Health $ Lifestyle

How new online chemists backed by the NHS could put your local pharmacist out of business

A rise in overheads and a shortfall in the amount they are paid for dispensing medication means record numbers of pharmacies are closing their doors.

But, a Good Health investigation has identified another threat: the ever-growing number of online pharmacies.

These should provide services nationally, but some are now delivering only to specific areas, putting local bricks-and-mortar pharmacies out of business.

While the number of community pharmacies dropped by 673 between 2015 and 2023, the number of distance-selling pharmacies, which are online pharmacies contracted to the NHS to issue prescriptions, increased by 247 during the same period.

Distance-selling pharmacies, or DSPs, which do not offer the option of meeting patients and benefit from lower overheads, should not target areas where physical chemists are already in operation. 

A rise in overheads and a shortfall in the amount they are paid for dispensing medication means record numbers of pharmacies are closing their doors

A rise in overheads and a shortfall in the amount they are paid for dispensing medication means record numbers of pharmacies are closing their doors

Last week, the role of pharmacists was expanded further under the NHS-backed Pharmacy First scheme

Last week, the role of pharmacists was expanded further under the NHS-backed Pharmacy First scheme

This is to try to safeguard bricks-and-mortar pharmacies — which are increasingly being relied upon to offer more services, taking the pressure off hospitals as well as family doctors.

Last week, for example, the role of pharmacists was expanded further under the NHS-backed Pharmacy First scheme. 

Pharmacists can now treat ailments such as earaches, skin infections, basic urinary tract infections and shingles — and are permitted to issue antibiotics.

But worryingly, a Good Health investigation has shown that, from 2015 to 2023, 155 local chemists closed where 11 online pharmacies were now serving the area.

DSPs advertise online but are also found on the NHS app, which encourages patients to register with them as their provider of choice — as they increasingly do.

NHS data showed that, in 2021, 53 million prescriptions items were issued by DSPs in England, up from 29 million in 2019.

While DSPs are meant to dispense medication to anyone, anywhere in the country as part of their NHS contract, our investigation showed that many were refusing to serve patients outside their local area.

When a reporter approached a sample of 11 DSPs, eight of them said they only delivered locally.

And while bricks-and-mortar pharmacies can only open in areas where there is a need, DSPs do not need to meet this requirement. 

Some fear that this means the situation will only get worse as online pharmacies open wherever they want.

Taiwo Owatemi MP, of the All-Party Pharmacy Group, says it is patients who will lose out. 

She told Good Health: ‘The danger is that unfair competition is impairing patient care, because community pharmacies cannot compete, and have to close.

Taiwo Owatemi MP, of the All-Party Pharmacy Group, says it is patients who will lose out

Taiwo Owatemi MP, of the All-Party Pharmacy Group, says it is patients who will lose out

The Company Chemists¿ Association (CCA) has accused NHS England of turning a ¿blind eye¿ to the threat posed by DSPs

The Company Chemists’ Association (CCA) has accused NHS England of turning a ‘blind eye’ to the threat posed by DSPs

‘This damages face-to-face health services in that area. This is only going to get worse if we have unfair market competition between physical pharmacies and DSPs.’

She wants the NHS to crack down on DSPs targeting local areas and refusing to serve patients nationwide, and to pause any new DSP contracts until the situation has been dealt with.

The Company Chemists’ Association (CCA), which represents chains such as Lloyds Pharmacy and Boots, has accused NHS England of turning a ‘blind eye’ to the threat posed by DSPs.

Malcolm Harrison, the CCA chief executive, said: ‘Pharmacies in England are closing at an alarming rate, almost 1,000 since 2015, and these rogue businesses are making matters even worse.

‘What is more, patients can no longer access the services, care and advice from their local community pharmacy if it is put out of business by these traders.’

All pharmacies are paid to dispense NHS prescriptions and are reimbursed at a fixed price for the medicines they source and issue.

As part of our Save Our Local Pharmacies campaign, Good Health has reported on how pharmacies are, in some cases, being reimbursed for less than the cost of medicines, because the payment scheme has not been overhauled since 2015. At the same time they’re finding their overheads spiralling upwards.

They have found themselves increasingly on the frontline as the NHS looks to ease the pressure on GPs and hospitals, and are being promoted as the first port of call for the treatment of minor ailments.

Janet Morrison of Community Pharmacy England said local pharmacies are ‘under significant pressure’ with some ‘reporting record losses’.

She added that, while initiatives such as Pharmacy First will ‘offer some extra funding, this funding is meant for pharmacy-first services specifically’.

‘This will not address the underlying funding deficit in the sector. Finding the capacity to deliver [these initiatives] will be a real challenge,’ Janet Morrison said.

And it’s not only community pharmacies that are at risk. Last year, 244 supermarket pharmacies were expected to close, with the NHS budget for the sector frozen since 2017-18.

Distance-selling pharmacies, or DSPs, which do not offer the option of meeting patients and benefit from lower overheads, should not target areas where physical chemists are already in operation

Distance-selling pharmacies, or DSPs, which do not offer the option of meeting patients and benefit from lower overheads, should not target areas where physical chemists are already in operation

Meanwhile, an investigation has identified DSPs, which are regulated by the General Pharmaceutical Council, breaching a central part of their contract.

They are meant to deliver medicines anywhere in England by post or courier free of charge, so they are not in unfair competition with bricks-and-mortar pharmacies with much higher overheads.

NHS data analysed by the CCA showed that 72 per cent of DSPs deliver more than half of prescriptions within ten miles of their warehouses. And only 16 per cent of DSPs receive prescriptions from more than one postcode area.

The 11 distance-selling pharmacies approached by Good Health were chosen because NHS data showed nearly all of their prescriptions were issued within a single postcode. 

Malcolm Harrison said the CCA believed DSPs were ‘targeting the population in that area to hoover up the business’.

Its analysis, revealed exclusively to Good Health, showed that there have been 155 closures of bricks-and-mortar pharmacies within a ten-mile radius of the 11 DSPs since 2015, although a direct correlation can’t be proven.

One DSP, Docpharma, which is based in Cheetham Hill in Manchester, issued 80,606 prescription items in 2022, but NHS data showed that all the prescriptions came from a ten-mile radius of its registered address.

On the official NHS app, where people can choose their designated pharmacy, Docpharma states: ‘We offer free prescription delivery within three miles of M8 Manchester’. This is despite the NHS insisting deliveries must be free nationally.

The official NHS app allows people to choose their designated pharmacy

The official NHS app allows people to choose their designated pharmacy

When a reporter called Docpharma to ask if it could supply a patient in London, the assistant said ‘no’ and that it was ‘we only in the Manchester area’.

The CCA says 56 pharmacies within a ten-mile radius of Docpharma have closed since 2015.

Another distance-selling pharmacy, Advantage, based in Leeds, rebuffed an online application from a patient outside of the city. The automated response stated that ‘online prescription is not currently enabled for your branch’.

This is despite the fact that the DSP’s website states Advantage ‘is focused on providing free prescription collection and delivery service anywhere in England’.

The DPS issued 40,240 prescription items in 2022, according to NHS data, and 98 per cent of those came from a ten-mile radius. 

The CCA estimates that 30 local chemists have closed with a ten-mile radius of Advantage since 2015.

The provision of brick-and-mortar chemists is particularly important for the elderly, people who do not have access to the internet and those without private transport.

The CCA estimates that 30 local chemists have closed with a ten-mile radius of Advantage since 2015

The CCA estimates that 30 local chemists have closed with a ten-mile radius of Advantage since 2015

Malcolm Harrison said the CCA had repeatedly raised this issue with NHS managers, but claimed that ‘no action had been taken’.

A General Pharmaceutical Council spokesman said: ‘Our targeted inspections of pharmacies have resulted in the identification of serious patient safety concerns in connection with some online pharmacies and online prescribing services.’

The council added that 69 ‘enforcement actions have been taken since April 2019, against ‘online activity’ ‘ — although this related to problems such as the ‘inappropriate prescribing, dispensing and supply of prescription-only medicines.’

An NHS spokesman said: ‘Distance-selling pharmacies are required to deliver medicines to anyone who requests them anywhere in England, and where there is evidence that a company is failing to do so, it will be investigated by the local NHS and appropriate action taken.’

Docpharma manager Shaheen Chaudry said: ‘We aim to comply with all regulations relating to our distance-selling contract.

‘We will be reminding all staff and locums of the pharmacy’s obligations in terms of providing nationwide coverage and will also review our promotional materials with a view to correcting any errors.’

Advantage did not respond to a request for comment.

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