Wanted: More clarity on pharmacy mergers


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By Beth Kennedy
Editor-in-chief

14 Aug 2019

The new English community pharmacy contract includes pledges to make it easier for pharmacy businesses to consolidate. But how could this affect independents, asks The Pharmacist’s editor-in-chief Beth Kennedy

 

To merge or not to merge? That is the question that some contractors will inevitably be asking themselves following the publication of the English community pharmacy contract last month.

In among all the finer details of the ‘landmark’ five-year funding deal in the contract document, this – rather enlightening – little gem was lurking: ‘It remains the case that the funding delivered through the [contract] is still supporting more pharmacies in some places than may be necessary to ensure good access to NHS pharmaceutical services.’

It adds: ‘It is recognised that some pharmacy contractors, particularly those with other branches of their own or a competitor’s pharmacy closely located, could consider it commercially beneficial to consolidate.’

The Government is therefore proposing to make it easier for pharmacy businesses to merge by preventing a new pharmacy from opening where another has closed as part of a consolidation.

It’s not hard to see the intent behind all this. For, despite the Department of Health and Social Care’s (DHSC) insistence that it isn’t actively encouraging mergers, it seems to me pretty clear that they would be welcomed if consolidations were to reduce the pesky ‘clustering’ of pharmacies on high streets that the Government has griped about in the past.

There are several things to consider in all of this. First and foremost are the practicalities. After all, how would two or more pharmacy teams, each with their own SOPs, workflows and, potentially, expertise fare working as one? And what of the physical space it would take to house more than one team in a single, likely cramped, pharmacy premises?

After being questioned by The Pharmacist on the finer points of mergers, the DHSC replied that contractors wishing to merge must show they can still meet patients’ needs, including that their consolidated team and premises will be able to produce the same output as when they were separate businesses. That’s all well and good, but it could not elaborate when asked for more details.

And this is where the thinking behind pharmacy mergers seems to fall down. An increase in pharmacy mergers may be perfectly benign – it may even prove to be a positive. But without much to go on, it is difficult to judge if this is to be the case.

The saying goes that the devil is in the detail. Well, there seems to be very little of that at present. It’s time for clear and comprehensive information on pharmacy mergers, and it’s time for it now.

 

Would you consider merging with another pharmacy? Tweet us your views @Pharmacist_News or email bethkennedy@cogora.com


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