Does an average pharmacy really make net profits of £180,000? (Mr D. R. Thomas)

Recycling must not compromise patient safety (Mr B. Shooter)

BHARAT NATHWANI responds:

I sympathise with Mr Thomas on his concern about not making £180,000 income from NHS dispensing and essential services. However, the figure is being quoted by the Department of Health and comes from a paper as part of a much larger (and separate) debate about the premises fee.

My letter refers to the average figure used by the DoH. In paragraph 3.4 of an explanatory memorandum to the Medicines (Pharmacies) (Applications for Registration and Fees) Amendment Regulations 2005, it states: “Most pharmacies derive significant income from the NHS. £1,766m has been allocated in 2005/06 for the new community contractual framework in England, an average of 180K per pharmacy.”

The DoH cleverly uses the average figure because it agreed to the new contract which sees vertically integrated multiples getting a disproportionate share of the contract money.

Letters in The Pharmaceutical Journal of 20 November 2004, especially Noel Baumber’s, confirm the skewing of money to multiples. The PJ of 11 December 2004 contained five letters (including one of mine) concerning the unequal distribution of money in the new contract and my letter openly challenged the Pharmaceutical Services Negotiating Committee to justify the imposition of the unequal distribution that would see monies moving from smaller contractors like Mr Thomas to larger, high stress, high volume prescription factories primarily owned by multiples.

Over recent years the NHS has received vast resources to deliver a world class service. However, all that money has not always been spent in a way to deliver a sustainable and equitable return for all stakeholders. Is the paying of huge sums of goodwill (up to £4m per pharmacy) sitting as deadwood on the balance sheet a good use of allegedly short resources? And, with such a large carrying cost for goodwill on the balance sheet, the hiring of extra pharmacists or paying decent salaries and benefits (paid child care, better training, etc) cannot be a viable financial option.

I hope Mr Thomas’s letter, together with my response, stirs rational and mature debate about how money allocated to pharmacy is spent for the benefit of all stakeholders, including individual pharmacists (most of whom are now women), small contractors and large multiples. At the moment money seems to be skewed towards larger multiples that now have an inbuilt majority within the PSNC. This stranglehold of the multiples is not in the long-term public interest nor is it in the profession’s interest.