A HEALTH watchdog has been warned more than 150 pharmacies are facing crippling financial pressures and a number of them could close.

North Yorkshire County Council’s scrutiny of health committee heard while pharmacies in Knaresborough and Haxby, near York, had recently closed, others, including one in the Northallerton area, were considering following suit.

Jack Davies, chief executive of the industry’s body for the county, Community Pharmacy North Yorkshire, told members pharmacies are often having to pay vastly more for medication than they receive from the NHS from the government for dispensing them.

Alongside that, he said pharmacies are contending with a 7.5 per cent drop in government funding for the Community Pharmacy Contract since 2016, and 121 pharmacies are set to lose government payments of about £27,000 to look after their premises.

He said 33 pharmacies that were at least one mile from the nearest alternative pharmacy would still be granted the premises payments.

Mr Davies said: “If the next pharmacy was one mile one yard then fine, if it was a yard less than a mile you didn’t qualify. It was as strict as that. There was one pharmacy in our area that was short by one yard and another by two yards. They appealed on it, but unfortunately did not win.

“There is a quite substantial number of pharmacies that don’t qualify. If you go into Northallerton, there are six pharmacies within a three-mile radius of this area. So this not only hits the independent pharmacies, but the multiples such as Boots, Lloyds and Well. We have 43 Boots in our area and if you take 43 times £27,000 off that budget that is a significant amount of money Boots have lost.

“One independent pharmacist said to me he’s been running the pharmacy for 30 years and for the first time in January, he took in less money than he paid out. The same thing happened in February.

“It frightened him to death, so he met with his accountant and was told unless there was a cashflow change he could not sustain it above three months. That pharmacist is genuinely thinking about selling up. They are spending an hour a day chasing the drug tariff list for the best price.”

He told members due to a “broken” NHS drug pricing strategy the pharmacies were also having to pay drug firms more for drugs than they received back from the government for dispensing them.

Mr Davies said the majority of pharmaceuticals were being sold by drug firms above the prices given to pharmacists on the NHS drug tariff list. He added it had become normal for drug firms to raise prices as soon as the NHS upped the amount it will pay pharmacists.

He said despite this, pharmacists were only given dispensing fees, plus whatever margin they could make on the pharmaceutical product.

Mr Davies said: “One of the most common medicines dispensed by pharmacies for diabetes is glipizide, which the NHS will pay about £2.80 for a packet of 28 tablets. The pharmacist has to purchase that at the market and if they can buy it at £2.50 then wonderful, they can make a profit on that.

“But due to market manipulation they can’t and they are paying £3.40 for it.”

He said eyedrops people take for hypertension would normally cost £37, but recently pharmacists had not been able to purchase them from any supplier for under £400, while the NHS drug tariff for the eyedrops was about £18.

“That is having an immediate and major impact”, said Mr Davies.

He said the government had asked the Pharmaceutical Services Negotiating Committee (PSNC) to consider a new model for purchasing.

The PSNC has agreed key principles for a fairer system, recognising the need for the NHS to continue to meet affordability challenges for medicines.

The principles include that community pharmacy contractors must not be the victims of adverse events or activity further up the supply chain and that any pricing system must balance fairly contractors’ duty to supply with a reasonable purchase risk.

Harrogate councillor John Mann questioned whether the Competition and Markets Authority been approached to investigate the situation, and commented: “The system seems to be in crisis.”

Mr Davies replied such an investigation could take years.

The committee’s chairman, Councillor Jim Clark, said while only two pharmacies had closed so far, he was particularly concerned about pharmacies shutting in rural areas where access to medicines would be reduced.

He said: “It is not particularly helpful to have more cuts in the NHS. We need to watch this carefully as the cuts begin to bite.”