Growing the pharmacy profits

Growing the pharmacy profits: align your strategy with the opportunities for growth

During 2013-18, overall dispensing chemists’ revenue in the UK is anticipated to increase at a compound annual rate of 1.5% according to the report published by IBIS World at the end of 2017.growing the profits

The forecasted growth is mainly being attributed to an ageing population and the increasing prevalence of diseases such as obesity and associated health ailments.

The rising popularity of electronic prescription services and the development of direct contracts with drug manufacturers have also underpinned growth.

However, despite this, pharmacists are coming under pricing pressure due to regulatory changes, decreasing NHS budgets, the loss of patent protection and increasing competition.

Economic and political uncertainty, which is impacting all industries in the UK, is likely to continue to constrain growth as consumers opt for low-margin generic prescription drugs over high-margin branded products. Regulation and continued cuts to NHS funding are expected to limit growth. Further, low-cost generic drugs will continue to flood the market as pharmaceutical patents expire, aggregating downward pricing pressure.

With competition from supermarkets and with online-only retailers such as Amazon poised to enter the market, the importance of having a clear business strategy and marketing plan for the pharmacy is vital.

Identifying the key opportunities for growth should be your starting point: an ageing population; increasing health consciousness in the general population; rising NHS prescription volumes; demand for services such as vaccinations and new products such as biological and biosimilar medicine are also forecast to increase.

Here are some questions to consider as part of your planning process. The answers to which will help you to develop your strategy.19942 MACO Tax Planning 39

  • How close is your establishment to the nearest GP surgery? How does this affect demand?
  • How do you ensure your pharmacy is easily accessible? How late are your opening hours?
  • How have supermarkets in your area affected your business recently? How will you differentiate your services from those offered by supermarkets/Amazon?
  • How will you alter your product portfolio to cater for an ageing population and health consciousness in the wider public?
  • Are you accurately managing stock?
  • What software and business applications are you using to run and manage finances?
  • How do you hire and retain qualified staff? Are you providing staff training to deal with elderly customers, millennials, time-pressed working parents?

If you would like to discuss further, get in touch and I’ll help you to progress your business and financial strategy for the year ahead.