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As Avicenna Membership Services splits from the retail chain, newly appointed MD Brij Valla sits down with P3pharmacy editor Arthur Walsh

Many pharmacy owners need support negotiating a period of upheaval, Brij Valla tells me when we meet in May.

The newly appointed managing director of Avicenna Membership Services explains that while a handful of people in the sector are “au fait with the politics,” many more are too busy seeing patients to keep up with who has said what or grasp how new policies impact them on the ground.

He uses the topical example of retained margin, which has risen from £800m a year to £900m under the new 2025-26 contractual framework for pharmacies in England.

It can seem abstract to many, and he finds that as a membership services organisation Avicenna has to sit down with business owners and explain that the money is not simply allotted evenly across the sector.

“This is where we come in and explain what it actually means and how the drug tariff is going to move,” he says.

We speak as his organisation announces a major change: Avicenna Membership Services has decoupled from the Avicenna Pharmacy retail chain in a move triggered by the former’s buyout by Dutch buying group Nafinco.

Having acted as sales and purchasing director since 2020, Brij is now managing director, with chair Salim Jetha remaining in post.

While the move was first announced publicly at the Sigma Pharmaceuticals conference in Baku in mid-May, Brij tells me the transaction became effective at the beginning of March following several months of due diligence, with Nafinco having made its initial overture before Christmas.

“This is a pivotal moment for independent pharmacy,” Brij told Sigma delegates. “With Nafinco’s backing and our increased scale, we’re building a next-generation buying group that delivers real commercial value, deep sector support, and smart digital tools to help our members thrive – not just survive - in a challenging pharmacy environment.”

He lists the benefits to me in our interview. “Rather than having a private equity house which potentially was just after returns, now we’re backed by another buying group,” explains Brij.

“That’s really helpful because they understand the buying group language and the importance of helping members. They thought the UK is such a great market and out of all the buying groups they decided to choose us.”

And despite no longer being part of the same business entity, the former retail branches are now buying group members: “They see the value in the membership services. We’ve been specialising in procurement for over 35 years.”

They are in the process of decoupling from the retail group now. “There is a lot of internal software we use for payroll and things like that. We have to separate it out because it’s not one entity anymore,” he says.

The Avicenna brand is retained by the membership group, with the pharmacy chain allowed to go on using the name Avicenna Pharmacy for a limited period of time. He expects it to fully rebrand within “a couple of years”.

Asked why the membership organisation decided to split from the pharmacy group, he hints at pressure from the previous private equity backers on “return for investment” as well as a desire to strengthen Avicenna’s focus on supporting independent members.

Beginnings

Brij began his career at Sainsbury’s, where he joined as a pre-reg and worked his way up the ladder to head office as compliance officer.

From there he was headhunted by Salim Jetha to join Avicenna, where he created the regulatory support arm. “I mirrored what we did to support a chain pharmacy and replicated that for independents.”

Then in 2017, “there were five of us who got together and acquired funding in order to create a pharmacy chain named Juno.”

Juno went on to acquire Avicenna in 2019, combining its pharmacy chain with the buying group.

The retail chain was on a positive growth path for a few years, making sizeable acquisitions such as the purchase of the 57-strong chain of Dudley Taylor pharmacies and the Sheppards Pharmacy group’s 34 branches, both in 2021.

 However, there have been numerous reports of branches being shed across England. Has the retail chain shrunk significantly?

“It has,” Brij replies. He explains: “When we acquired Dudley Taylor and Sheppards, there was always an intention of some disposals – but as soon as we acquired those, Covid kicked in. At that point no one wanted to start selling businesses, so we kept them. But when you buy a group of 50 or 60 stores, you don’t intend to keep all of them.

“And then the Lloyds’ disposal happened, that changed the dynamics of the market so we kept the pharmacies. But now the opportunity has come so we’ve disposed of a number of shops while I was sales and purchasing director.”

Beyond that he can tell me little; the chain’s future plans “are obviously not shared with me anymore because I’m not part of the team”.

‘Independents are resilient’

What he can share is insight on a shifting market. “Since the Lloyds’ disposals, you can see the market share of independent pharmacies versus corporates has gone up; independents and small chains are growing stronger, that’s a no-brainer.”

But despite these gains, business owners are reeling from the financial constraints of the 2019-24 deal for pharmacies in England, which dragged on until April this year after last year’s general election put funding talks on ice.

Of course, there is the recently announced deal for 2025-26, but like many in the sector Brij is ambivalent.

It promises a large cash increase “but then we haven’t had any for the past fi ve years – and the five-year funding was lower than before”.

What concerns do members come to him about? “Recently, it’s all been about cashflow: that the NHS income is less than their supplier fees.

“Salim and I both get constant calls about what’s happening and then we try to help them out and make sure that they’re running efficiently. There are many independents out there sitting on a lot of stock.”

Reducing stock holding helps, he argues. “We do deep dives for many of our members.

We look at their accounts, procurement, staffing ratio – are they overstaffed or not– and any inefficient processes like free deliveries.”

He sees some signs of progress in the new settlement but adds: “It was a bit disappointing to see that the £800m retained margin has only gone to £900m – my calculation was that it should be over £1.1 billion.”

However, “independents are resilient”. He believes “they will pull through” and says the new, refocused Avicenna is on hand to support its members, who number over a thousand.

This means helping them grow their business on a number of fronts. He elaborates: “There are two parts: NHS and private business. The private market is growing and we need people to embrace private services.”

Is this where he sees financial stability coming from? “Absolutely. Gone are the times when we can give out stuff for free. The reason that happened was because there was margin in the game, but there isn’t anymore. You can’t do free deliveries and that kind of thing.”

He acknowledges that in some parts of the country “fierce competition” means there is greater pressure to provide free deliveries or dosset boxes – and that nursing homes are a special case – but having introduced delivery charges in the Avicenna chain before the Nafinco buyout he says that “people understand”.

“However, we’ve been hovering around 95- plus per cent of our income relying on the NHS and the rest of it split between over the counter (OTC) goods and private services. We need to increase that percentage. That’s where I see the survival of the fittest coming in.”

Does his choice of words suggest he envisages a Darwinian shrinking of the network? Not necessarily, he replies: “I think the only reduction you’re going to see is from the larger chains, people who are funded by investors. The family businesses will survive.”

He believes shareholder-backed corporates won’t have the patience to weather a difficult business climate like family owners with skin in the game, adding: “Obviously there’s still a big brand on the high street which is up for grabs by independents.”

Creating efficiencies

What specific advice does he give to members on growing OTC and private services into major revenue streams? “First of all, you need to make sure you know whatever items you’re doing, you’re going to get growth year-on year because of other pharmacies closing, everyone’s seen that.

“You need to maximise efficiency in doing that, and there’s technology out there to help you do that. Now, where is time spent? There is procurement, and that’s two-fold. One is the process of procurement itself and the second bit is maximising the margin available to you, and that is very important.”

 The Drug Tariff is “very archaic,” he says. “Why is there a 20 per cent deduction on generics? In the past there were huge rebates coming from suppliers. That doesn’t exist anymore but we’re still penalised for it.”

He comes across people who claim they have “bought better than the tariff” but for him “that is not a valid statement. They need to look at the net Tariff.”

“The third piece – with the highest revenue – is NHS services. After the MUR debacle, some members were a bit reluctant to join the bandwagon, as in that case unfortunately many pharmacies started maxing out and the government took that funding away. But there are other services now and we need to embrace and promote them.

“Then you’ve got OTC. I’ve been in many pharmacies in Europe where you can see it’s very clinical, but there are some pharmacies here that still sell items that may not be appropriate. It takes space and with my Sainsbury’s background I think the return on space and the value of what’s on the shelf is very important.”

What inappropriate things does he see on pharmacy shelves? “There’s a whole range,” he replies, citing some examples from branches Avicenna acquired. “We’ve had bin bags and washing up liquid – and one pharmacy we acquired in the summer period had a whole section on Christmas cards and gift sets with the price tags faded.”

It’s not helpful, he says. “You can have the clinical excellence behind the counter, but the perception of the patient when they walk into the pharmacy needs to be professional. That doesn’t mean everyone should go and do a massive refit.”

He talks about having to train members and change their behaviour: “They need to appreciate that premium space and put stuff there related to engaging with the customer – health-related stuff that triggers advice.”

Another area where Avicenna offers support is regulatory compliance. “When I worked at Sainsbury’s, I saw inspectors were spending minimal time in Sainsbury’s or corporates because they knew the SOPs – they were the same in all 100 shops, all they did was check compliance.”

“The thing is, it’s not a competition. We’ve had many success stories where the GP works well with the pharmacist and vice-versa.”

“Thinking holistically, can we do something in terms of a call to action if we align some of the incentives? We recently heard that there was funding available for GP infrastructure; pharmacies never considered that because they’re always seen as an outsider.”

Why not “co-own” the patient, he opines. That means reviewing current incentives like activity payments, which he describes as a “tick-box exercise” rather than emphasising patient outcomes.

“There’s a lot of noise about blood pressure testing at the moment, about pharmacies not doing enough ABPMs. What about those patients who the pharmacist has referred straight to A&E? They’re not accounted for – but we’ve saved a life there, we bypassed the ABPM because the reading was so high.

“They come back with letters of thanks saying we saved their life, but when it comes to crunching the data the only two measures are how many checks you’ve done and how many ABPMs. Pharmacies probably spend more time with those patients before they refer them, but there’s no way we can log that.” What needs to be done to change this?

“Things are drafted in silo; the people who make decisions need to sit together and think about the patient before they think about the money. They can revise drafts, so to speak, it doesn’t have to mean revising the whole contract, it could start with small steps.”

A new chapter

And what are his main ambitions to drive the business forward? “My main aim is to get all members to a certain level where they can remember why we came into this profession,” he replies.

“No one became a pharmacist to make huge amounts of money,” he maintains. “But now things are so bad that contractors are struggling to pay the bills.”

He goes on: “People will need to think about money, and in those instances it’s easy for a third party like Avicenna to look into their pharmacy as members – they allow us – and then we can evaluate the priorities they need to focus on.”

Asked to sum up his one key message for the sector, Brij replies: “It’s a new chapter of Avicenna – and we’re here to help.”

Brij’s tips for ordering

• “Don’t order for the shelf. Many people order just in case a person comes back. You’re getting daily deliveries, don’t hoard stock. Before you know it you’re stuck with it.

• “Delegate. It can be tricky to persuade pharmacist owners, but delegating operations like regulatory compliance and procurement means they can oversee things. If they try to get their hands dirty it becomes a bit of a struggle.

• “Look for efficiencies. In every pharmacy I’ve been to I can spot an efficiency. The main thing I’ve noticed is putting the fast movers next to the assembly area, but failing to review those top 50 lines as trends change.”

• “Even suppliers make mistakes. We help members create efficiencies on the ground so they always see if something is missing or damaged. Unless they know the price of all 25,000 SKUs off by heart, it’s very difficult to see if that’s been incorrectly priced. Software can tell you if there’s something wrong.”