Community Pharmacy England’s (CPE) 24-person committee is selected to represent the sector’s disparate interests – and of course they vary. What is good for big chains, like supermarket pharmacies, is not necessarily good for the family-run or sole contractor/owner/operator.
The distribution of seats on the committee determines which demands are prioritised in negotiations. Currently, the 24 person committee is made up of 10 regional reps, 2 NPA, 3 IPA (nee AIMP) and 9 CCA members.
But by its own calculations, following what CPE describes as a “significant change in sector ownership” (aka the demise of Lloydspharmacy) corporate multiples represented by the Company Chemists’ Association (CCA) has too many seats on CPE’s committee for the number of pharmacies that they control.
Recent developments have shown that CPE is aware it has this representation challenge to address, and it has introduced an “immediate interim measure while permanent changes are considered” in the shape of two observers.
Whether this proves to be a help or hinderance remains to be seen, but it does mean the CPE has no plans to fix the problem until 2026. That will be too late for it to make a difference to coming funding talks - by that time the CPE would hope to have completed two sets of negotiations (the contract for 2024/25 and the next five-year deal).
Seats
According to NHS data for September, CCA members run 2,892 branches in England, or 27% of all branches in the country. Technically, that should give it seven seats on the 24-person committee. Instead, it controls nine seats, a voting block equivalent to 38% of the committee.
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By CPE’s calculations, “non-CCA multiples” (those with ten or more branches), which have three seats on its committee, run just over 2,000 branches, or 19.5% of the total. This should equate to five seats on the committee.
CPE’s data shows “independents”, which it defines as businesses of one to ten pharmacies, control just over half of the branches in the sector. It considers this group adequately represented by ten regional representatives and two representatives from the National Pharmacy Association (NPA).
Sites owned by multiples are closing rapidly. There are 10% fewer pharmacies controlled by 100+ groups since September last year, and since January 2021, there are 1,880 fewer such pharmacies, a 36% drop.
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Every single month since January 2021 has seen more closures than openings for large multiples. Using September data from the NHS BSA shows that the CCA’s share of the sector has dipped further. Rounding would drop its seat share to six.
By contrast, every month since January 2021 has seen net growth in pharmacies owned by “small” groups of between one to five branches. Therefore, if this closure trend continues, it would exacerbate the CPE’s representation issue.
Representation
The challenge is compounded by the definitions used by CPE. It defines “independents” as having one to nine branches, and multiples those with ten or more branches. These are divided by whether they are members of the CCA or not.
For the NHS, a small pharmacy business has at most five branches, mediums have between six and 99, and large firms more than one hundred. CPE claims that its definition is “broadly in line” with the NHS’s - but different results follow the use of the NHS definitions.
If seats were allocated according to the NHS definition (and seats rounded up), “small” pharmacy businesses would have 13 seats, “mediums” would have four seats, and large firms would have seven seats, with Boots alone nabbing three seats.
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As a result, questions are being posed. Does it make sense, for instance, to lump the owner/operators of a single pharmacy together with those that own multiple stores?
Single pharmacy businesses total 3,715 branches or 35% of the sector are organised in this way. This would entitle them to eight dedicated seats.
And the CPE needs to account for the 400 or so distance-selling pharmacies (DSPs) that technically fall into the one-branch category. With 4% of the 10,699 pharmacies in England, they might nab one seat, if we round up.
But one seat is unlikely to work for a sector that is dominated by one player in Pharmacy2U. Smaller DSPs might struggle to feel represented by a firm that competes directly for their business.
Pharmacy2U appears to be a fly in the ointment of the argument that CPE representation should match the number of branches controlled by an interest group. It alone accounts for 2% of all items dispensed.
Unity
Is treating community pharmacy as a sector of united interests a mistake? While the NPA’s headline figure of “ten pharmacies closing a week” has found traction in the public-facing consumer press, it has created an uncomfortable tension.
An NHS, Department of Health, or Treasury official might take an objective look at the data and say the mass closures are a crisis for the CCA and that independent pharmacies are doing alright, all things considered.
In which case, can independent pharmacies really feel reassured that their negotiator is not impeded from fighting its corner if CCA’s bloc keeps its might?
