care point of view”. Shifting monies around so that pharmacies are asked to subsidise one business stream with income from another won’t be good enough, he says: “No aspect of the contract should be loss making.”

This doesn’t mean that each pharmacy will get an equal slice of the cake, however. “Some will be better at buying than others and there will always be an element of jeopardy,” Harrison says. “But in and of itself, each element of the contractual framework should be sustainable.”

The CCA is calling for a pounds-and-pence increase to the global sum as well as a review of the reimbursement mechanisms business owners have long had to grapple with. “How can you make investment decisions when you don’t know how much money you’ve earned or how long you can keep it for?” he asks. “Let’s not forget that when Covid hit, the one thing the Government was desperate for was the continued supply of medicines. That’s the one thing it doesn’t seem to want to pay for.”

The current approach to margin is “heavily weighted to the extremes”, with most medicines containing “virtually nothing” and a few that are “exceptionally loss-making”, he says, adding that if the Government is excessive in its attempts to curb medicines spending, it risks exacerbating shortages. “You can be an outlier to a certain degree,” he says, “but as we found with HRT manufacturers, any surplus supply will be directed to markets where they get the biggest return.”

Political outreach outside of Treasury negotiations forms a crucial part of the sector’s strategy and it may be bearing fruit, as pharmacy is referenced more and more often by supportive politicians during Westminster debates. Is Harrison hopeful that decision makers are getting the message on funding? “Definitely,” he replies, going on to say that what pharmacy must now do is try to translate the goodwill of patients and politicians into new money. He believes Pharmacy First has “really helped”.

United front?

The sector’s numerous representative bodies are increasingly engaged in collective efforts, with the CCA and other organisations putting their names to a pharmacy manifesto aimed at whichever party forms the next government. Harrison and National Pharmacy Association chair Nick Kaye wrote a joint column for P3pharmacy readers in January in which they urged all contractors to get behind Pharmacy First. Harrison feels that unity is important in building a case for more funding. “We need to be able to understand what is in the best interests of the whole network, and a collective, collegiate voice is stronger than everyone saying their own little thing,” he says, adding it’s a “no-brainer” when there are shared interests at stake.

But this being pharmacy, there is always some scope for controversy. The Association of Independent Multiple Pharmacies (AIMp) was critical of the decision to give distance selling pharmacy Pharmacy2U – which is not technically a chain pharmacy – one of the CCA’s places on the Community Pharmacy England committee. A survey of AIMp members pointed to strong feeling on the issue among many business owners. “Controversial to whom?” asks a quizzical Harrison when I raise this. “The way it works is that the CCA is allocated seats on the committee and we can give them to whomever we want within our organisation as long as they meet the criteria. We chose to allocate one to Pharmacy2U, which is the largest DSP in the country, with the volumetric equivalence of a number of hundred pharmacies and a corporate structure that is conducive to being a member of the CCA.

“It is an active contributor to our network – not simply in being a CCA member, but also contributing to our efforts to shape the future. It has some great ideas about how pharmacy could evolve for the future, and not just from a DSP point of view.”

So those with reservations about Pharmacy2U not being a ‘real’ multiple are just hung up on semantics? “I’m not entirely sure what relevance that has,” says Harrison. “My understanding of the CPE committee is that members are there to represent all contractors. Pharmacy2U is a contractor and it has a legitimate place to be represented at CPE, whether that’s through having a place themselves or not. Every single member of that committee should be representing Pharmacy2U just as Pharmacy2U should be representing all independents and multiples. When you hear lots of people trying to stir things up, whose interest does that serve?”

Workforce

The conversation moves on to staffing challenges in pharmacy and ongoing efforts to free up capacity. Last summer, the CCA’s Future For Community Pharmacy briefing made a number of recommendations on workforce, and in some policy areas, there are green shoots. Harrison is excitedly awaiting the Government’s decision on supervision reforms following a recent consultation, and says he has lobbied for change ever since he first joined the CCA and wrote to rebalancing board chair Ken Jarrold. “We are really hopeful that we can see through some of these changes,” he says. “I don’t think that should be the end, either. I’m really excited to see pharmacists take on more clinical roles in community pharmacy, hopefully enabled by changes to supervision.”

But on the whole, Harrison is pretty scathing of the Government’s performance on boosting the workforce. “The NHS Workforce Plan is a plan in name only,” he says. “It’s set some ambitious targets for more training places and more people joining the register each year, but its actions don’t seem to be conducive to moving towards that; the greatest number entering the register in any year out of the last 10 was in 2016.

“The register is undoubtedly growing, but not fast enough when you look at the number of people in the country who need care.”

Harrison warns of a “bottleneck” as employers take on fewer foundation year placements due to the new independent prescribing requirements and a need for direct prescribing practitioners: “There’s a real concern it will reduce the number of registrants entering the sector,” he says. “I think we’ll see that play out over the next six to 12 months. There are some fundamental assumptions that were made when this path was chosen, which perhaps will be found to not be the most appropriate.”

And the sector is still living with the aftershock of the ARRS scheme, which from its inception has been “a real threat” to community and hospital pharmacy says Harrison. He believes NHS England fundamentally miscalculated the number of pharmacists in the country. “It thought it had a surplus of pharmacists and it didn’t. There weren’t 8,000 full-time equivalent pharmacists sitting at home twiddling their thumbs, but there have been 8,000 recruited into general practice. One must assume they were doing work elsewhere.”

ARRS migration has led to the price of pharmacists going up at a time when other business costs are rising. “It’s not just locums,” says Harrison. “Locums charge whatever their market value is – no one has a problem with that. It’s the sudden increase and the lack of corresponding increase in funding. It seems interesting that the NHS has taken the path of identifying a need for pharmacists providing care in the community, and rather than asking patients to go where the pharmacists are, it moves the pharmacists to a location where neither the patients nor the pharmacists were.”

Causes for optimism

What is Harrison most optimistic about? Pharmacy First, supervision and independent prescribing are the key areas; he also cites vaccination as an area where there is potential for innovation. Looking to build on the sector’s success with flu and Covid, the CCA is working with the NHS, manufacturers and government bodies like the UK Health Security Agency to try to understand the opportunities and challenges posed by a decline in uptake rates for early years vaccinations.

But the battle to reverse pharmacy funding cuts will always take centre stage. ‘There’s lots of opportunity, but all these nice things are dependent upon having a healthy and sustainable pharmacy network, that’s the big elephant in the room,” Harrison says. “There needs to be an injection of funding into the core business of pharmacy.

“With the state of the country’s economy, the money isn’t just lying around waiting to be allocated, but there is a strong argument for investing existing money into community pharmacy and getting better bang for your buck than from other parts of the health system. The closer to home you can treat someone, the less costly it is.”