Competition regulator investigates Pharmacy2U purchase of LloydsDirect

The Competition and Markets Authority is investigating the acquisition of LloydsDirect by Pharmacy2U while it considers whether the merger could lead to "a substantial lessening of competition" in markets in the UK.
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Pharmacy2U and LloydsDirect are to operate separately while the Competition and Markets Authority (CMA) investigates the purchase of LloydsDirect, Pharmacy2U has confirmed.

The CMA said on 30 November 2023 that it was investigating the “completed acquisition” by Pharmacy2U of LloydsDirect, which was announced by the two companies on 9 October 2023.

In an initial enforcement order, published by the CMA, it said it was considering whether “a relevant merger situation has been created and whether the creation of that situation has resulted or may be expected to result in a substantial lessening of competition in any market or markets in the United Kingdom”.

It added that, while the investigation was taking place, the two businesses should carry on “separately” and that “the LloydsDirect business’ separate sales or brand identity is maintained”.

It also gave instructions that “no significant changes are made to the organisational structure of, or the management responsibilities within, the LloydsDirect business or the P2U [Pharmacy2U] business”.

Pharmacy2U announced that it had bought LloydsDirect on 9 October 2023, with a joint statement from the two companies stating that the combined company would continue under the Pharmacy2U brand, with changes made “over time”.

The statement said that the move brought together “two of the most trusted and experienced online pharmacies in the UK” and would offer patients even greater accessibility to online pharmacy and healthcare services, taking advantage of the combined expertise.

NHS electronic prescription service (EPS) nominations data for September 2023 showed that Pharmacy2U and LloydsDirect had the first and second highest number of patients, respectively, nominating them as their preferred option for receiving medicines prescribed electronically. Combining the two businesses gave Pharmacy2U 1.4 million EPS nominations at that time.

Pharmacy2U did not say how much it had paid for LloydsDirect, but a spokesperson told The Pharmaceutical Journal at the time that jobs for staff at either company were not at risk.

Commenting on the CMA investigation, a spokesperson for Pharmacy2U said: “On 5 October, Pharmacy2U acquired LloydsDirect into the group, bringing together complementary businesses. Today, the CMA has issued a notice announcing that it is reviewing the transaction and inviting comments from any interested third parties.

“Both Pharmacy2U and LloydsDirect will fully collaborate with the CMA throughout the process and are confident that the CMA will decide to approve this transaction. Pharmacy2U and LloydsDirect will run independently until we receive approval from the regulator. We are committed to continuity and service excellence and our focus is on looking after our patients and our people.”

The CMA has not given a deadline for completing its investigation of the purchase.

Last updated
The Pharmaceutical Journal, PJ, December 2023, Vol 311, No 7980;311(7980)::DOI:10.1211/PJ.2023.1.203389

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