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Big developments at Pharmacy2U, which in January announced it was dipping its toes into the care home sector for the first time. 

The UK’s biggest online pharmacy has bought Coventry-based Care Quality Pharmacy, signalling a continued appetite for acquisition following its takeovers of rival dispenser LloydsDirect and pet medicine company PharmPet.

Care Quality Pharmacy – whose co-founders are staying on to run operations – was bullish at being bought out, describing the move as an “important milestone” that will accelerate growth. Prescription figures have already been rising steadily at the business, which in September 2025 topped 100,000 items for the first time. It no doubt hopes to get an even bigger bite of the apple through this merger.

Pharmacy2U chief executive Kevin Heath was no less triumphant, commenting: “This acquisition is an important step in delivering Pharmacy2U’s growth strategy and is fully aligned with our approach of partnering with high quality businesses that leverage our scale and core competencies.”

There is certainly a large market to tap here. NHS Business Services Authority statistics show that as the UK population ages, the number of care home patients aged 65 and older is steadily growing, with 331,000 residents receiving NHS prescriptions in 2024-2025 compared to 323,000 the year before.

The number of items dispensed to this group also continues to climb, with 42 million representing a five per cent jump on 2023-2024 figures.

These patients need their medicines, and the backing of a major player like Pharmacy2U will no doubt help the team at Care Quality Pharmacy invest in operations and deliver a service its users value.

But is the central business model looking increasingly vulnerable? Two significant players in the care home dispensing sector have gone into administration in recent memory. 

When any business becomes insolvent there will be a complex array of interrelating factors behind it, unique in every case. But the constant refrain we’re hearing from across the sector is that chasing high numbers of items can be a dangerous game these days, and delivery-based models are necessarily reliant on items.

Meanwhile, it’s no secret that Pharmacy2U struggles to make a profit despite handily breaking its own revenue records every year. Its recently published 2024-2025 accounts show that while it grew annual revenue by 68 per cent to £334 million, the company incurred a £5.7 million loss before a tax credit was applied.

Its directors don’t sound too concerned in their latest annual report, suggesting (I’m paraphrasing) that it will continue on its merry growth path and that private prescriptions and services will help to broaden its income streams.

That certainly sounds like a smart move. My only concern is whether the downward pressure on items reimbursement – which affects all pharmacy businesses, let’s not forget – and the high costs involved in posting prescriptions and patient acquisition will leave businesses like these looking more exposed in the years to come.