Part of The Pharmacist’s series of case studies on how cuts to community pharmacy funding are affecting ordinary pharmacists, a Sheffield pharmacy owner explains the impact on their business
Garry Myers, managing director at Shires Pharmacies in Sheffield. He is also the regional representative for PSNC for the east Midlands and south Yorkshire. All views are his own and not those of PSNC.
‘We’ve taken a number of measures to deal with the funding cuts. As the contractor and main shareholder, I’ve had to take a huge cut in my take home pay.
‘I can’t cut the earnings of my staff, so I’ve had to cut my own earnings to prop up the company and reduce our expenditure.
‘The way I did that was to cash in my pension early in order for me to pay off my mortgage so I could cut my earnings by 60%. That was done on the basis of trying to avoid making cuts that would affect patients.
‘However, we have also had to make a series of staff changes. One of my pharmacies has actually had a fairly hefty reduction in staff hours and effectively lost 40-60 hours in a week.
‘Some staff have gone on maternity leave, but we’ve moved other staff around the company to avoid having to replace or rehire other members of staff.
‘For the first time in the company’s history, and for the first time in my 30-odd years as a pharmacy contractor, we’ve also recently made a member of staff redundant.’
‘There’s genuine concern from staff’
‘The other thing I’ve had to do is reduce the amount of money we spend on locums to cover for various different things, and we’re having to work slightly differently to avoid employing locums.
‘Obviously the news that we were having to make a member of staff redundant for the first time was worrying for the rest of our staff. They’re all concerned, and not only that, but it’s well known that other pharmacies are having to cut delivery services and things like that. There’s genuine concern. And that’s against the backdrop of increasing workload. Quite a lot of staff are concerned about where this is going.
‘The other thing we’re having to do is put a lid on capital investment because we’ve just no longer got the capital to be able to do that.
‘We’ve also had to cut our stock investment to free up cash, so going forward if drug prices carry on increasing, it’s going to be difficult for us to continue to easily meet the needs of patients.’
‘Our local population can’t afford extra services’
‘If Brexit becomes a problem, we’re likely to run short of stock more quickly because we no longer have the capacity. There’s nothing left in the tank. The current Government funding levels are just not adequate to meet our needs.
‘In the areas we operate, delivery of extra private services are also a non-starter. The population we serve just don’t have the money to pay for extra services.
‘As a company, we’re completely dependent on our NHS earnings. In at least four of our pharmacies, the percentage of NHS to over-the-counter (OTC) operating income is about 97-98% NHS earnings.
‘The clinical commissioning group (CCG) have implemented a policy of trying to encourage more self care. A lot of community pharmacies see that as an opportunity, but for us it’s not. Where patients are made to pay for medicines they previously would get free of charge on prescription, they either don’t buy them at all, or they buy them from other outlets – supermarkets or online – which sell medicines cheaper than we can buy at.
‘The self-care policy in certain areas just doesn’t work. It’s not an advantage for community pharmacy and it certainly hasn’t generated additional income.
‘The patients around where we are also won’t pay for things like travel clinics and other private healthcare screening clinics. So, there’s no scope for us to diversify.’
‘We can’t afford to replace on of our PMR systems’
‘On our current set of accounts, even after we’ve taken a huge reduction in earnings and made a number of efficiencies, will show a bottom line profit somewhere around half what it was previously.
‘There are certain things we’d like to do that we’re just not doing, for example one of our PMR systems needs replacing and we’re not replacing it because we just don’t have the cash.
‘There’s also a number of concerns going forward. The Falsified Medicines Directive (FMD) is almost certainly going to result in an increase in the price of medicines that pharmacies pay. Based on the way the current funding system works, it’ll take a number of months before the NHS catches up.
‘So, you’ve got the FMD effect, the Brexit effect, and you’ve also got the cost of generic medicines globally and certainly the cost of medicines in the UK is rising. We literally don’t have the cash to stand these increases.
‘I don’t see how pharmacies will be able to continue to survive and to continue to provide medicines to the public in the face of this financial squeeze against the backdrop of Brexit.’