By Luke Sisley, Senior Business Intelligence Analyst, CSL
What is the current situation?
2022 was a tough year for the health industry, and community pharmacies have been no exception. Like the rest of the health industry, pharmacies have had to deal with the lasting effects of the COVID pandemic, the economic downturn, supply issues and policy pressures.
In this article, we summarise the developments and challenges facing this integral part of the healthcare industry at the end of 2022 and discuss how these may evolve through 2023 and beyond.
The recent financial challenges facing community pharmacies has had ample news coverage. The PSNC highlights that pharmacies have faced a 30% real terms funding cut in the last 7 years, which has caused cashflow issues for many in the sector. We are already seeing these financial issues impact services: last year there was a net decrease in the number of pharmacies by 110, and data from NHS England shows that there were 24,601 unplanned closures in the year to October.
There have been numerous calls for support, such as the recent joint letter to the Secretary of State for Health, issued by the PSNC,along with other representative bodies and the four largest pharmacy chains in England.
So what relief will come to the sector in 2023? So far the response has been limited to a £100 million excess margin write-off, allowing the sector to keep an additional £100m that would have been paid back to the government earlier in the year. However, this is still far off the £400 million support package requested by the sector. The government is currently in talks with the PSNC, and time will tell if the government steps in to offer more financial support.
Shortages and supply
There has been much coverage of the Penicillin shortage in the media recently. The antibiotic is essential in the fight against Step A, with the recent outbreak resulting in the deaths of 26 highlight the issue. While the Department of Health and the Prime Minister insists that there are no shortages, pharmacy leaders and professional organisations report shortages of medicines such as Penicillin and other antibiotics. At this time, it looks like any government-led solution to the shortages is unlikely unless industry bodies can change attitudes, meaning that the situation may worsen throughout 2023.
Shortages have not only impacted material supply, but also workforce. Recent analysis revealed a shortfall of more than 3,000 pharmacists. Recommendations to the government include a fully funded pharmacy workforce plan. However, it is unclear how the government will respond to these recommendations.
Given the recent pressures facing Hospitals and GP clinics, it is no surprise that NHS England is keen to ease pressure by directing more people to visit community pharmacies. NHS England has recently signed a four-year, £28.6m media marketing campaign, on the basis that pushing patients to the community pharmacy “could save the NHS up to £640m annually”.
However, despite the potential savings, there is no sign of a fully-fledged national Pharmacy First scheme in England. As local schemes continue to show how successful Pharmacy First schemes could potentially be if rolled out nationally, it may be that the economic situation along with the operational challenges facing the NHS push the government to fully roll out such a scheme across the country out of necessity. We have already seen the government expand pharmacy powers to dispense medicines earlier in the year; it will be interesting to see if these powers are further expanded in 2023.
Technology and innovation
Times of economic turmoil can create a sense of disturbance that drives businesses to innovate and adapt, leading to creative disruption. As with other sectors, we have seen the pharmacy industry adapt and integrate new systems and technologies through COVID and beyond. Some key examples include Boots trialling drone prescription deliveries and continued digital transformation.
We should expect the pace of technological advancement and innovation to increase in 2023, as pharmacies look for ways to use technology to improve CX and their bottom lines. As competition from online pharmacies increases, some are expecting community pharmacies to look to mobile technology such as apps.
Further afield, some analysis argues that pharmacies will play a key role in personalised healthcare and the use of genomic data. A vision project developed by the Royal Pharmaceutical Society and the King’s Fund says that pharmacists will play a key role in integrated care – becoming embedded in ICSs, advising other HCPs on medicine-gene interactions and implementing genomic medicine services.