Setting up your own pharmacy
Dr David Roberts gives advice on the practicalities and costs of setting up your own pharmacy.
It is pretty common knowledge that the Labour government created four exemptions to the Control of Entry Regulations. Many GP practices were able to take advantage of one or other of them after creating their own pharmacy company and they have done pretty well out of it (see case study). Then the rumour mongers got going, crying that the rules would be changed. After that the number of GP applicants reduced to a trickle.
Exemptions to CoE
All of the exemptions still allow applicants to freely by-pass the regulations. They are:
- 100-hour pharmacies
- Mail order and IT pharmacies
- Pharmacies in consortia and
- Pharmacies in large retail areas
Then, of course, there remains the standard, routine application for a 40-hour pharmacy, sometimes known as competition and choice, where there is no exemption and the applicant has to prove his pharmacy is necessary or expedient.
The 100-hour pharmacy is the one which has caused most upset both in government circles and amongst existing pharmacies. It is too simple. Find premises and a couple or so pharmacists, assess the viability of the project and you have a business.
It is so easy that one authority claims that 438 100-hour premises opened in 2010-2011 compared to 258 the previous year, thus, making them account for 6.3% of all English pharmacies and 78% of all the exempt class.
Predictably the majority of them are clustered around GP premises. Presumably to gain the most trade to offset the extra costs involved. You can see the attraction and the opportunity for GPs who own premises large enough to accommodate a pharmacy. Opening a pharmacy for these is a no-brainer. Being so obvious I cannot understand why more do not do it.
The 100-hour variation
It is also obvious why both pharmacist and government want to block this exemption. The high street pharmacist considers the 100-hour variation to be unfair competition which dilutes the pay 'pot' whilst the government dislikes the unrest their opening causes and the uncontrollable expense, so they are closing three of the four exemptions, leaving only the mail-order route open. The intention is to make the most of the pharmacy network by getting them to take more responsibility for local health needs.
The 100-hour will be replaced by basing the decision on entry on the local Pharmaceutical Needs Assessment (PNA) document. If a candidate can demonstrate either that there is an unmet need not in the PNA or one which is in the PNA but is not being provided in the neighbourhood, then the application may be allowed. However, a robust business case will be needed for success.
As a point of interest, this is very like a slightly tougher form of the competition and choice route of application and will, no doubt be treated as such. It will be possible to succeed here just as it was for competition and choice (ref: www.countrydoctor.co.uk).
One exemption that stays: mail order pharmacies
Finally, I must not forget the one exemption which will remain, mail order pharmacies. There are 122 of them at present. The principle of these is that the patient never visits the premises. Indeed, they may be very remote from the patient's home but he either sends the prescription to the pharmacy or it is collected from the surgery by a pharmacy representative. The dispensed drug is then delivered by the pharmacy directly to the patient.
Several doctor-companies have found this to be a profitable business, especially if there are a number of nursing homes or other institutions in what could be a very wide area and at least one GP has given up general practice completely.
When to begin
The changes are not imminent despite anything you may have heard. The consultation period has just finished and the government intends to put the new regulations into action somewhere around mid-2012 but there is always slippage where governments are concerned. Until then, there will be no change.
So there is ample time for any or all of you to get an appropriate application in before then but remember, this government is after quality in pharmacy and a proper case for a new pharmacy must be put.
To make it easy I now head a team which will evaluate the feasibility of your project, prepare and submit an application and, if successful, design, fit and staff your pharmacy, before, finally, managing it to the highest standards. The pharmacy will remain 100% in your ownership.
Area Dispensing with low script volume and low footfall
The pharmacy opened November 2010
GP practice dispenses 8,000 items/month.
Pharmacy dispenses 3,000 items/month. Pharmacy requires to dispense 2500 items/month to be profitable, so is already profitable. One-off set-up costs (building, fitting out) will be eliminated in 2012.
Few pharmacy services carried out yet because newly set up and lack of time but the intention is to provide a full list of services and thus increase patient satisfaction and profit.
If a small dispensing area can lead to a profit within 12 months then consider what a large, urban area can provide when the pharmacy is within the GP premises.
Dr David Roberts is a GP in Hitchin, Herts