Pat*, a contractor in England, has spent more than £30,000 on extra staffing costs during the Covid-19 pandemic and around another £30,000 on medicines deliveries. Over the same period, his pharmacy has lost £60,000 in revenue and seen wholesale costs increase by between 11 and 20%. Now, he is faced with the tough decision of selling or shutting up shop.
‘When you’re having to undo the envelope that says how much you’re getting paid by the NHS and your hands are shaking because of how small the numbers are, that is stressful,’ he said.
‘While the business still has some value, I need to sell. It’s quite clear that the future of pharmacy over the next five years is uncertain.’
Pat’s* story is not unique. Two thirds (67%) of 66 contractors responding to the Pharmacist’s Covid pressures survey said their pharmacy had lost revenue since the first UK lockdown in March 2020 – and 42% told us they had needed to borrow funds to stay afloat. Over half (53%) of respondents also said their pharmacy was at risk of closure in the next few years.
This comes as discussions as to whether pharmacies will have to pay back the £370m Covid funding – provided by the Government to the sector last year – remain ongoing. The advance payments were described by respondents as having made a difference to the cashflow pressures they faced, but if forced to pay back, the consequences could be ‘devastating’.
For Pat*, the pressures of the Covid pandemic and the uncertainty as to whether this money will need to be paid back has been a contributing factor in his decision to sell up.
‘It’s been quite emotionally draining not knowing if we will end up losing lots of money. We are already short thousands and thousands of pounds which we’ve used to pay increased wholesaler bills,’ he told the Pharmacist.
‘It’s great that they initially gave us more money, but now they want it back…I’ve had to spend that money on extra staff, extra drugs – where is the money to pay them back going to come from? The money has been spent; it’s gone.’
The Pharmacist’s survey ran from 2 March to 12 April 2021 and asked contractors about the impact of the pandemic on their pharmacy’s finances since the first national lockdown.
It follows months of warnings over the precarious financial situation the sector is facing: Last September, an analysis found almost three-quarters of independent pharmacies in England could be forced to close by 2024. In February, PSNC chief Simon Dukes warned of the ‘real and growing concern’ of closures – as 200 pharmacies were found to have closed during the pandemic. A month later, pharmacists in England began protesting in the constituencies of ministers over the Government’s failure so far to write off the £370 Covid debt.
Pharmacies have received some support during Covid: payments for opening on some bank holidays in 2020, £300 to cover the cost of installing a Perspex screen, and some renumeration via the pandemic delivery service. A £15m uplift for Category M was introduced in June to help tackle cashflow problems caused by the inflation of medicine prices. And Government figures show contractors have so far claimed over £18m in PPE reimbursements.
But it simply has not been enough. Ahead of the Spring budget – which made no mention of pharmacy – PSNC warned that pharmacies’ Covid costs were standing at ‘£400m and rising’. Respondents to our survey said they had outlaid thousands on covering the costs of PPE, staff absence and extra medicines deliveries. Contractors reported losing out on revenue of anywhere between £5,000 and £1.2m, and many shared the sentiment of feeling ‘hung out to dry’ and left without the support they needed from NHS England and the Government.
The majority (82%) had seen wholesale medicine costs increase over the last year, with around half (52%) reporting an increase of between 5 and 10%, just over a third (35%) seeing a rise of between 11 and 20%, and 10% facing bills over 20% higher than normal.
The survey also found that 59% of respondents had faced stock shortages that were ‘worse than normal’, while 41% said they were ‘about the same as pre-pandemic’.
One respondent commented: ‘Some wholesalers have taken advantage of the Covid crisis and increased the prices to DT [drug tariff] prices, without giving extra discounts for a short period – and discounts have also been reduced ever since when purchasing stock.’
Another said: ‘Quota issues have been a problem. Wholesalers not letting us have the stock because we have “received our quota”. Trimbow, Ultibro, and Fostair [were] the main culprits.’
Others were more positive, with one commenting that their wholesalers had ‘generally been very good and supportive, although frequency [of deliveries] necessarily reduced’.
‘Constrains on reparation’
There has also been a human cost. The loss of colleagues and patients. Long hours with no respite. Working at reduced capacity as team members necessarily took time off to isolate.
The majority (82%) of 99 respondents who answered a question on mental wellbeing said the workload pressures of the pandemic had impacted their mental health, with staff citing ‘relentless’ stress, ‘tremendous pressure’, disrupted sleep and ‘not enough time to wind down’.
On staff absence (100 respondents), the survey also found:
- Almost a third (32%) had needed to take time-off to self-isolate.
- More than two-thirds (69%) said a few individuals in their team had needed to isolate.
- A fifth (21%) said most of their team had been off at different times. Two respondents said their pharmacy had needed to close for a period due to staff absence.
- 11% had tested positive for Covid, 15% had experienced symptoms and believe they had contracted the virus, and three-quarters (74%) said they had not tested positive.
Commenting on the findings, Simon Dukes, PSNC chief executive, said that the financial and workforce pressures experienced during the pandemic have been ‘the toughest that community pharmacy has ever faced’.
‘The Pharmacist’s findings match our own monthly surveys and data collection from the past year, which we have stressed to HM Government. While it has been encouraging to see some of the mental health support for NHS workers extended to pharmacy teams, HM Treasury and others have appeared determined to constrain the amount of reparation that is offered to pharmacy businesses and PSNC is still battling to overcome this,’ he said.
Andrew Lane, chair of the National Pharmacy Association, said the data was ‘further evidence of the hit pharmacies have taken’ during Covid, both in terms of finances and staff wellbeing.
‘The NPA is keeping up its campaigning in key constituencies for Covid costs to be fully reimbursed. This week I personally joined the NPA battle-bus in Boris Johnson’s constituency, reminding him of the promise he made to treat pharmacies fairly,’ Mr Lane said.
‘A failure to keep this promise would be a slap in the face for people working unstintingly to keep people well during the pandemic.’
Sandra Gidley, president of the Royal Pharmaceutical Society (RPS), said pharmacy teams had faced ‘unprecedented pressures’ throughout the pandemic, including increased workloads, new ways or working, and playing a leading role in the vaccination effort.
She added: ‘We have been consistent in our messages to governments across England, Scotland and Wales that the dedication and hard work of pharmacy teams over this period has to be recognised. This means that adequate and sustainable long-term funding for the community pharmacy sector must be in place.
‘There must also be support available to any member of the pharmacy team whose mental health has been impacted by the pressures of the pandemic.’
A spokesperson for the Department of Health and Social Care (DHSC) said: ‘Community pharmacies make an important contribution to the NHS and have gone above and beyond in response to Covid-19 to serve their communities, including playing an important role in our vaccination programme.
‘To help them tackle this global pandemic we have made £370m available in advance payments to support pharmacies in maintaining medicine supplies and providing health advice.’
They added: ‘Discussions are ongoing with the PSNC about reimbursement of Covid-19 costs incurred by community pharmacies and repayment of the £370m.'