Nearly half of pharmacy owners ‘actively looking’ to buy another pharmacy, survey finds

The latest Healthcare Confidence Index from Lloyds Bank suggests that pharmacists are now more confident in “their sector and business prospects” than they were at the beginning of 2020.

Independent pharmacy

Almost half of community pharmacy owners said they are “actively looking” at buying another pharmacy, according to the Lloyds Bank Healthcare Confidence Index 2020.

The index, which surveyed healthcare professionals with annual turnovers of up to £25m, including 98 pharmacists, also found that pharmacists are now more confident in “their sector and business prospects” than they were when surveyed previously.

The Healthcare Confidence Index has run annually for the past 11 years, with the previous report published in January 2020.

However, Lloyds Bank said that following an “unprecedented year”, it had decided to run a second survey in 2020 to “gauge the impact of COVID-19 on primary healthcare professionals”, which ran between September and November 2020.

The index is intended to measure “how confident healthcare professionals feel about their sector and business prospects”.

Of the three healthcare sectors covered by the survey — pharmacy, general practice and dentistry — only the pharmacy sector saw confidence continue to grow throughout 2020, from -13 in January to -4 at the end of the year, on an index which spans -100 to +100.

Almost three-quarters (71%) of respondents said that over-the-counter sales and prescriptions had risen in 2020 as a consequence of the COVID-19 pandemic.

And 61% said that they expected their profits to increase over the next year. However, a similar number — 64% — said that they also expected financial pressures to increase over the same time frame.

While 43% of community pharmacy owners are “actively looking” to purchase another pharmacy, a further 17% said they were “considering” it.

In the report issued by Lloyds Bank, Sanjay Patel, management consultant and director at Innovate Pharma Service, said that there are “opportunities in the sector”.

Patel added that “while the number of pharmacies in the UK will reduce, the population is both increasing and ageing, so the pharmacies that do survive will be dispensing higher volumes and be more profitable”.

Mike Dent, director of pharmacy funding at the Pharmaceutical Services Negotiating Committee, said Lloyds Bank’s findings are “at odds with the messages that we are hearing from community pharmacy contractors”.

“Four hundred pharmacies have closed since the implementation of funding cuts in 2016, and many businesses are under significant financial strain and are having to take cost-cutting measures that are impacting negatively on patients.”

Gareth Jones, head of corporate affairs at the National Pharmacy Association, said that while the report “predicts that the number of pharmacies in the UK will reduce, as did the Ernst & Young study commissioned by the NPA earlier this year”, community pharmacists “are determined and entrepreneurial, as this report acknowledges, and it’s good if that gives banks confidence in the business of pharmacy”.

The report closed with a warning about the potential consequences of Brexit for the pharmacy sector, with a reported 61% of respondents believing that it will have a “negative impact”.

Martyn Kendrick, UK head of healthcare banking services at Lloyds Bank Commercial Banking, said that while 2020 had been “an extremely tough year for the healthcare sector given its role on the frontline tackling COVID-19”, it was “heartening to see the optimism for the future coming from pharmacists”.

“While many are realistic about the long-term challenges — such as those presented by the growth in online pharmacies — pharmacists have shown real agility, innovation and resilience during the pandemic. This appears to have paid dividends in the immediate term.”

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Citation
The Pharmaceutical Journal, Nearly half of pharmacy owners ‘actively looking’ to buy another pharmacy, survey finds;Online:DOI:10.1211/PJ.2020.20208661