LloydsPharmacy has announced it is withdrawing all its 237 pharmacies inside Sainsbury’s stores this year resulting in up to 2,500 job losses, as pharmacy bodies call on the government to take urgent action to avoid a ‘catastrophe’.

The pharmacy chain said it has carried out a 'strategic review' of its operations in response to ‘changing market conditions’ resulting in a decision to close its pharmacy services at Sainsbury’s throughout 2023.

Chief executive officer at LloydsPharmacy, Kevin Birch, said: ‘This decision has not been an easy one and we understand that our patients and customers may have questions about how the change will affect them. We would like to thank them for their continued support and assure them that we are committed to providing a smooth transition over the coming months.’

He added: ‘I am very grateful to all our colleagues for their dedication to our patients, customers and communities.’

LloydsPharmacy acquired the 281 in-store and hospital pharmacies from the supermarket giant in 2016 for £125million, transferring up to 2,500 pharmacy staff in the process.

However, it has been selling off some of the pharmacies in recent years, after its parent company McKesson announced in 2021 that it wants to ‘fully exit’ Europe.

LloydsPharmacy is now exploring options for each individual branch and said a timeline and final plans will therefore vary on a branch-by-branch basis.

A statement from LloydsPharmacy said it is working will all colleagues potentially affected and will be supporting them through the process.

It has published information online for patients to help find alternative provision and answer their questions.

The Pharmaceutical Services Negotiating Committee (PSNC) chief executive Janet Morrison said the ‘shrinkage’ by the chain is ‘extremely worrying’ and will put pressure on other pharmacies already at ‘breaking point’.

She added: ‘Community pharmacies have had their funding cut by some 30 per cent over the past seven years and are facing more extreme pressures than ever before. This significant shrinkage by the second largest pharmacy chain is an extremely worrying development and one of the clearest signals yet of just how much all community pharmacies are struggling to make ends meet. We know that many are at breaking point.’

Ms Morrison warned other pharmacies to brace themselves for ‘even more pressures as they try to cope with increased demand’.

She added: “The community pharmacy network is the answer to so many of the health service’s problems, but right now many are struggling to keep going. The sharp decline in their funding combined with workforce and other pressures is making it increasingly difficult to sustain services and impossible to do more.

‘Pharmacies urgently need investment from government to ensure they can continue to offer the services that so many patients rely on and this is why the sector has this week announced its #saveourpharmacies campaign. Without further investment, we believe more permanent closures are likely and this will only increase the risk of serious difficulty for patients’ in accessing services and medicines: Government must not allow this to happen. I am calling on ministers to meet me for meaningful talks to avoid such a catastrophe.”

Malcolm Harrison, chief executive of the Company Chemists’ Association (CCA) said the announcement by LloydsPharmacy will be ‘of concern’ to staff, patients, the public and the community pharmacy sector.

He told The Pharmacist: ‘Policymakers cannot escape the fact that the funding model for community pharmacy is broken.

‘As we and other pharmacy bodies have warned recently, we are at an indisputable fork in the road for the NHS. At a time when general practice and the NHS is struggling with ever-increasing demand, allowing the community pharmacy network to wither and decline will make no sense to patients and the public. Again, we call on the government to act.

‘If new and recurrent funding is not forthcoming, it is very likely that the rate of permanent closures will increase with far-reaching impacts on the capacity and resilience of the pharmacy network.’

Leyla Hannbeck, chief executive of the Association of Independent Multiple Pharmacies (AIMp), said on Twitter that the decision by LloydsPharmacy demonstrates 'the huge financial burden' the pharmacy sector is under, and that emergency funding from government was needed for the sector 'before more pharmacies go under'. 'Enough is enough', she said.

In December 2022, The Pharmacist reported that some pharmacy contractors had been contacted by AAH Pharmaceuticals asking for expressions of interest in purchasing local LloydsPharmacy branches.

The news of the LloydsPharmacy sell-off comes as four leading national pharmacy bodies joined forces to launch The Save Our Pharmacies campaign on 18 January, calling on fair NHS funding for pharmacies in England.

The group, made up of PSNC, the National Pharmacy Association, Company Chemists’ Association, and the Association of Independent Multiple Pharmacies, said it will ‘develop shared resources for effective parliamentary lobbying and mobilising public opinion in the face of chronic underfunding that threatens further pharmacy closures’.