Is This the Worst Situation for Pharmacies in 26 Years?

In Wales, community pharmacies are facing unprecedented financial challenges, with nearly 60% of owners reportedly refinancing their homes or dipping into personal savings to keep their businesses afloat. This dire situation, described as the "worst financial climate" in 26 years by pharmacist Gwawr Jones, raises important questions about the sustainability of pharmacy services in the region amidst rising costs and stagnant funding from the NHS.

Last updated: 30 October 2023 (BST)

What’s happening now

Pharmacists in Wales are increasingly struggling to maintain their businesses due to soaring operational costs and stagnant funding from the NHS. Gwawr Jones, who runs a pharmacy in Y Rhws, highlighted how costs have risen dramatically, making it nearly impossible to operate sustainably. The National Pharmacy Association (NPA) reports that a significant number of pharmacy owners are resorting to personal financial sacrifices just to keep their doors open.

Key takeaways

60% of pharmacy owners in Wales have refinanced their homes or used personal savings to remain operational.
Recent funding increases from the Welsh Government have not kept pace with inflation and rising costs.
Pharmacists are losing money on essential medications, impacting their financial viability.

Timeline: how we got here

The financial struggles of community pharmacies in Wales have escalated over recent years. Key milestones include:

2017: The Welsh Government begins implementing reforms to pharmacy funding.
November 2025: A 4% increase in funding is announced, bringing total funding to £182 million per year.
2023: Reports indicate that four out of ten pharmacies are operating at a loss.

What’s new vs what’s known

New today/this week

The NPA has released alarming statistics indicating that financial viability is declining, with many pharmacies unable to operate profitably. Pharmacists like Tunde Olawoye have reported going into significant debt, illustrating the urgency of the situation.

What was already established

It has been known for some time that community pharmacies in Wales face financial difficulties due to inadequate NHS funding, which has not kept up with inflation. Recent increases, although beneficial, are viewed as insufficient by many pharmacy owners.

Impact for the UK

Consumers and households

The rising costs of maintaining pharmacy services may lead to increased prices for prescription medications and reduced access to essential health services. Consumers might face longer wait times for medications as pharmacies struggle to remain operational.

Businesses and jobs

Pharmacies may have to reduce staff or close altogether, leading to job losses in the sector. The financial strain could also affect the supply chain for medications, causing further disruptions in service delivery.

Policy and regulation

The Welsh Government has acknowledged the crucial role of community pharmacies in primary care but needs to act decisively to address funding issues. Upcoming consultations and potential regulatory changes could shape the future landscape of pharmacy services in Wales.

Numbers that matter

£182 million: Total annual funding for community pharmacies in Wales post-recent increase.
60%: Percentage of pharmacy owners who have turned to personal savings or home refinancing.
£3.06: Loss per box of life-saving medication reported by some pharmacies.
4 in 10: Proportion of pharmacies in Wales currently operating at a loss.

Definitions and jargon buster

NHS: National Health Service, the publicly funded healthcare system in the UK.
NPA: National Pharmacy Association, a representative body for community pharmacy owners in the UK.
CPCF: Community Pharmacy Contractual Framework, the agreement that outlines funding and services for community pharmacies.

How to think about the next steps

Near term (0–4 weeks)

Pharmacy owners are urged to assess their financial situations and explore options for cost reduction. Monitoring government announcements regarding funding changes will be crucial in the coming weeks.

Medium term (1–6 months)

Pharmacies may need to engage with local health boards and advocate for better funding policies. Keeping abreast of governmental consultations will be critical for influencing future support.

Signals to watch

Upcoming government funding announcements and policy changes.
Trends in pharmacy closures or mergers within local communities.
Changes in patient access to medications and pharmacy services.

Practical guidance

Do

Engage with local pharmacy networks for support and shared resources.
Stay informed about funding opportunities and governmental changes.

Don’t

Don’t ignore the financial pressures; act proactively to address them.
Don’t hesitate to voice concerns to local representatives about funding issues.

Checklist

Review current financial status and identify potential cost-saving measures.
Engage with local health authorities to advocate for better funding.
Stay connected with the NPA for resources and support.
Monitor patient feedback on services to identify areas for improvement.
Consider diversifying services to increase revenue streams.

Risks, caveats, and uncertainties

The situation for pharmacies in Wales remains precarious. While the Welsh Government has pledged increased funding, the actual impact on operational costs is still uncertain. There are concerns that without substantial and sustained investment, many pharmacies may not survive the current financial climate.

Bottom line

The financial difficulties facing community pharmacies in Wales are severe, with many owners struggling to keep their businesses afloat. Immediate action from the Welsh Government is necessary to ensure the sustainability of these vital health services, which play a crucial role in patient care.

FAQs

What is causing the financial strain on pharmacies in Wales?

The financial strain on pharmacies in Wales is primarily due to rising operational costs that have not been matched by increases in NHS funding, leading to unsustainable business practices.

How many pharmacies in Wales are operating at a loss?

Current estimates suggest that approximately four out of ten pharmacies in Wales are operating at a loss, highlighting the severity of the financial crisis in the sector.

What actions is the Welsh Government taking to support pharmacies?

The Welsh Government has increased funding for community pharmacies, but many owners feel these increases do not adequately address rising costs and are calling for further action.