Coronavirus and Pharmacy’s Financial Health

May 29th, 2020 Business | General Pharmacy No Comments

The coronavirus pandemic is badly affecting many sectors, such as airlines, non-essential retailers and hospitality businesses. Jobs are at risk and some businesses may never reopen.

Community pharmacy is special in being both a frontline healthcare provider and a retail business.

People need access to medicine either OTC products, prescriptions in-store or through the pandemic delivery service. But pharmacies also need revenue from retail sales to stay open and be able to help their patients.

So, what does the pandemic mean for the financial health of pharmacy?

Pharmacy’s financial health as a healthcare provider

Before the outbreak, Pharmacy was already facing financial difficulties. The government’s objective to reduce the total number of pharmacy counters by a community-crippling 3000 meant funding cuts to the sum of £200M. Many pharmacies were already facing closure and bankruptcy.

Underfunded health providers are less-than-ideal during a disease outbreak.

The pandemic has put an additional financial strain on community pharmacies. There has been an increase in staffing requirements plus a rise in staff burnout and sickness – including from the coronavirus itself.

So, additional funding could make the difference between pharmacies serving the community during the COVID-19 crisis or closing their doors.

The government recognises the importance of pharmacy as a frontline service and made several funding changes:

  • Advance funding to the sum of £350M is available for community pharmacies covering April, May and includes the recently agreed £50M uplift for June
  • Pharmacies can claim a single £300 payment towards the installation of screens and physical barriers (except distance-selling pharmacies). Claims can be made vis the Manage Your Service (MYS) portal.
  • £15M for increased medicine reimbursement prices for June.
  • A monthly allowance for all pharmacies to support medicine deliveries to shielded patients.

But the advance funding is not additional money. Instead, community pharmacies will be able to access their contract funds for 2020/21 earlier than usual. The money will have to be reconciled at a later, yet to be agreed, date.

In response to the disappointing provision for pharmacies, the Pharmaceutical Services Negotiating Committee (PSNC) submitted a bid to the treasury for additional funding in May 2020. Also, Numark, the pharmacy membership organisation, has started a petition for better investment in community pharmacy under the #saveourpharmacies banner.

Pharmacy’s financial health as a business

The support for small and medium businesses announced during the March 2020 budget may apply to many community pharmacies. The measures include deferred payments, reduction of business rates and sick pay support.

There are several options with different businesses eligible for different schemes. For community pharmacy, here are some highlights:

Sick Pay Support – smaller businesses can claim back statutory sick pay (SSP) for staff absence due to COVID-19.

Small Business Loans – loans of between £2000 and £50,000 were available from April from commercial lenders. The government acts as a guarantor and will pay the interest and fees for the first 12 months.

Tax Payment Deferral – VAT payments were deferred from 20th Match to 30th June with no late payments penalties.

COVID-19 hits retail opportunities

The damage to business extends beyond funding. Every community pharmacy needs retail to stay afloat and the need for social distancing within stores is threatening their income. 

Bigger stores, such as chains like Boots, may be able to operate as near to normal as possible because their floor space allows for customers to stay more than 2m apart. 

However, small shops, which often need vital additional shelf space to boost their retail offering, may not be able to keep their customers as safe in-store due to their smaller square footage. 

When the queue for the dispensing counter winds around the shop floor or where a one-out-one-in policy means is in place, customers are less likely to browse or impulse buy.

Indeed, people may avoid smaller pharmacies altogether. Instead, choosing larger chains that feel roomier, less cramped – and safer.

The true cost of protective equipment

The £300 contribution towards protective screening is welcomed. However, it doesn’t reflect the cost of installing screens or barriers to help keep staff safer. Or zonal markings and other controls aimed at keeping people 2m apart.

Sadly, it does reflect the lack of understanding about the pharmacy setting which was apparent from the ambiguous-to-confusing PPE guidelines issued by Public Health England (PHE).

Thankfully – being healthcare professionals – pharmacies have been able to make their own sensible judgements about the use of face coverings by staff. 

Most dispensaries involve working closely with colleagues. Therefore, distancing from fellow workers, as well as patients, isn’t always possible. As a result, many pharmacy workers are choosing face masks and shields – sometimes at personal expense.

However, the PPE ring-fenced for other healthcare workers would have helped protect pharmacy staff and made sourcing the products easier and faster. 

The lack of effective guidance for pharmacy represents a more serious lack of understanding, or at least appreciation, of pharmacy’s role in fighting this virus. 

Conclusion

So, there is financial support for pharmacies during the outbreak. Yet, Pharmacy still feels overlooked and undervalued as a service.

But this was never about profits. The financial support is critical to enable pharmacies to stay open and serve a community at a time when a nation’s health depends on it.


This blog post was written on behalf of My Locum Choice by Nicola Hasted of Pharmacy Mentor.


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