The growth of pharmacy prices was 'significantly' lower in 2018 compared to previous years, according to a report by real estate experts has predicted.
A report from Christie & Co revealed that 'movement in average prices in the sector continued to grow, albeit at a significantly lower rate than previous years, at 2.8%'.
The report also highlighted a higher prevalence of pharmacies for sale last year in England compared to previous years. This is due to a combination of the impact of the Government’s cuts to pharmacy funding, reductions in category M prices and supply and pricing issues, the report said.
In October, Christie & Co and Hutchings Consultants told The Pharmacist that pharmacy is still a ‘sellers’ market’, with ‘demand continuing to outstrip supply’, despite a lack of extra funding.
Challenging year ahead
The report showed that the first half of 2019 will ‘remain challenging’ for the independent pharmacy market given issues such as a decline in category M prices and uncertainties around Brexit.
In October, the Pharmaceutical Services Negotiating Committee (PSNC) announced that contractors will be hit by a category M clawback of £10m a month between November and March to repay the excess margin earned by pharmacists over the past few years.
In addition, the value of the pound post-Brexit, which is likely to affect imports and prompt drug manufacturers to increase their prices, could ‘ultimately’ affect retail pharmacies, the report said.
But Christie & Co remains confident that PSNC will be able to secure a more supportive funding deal for 2019/20, maintaining a strong buyers’ appetite in the market, it said.
Overall, there was a growth in the number of buyers looking to acquire a pharmacy in 2018, the report said. It recorded an 11% rise in the number of pharmacy applicant registrations while around 80% of buyers were registered as first-time buyers or new entrants to the market.
Christie & Co head of pharmacy Tony Evans said: ‘Despite the challenges faced by contractors and the uncertainty surrounding Brexit, we continue to see positive activity in the sector across the UK.
‘As anticipated in our review, we have already seen a number of instructions generate early interest in 2019 and expect this to continue as the year progresses.’