As many as three thousand pharmacies may be forced to close in the coming years as high inflation compounds the effects of multi-year frozen funding, academics have warned.

Professor David Taylor of University College London teamed up with LSE health economist Panos Kavanos on a new report commissioned by the National Pharmacy Association titled Protecting UK Public Interests in Community Pharmacy.

Following on from previous research from EY indicating that three quarters of independent pharmacies could be operating in a deficit by 2024, they found that the real-terms value of the funding contract in England is 25 per cent lower than in 2015, with community pharmacy now accounting for “a lower percentage of total health spending than at any point since 1948”.

The paper issues a stark warning: “The cumulative impacts of inflation could well mean that several thousand pharmacies will soon be forced to close.

“An ‘over-the-cliff’ drop in pharmacy numbers would disrupt NHS medicines supply and damage prospects for extended clinical services in the community setting.” 

In a press briefing this morning to discuss the report, Professor Taylor estimated that up to three thousand pharmacies may be forced to close as a result of ongoing financial pressures.

He told Pharmacy Network News that in recent years policy makers have imposed a “narrow idea of efficiency” on England’s pharmacies, a tendency he characterised as being at odds with ambitions to deliver more clinical services.

“Central decision makers” have focused on hospitals and general practice at the expense of other providers, he added.

The report notes that the overall number of community pharmacies in England has fallen by roughly since 2018, or five per cent.

It states: “The underlying, rarely publicly articulated English policy goal appears to have been to force community pharmacy closures while encouraging mechanisation of the dispensing process.”

“The factors that have so far prevented a much more rapid decline in pharmacy numbers have included the fact that temporary additional payments were made available during the Covid pandemic and the willingness of some pharmacy owners to accept reduced incomes and increased debt.”

NPA chief executive Mark Lyonette said: “Inflationary pressures are depleting the already limited funds provided by the NHS for pharmacy services. Our members are facing a cost-of-doing-business crisis that is standing in the way of service improvements and ultimately threatens pharmacy closures on a disastrous scale.

“By asking two distinguished academics to examine the extent of this emergency, we now have independently compiled data that we hope will underpin realistic financial settlements for pharmacies that sustain vital health services.”

Professor Taylor added: “After almost a decade of cuts and flate rate fee funding with no allowance for increasing costs, there is a serious crisis in England.

“This represents an existential threat to NHS community pharmacy.”