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NHS Pharmacy Market Analysis: Online Pharmacy

  • Conall Lavery
  • 15 November 2018

Hello and welcome to the latest edition in our series of monthly newsletters. We will continue to bring you industry summaries and insights using NHS data to keep you appraised on changes that affect you from a business point of view. This month our focus will be on Online Pharmacy.

Industry Overview - Items

In the NHS data to July just released, items for the month were up 0.8% on the month compared to July the previous year. The Corporates continue to underperform the other divisions, this is mostly driven by Rowlands and Lloyds whose items are down by -2.3% and -4.8% respectively. On a Like for Like basis (taking out the branches they sold), Lloyds loss of items is still at -1.6%. The multiples Morison’s +5.7%, ASDA +3.6%, and Superdrug +5.0% are all doing relatively well. The Online Pharmacy Division continues to outperform the other Divisions with a growth rate of 19.4% on the same month last year.

Online Pharmacy

The Online Pharmacy Division continues to outperform the other Divisions with a growth rate of 19.4% on the same month last year. When we investigate the Online Division in more detail we can see that Pharmacy2U (P2U) is the only one that really matters. They have 3,700,598 items on a rolling year basis, the next closest is Boots Online which has only 110,000 items on a rolling year basis. The growth rates of Lloyds Online, and Rowlands are impressive, and these are ones to keep an eye on.

P2U’s relentless growth

P2U’s filed accounts show that they lost around £20M last year, this included a write down of £14M for their acquisition of Chemist Direct. They would prefer to say they invested a further £20M in their business. It may be complacent to hope that they will eventually run out of money and go away. Even if they did, their business would be picked up by someone else.

It has come to our notice that P2U has offered every practice in England a free Flu postal mail piece to their patients in exchange for putting a P2U promotional brochure into the campaign. You can expect more competition from your local practices for flu jabs, but more alarmingly your patients may receive P2U promotional brochures delivered directly to their houses.

How can Community Pharmacy protect their patients from being lost to P2U?

You could get on to every one of your surgeries and ask them to set up Repeats to your pharmacy, but that is not practical. You need a short list of surgeries to approach. The first job is to identify the practices where P2U’s recent growth is the greatest. See below how this is produced from RWA’s Local Insights product.

The next step is to go into the practice with a list of your patients that come from this surgery that are on medicines that are suitable for repeats. See below.

This list makes it easy for the practice to set up the EPS Repeats. The practices are very busy. A few minutes spent by the doctor reviewing these patients and then setting them up for repeats will save the practice a huge amount of time as this reduces the time spent on appointments with patients they don’t really need to see. You may need to explain to them why a repeat going to your local pharmacy, rather than P2U, is safer for their practice.

It is a win for the NHS because patients are more likely to be compliant with their medicines so are less likely to end up in hospital. The Community Pharmacy wins as they increase their items with these loyal patients and they can plan their workload better. And, it is a win for the patient as they get can get the same service from there local pharmacy that they get from P2U but with the added assurance that they can pop into the pharmacy if they have any queries.

Should you like any clarifications or would like to discuss these reports in more detail, please let me know.

Until next month!

Conall Lavery
Chief Executive Officer

conall.lavery@realworldanalytics.com
0808 1890 617



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