‘Better off as a window cleaner or an Uber driver’ – the pharmacists taking on six-figure debt to stay in business

A crisis is spreading through community pharmacy, leaving many pharmacy owners reaching into their own pockets to stave off permanent closure. Allie Anderson hears from people on the frontline who are buckling under the financial pressure

When Community Pharmacy England agreed a new settlement for the sector for 2025/26, it heralded the first significant uplift in core funding for almost 10 years.

With baseline funding of almost £3.1 billion, a further £215 million for Pharmacy First, blood pressure and contraception services, and an increase in the medicines margin limit to £900 million, you could be forgiven for thinking the sector had turned a corner.

But for many, the picture is far from rosy. In fact, some pharmacy owners are finding themselves in dire straits, having to take on debts just to stay afloat.

Recently, The Pharmacist polled more than 300 readers on key issues affecting the sector. As part of the survey, 43 pharmacy owners answered questions about financial hardship. Many spoke of measures they’ve had to take to keep their businesses going – from borrowing money from friends and family to repeatedly dipping into savings accumulated over decades. And 26 said they’d resorted to remortgaging their property or taking out a bank loan to support their community pharmacy.

Six-figure borrowing

AJ* is a superintendent and pharmacy owner based in the southwest. He says he is ‘just managing to cling on’, having secured a loan of £100,000 earlier this year amid a gradually worsening financial situation. ‘The money is just disappearing. Rents are going up, day-to-day living costs are going up. That’s without paying people’s wages,’ he comments.

‘I have some rental income from residential property, and I’ve had to pull more money out of it just to ease cash flow. Without that, I don’t know how we’d be able to carry on. This pharmacy is 100% in massive negative equity – who would run a business in negative equity that’s making a loss?

‘I’ve been left thinking, would I be better off being a window cleaner or an Uber driver?’

So tightly has AJ had to adjust his belt that his once thriving group of 10 local pharmacies has been whittled down to a single premises.

Related Article: Deprescribing: The pharmacists' role in stopping inappropriate medications

And he’s not alone, as a National Pharmacy Association (NPA) survey has highlighted. The poll of 600 independent pharmacies conducted in July found more than 60% are ‘teetering on the brink’ and face closure in the next year. This is on top of the 400-plus that shut their doors for good in 2023 – nearly five times more than in the previous year.

Cash for services

It’s a trend that’s unfolding around the country. A few hours up the M5 is Peter*, who like AJ, has reduced the number of branches he operates. Some were sold off in a strategic move, allowing him to focus on two high-volume pharmacies that also generate a significant amount in extra services, and yet Peter has also racked up a six-figure overdraft ‘just to see us through’.

‘It’s no surprise. Things have accumulated over the years as we’ve been waiting for a new contract. How is anybody supposed to manage on a five-year, zero-based contract at a time of a global pandemic, hyperinflation and increases in the national living wage? The money has got to come from somewhere,’ Peter says.

‘I had to increase my overdraft facility to the maximum of £250,000 so we could pay wholesaler bills and for liquidity.’

Peter has been able to generate revenue through additional services, including NHS-funded services like blood pressure management and vaccinations, as well as private services like travel clinics.

‘There might be smaller independents who have driven costs right down to the minutiae, but if you’re running your pharmacy based on volume dispensing, it is loss making. Prescriptions don’t break even,’ Peter adds.

Therein lies a huge problem for many community pharmacy contractors who have been left short-changed, and who place the blame squarely on a decade of underfunding by the government.

Funding gaps

The abolition of monthly practice payments from December 2016 put pressure on some smaller pharmacies.

‘Obviously our funding has been gradually reduced, but the biggest thing was practice payments. Even if you had a bad footfall month, they were just like a rainy-day payment that allowed you to carry on functioning and paying the wages,’ recalls AJ. ‘Taking those away is the sole reason our [smaller] pharmacies closed.’

And while reducing down to a single bricks-and-mortar pharmacy has the benefit of cutting a lot of overheads, it also slashes bargaining power with manufacturers, in turn impacting the medicines margin.

‘As a successful businessman with 10 branches, I could negotiate with wholesalers – I’m buying so much stock, and they give us a discount,’ comments AJ. ‘Now we’re just one pharmacy, they don’t give us as much. But the government is still clawing back the higher discount off our end-of-month payments, which immediately puts us back into negative.’

AJ and others like him told The Pharmacist of the impact financial pressures are continuing to have, not only on their businesses but also on their lives.

‘Something needs to be done’

Across in rural Yorkshire is George*, a pharmacy owner who, four years ago, went above and beyond to provide Covid jabs for members of his community who couldn’t access large vaccination centres many miles away. Where he once provided hope, now there is a sense of despair.

‘We needed to take an overdraft of £50,000 last year, and I am still running the pharmacy every month on overdraft. I can’t break even. The increase in the activity fee is still not sufficient. We are under water,’ he says.

Related Article: Grey-market peptides: what pharmacists need to know

‘I have looked at the accounts and reviewed the figures, but I don’t know where else I can cut, as any further changes will compromise patient safety. I haven’t taken a salary or dividends for the last three years.’

Hundreds are in the same position. Some 60% of more than 800 pharmacy owners who answered Community Pharmacy England’s annual Pressures Survey between January and March said they had not taken a salary in the last year.

‘This is a crucial situation, and something needs to be done,’ George says.

The human toll

Finding themselves in deepening financial hardship, it’s no surprise that business owners are considering their future in a profession they’ve long served and once loved. AJ, a pharmacist for 25 years, is contemplative. ‘I’m thinking how long will I be able to keep going? Maybe a year or two.’

But in the absence of salvation from somewhere, his family life and mental health bear the brunt. ‘You wake up stressed, you go to bed stressed. All the time it’s just constant stress, knowing you’re in arrears and you’ve got loans hanging over your head. It affects your marriage, your family – it affects everything and changes who you are.’

Likewise, Peter is troubled at the prospect of accumulating financial risk at a time in his life when he should be planning ahead for a comfortable retirement.

‘I’ve been a pharmacist for 30 years – a pharmacy owner for 20 – and I have extreme anxiety looking at cashflow and thinking “how can I pay the bills?” It’s very worrying,’ he says.

The sector has support in its corner, with CPE and the NPA taking up arms to fight for fair funding. The latest settlement is a step in the right direction but does not go far enough, say pharmacists – 94% of those polled told the NPA the money failed to stabilise their finances.

Commenting on the NPA’s findings, chief executive Henry Gregg said: ‘No NHS service should be being propped up by the personal savings or mortgages of the individuals running it.’

Related Article: Risks and responsibilities raised by Pharmacy First

And Janet Morrison, chief executive at CPE, spoke of the ‘deeply concerning’ plight of pharmacy owners ‘facing disastrous personal financial situations’ and ‘subsidising NHS services from their own pockets’.

She has also committed to placing the sector’s financial pressures front and centre of the next round of contract negotiations, commenting that she was focused on ‘making the case for change and carving out a better future for community pharmacy’.

For now, though, while AJ contemplates life as a window cleaner or an Uber driver, many like him may also be considering carving out a better living elsewhere.

* not their real names