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Details of pharmacy merger investigation released

27 Jan 2016

Details of the scope of the investigation into the proposed acquisition of Sainsbury’s pharmacy business by Lloyds Pharmacy’s parent company have been released.

In the statement of issues, the Competition and Markets Authority (CMA) has laid out the tests they will apply to the merger to ensure it does not result in a substantial lessening of competition.

Celesio AG operates 1,542 pharmacies across the UK through subsidiary Lloyds Pharmacy Limited, while Sainsbury’s owns 277 pharmacy stores.

Although the price of prescription medicines is regulated, the watchdog has identified 78 areas where customers may be affected by a loss of competition, prompting the in-depth investigation.

Areas under scrutiny include the overlap in the retail business, supply of pharmacy services to patients and the supply of prescription-only and pharmacy-only medicines.

The panel will also consider whether the geographical location will affect customer choice.

“When assessing local effects of the acquisition we consider the proximity of a pharmacy to customers and GP surgeries plays a key role in customer choice of which pharmacy to visit.

“Competition between pharmacies and their competitors is therefore dependent on the distance between pharmacies,” the document states.

Sheldon Mills, CMA senior director of mergers, has previously recognised the “important service” pharmacies provide and raised concerns the merger may affect choice, quality and service.

Anyone wishing to respond to the issues statement should do so in writing, by no later than 5pm on 9 February 2016.

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