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Pharmacy groups: Manage your opportunities & risks to maximise profits

While the NHS is under tremendous financial pressure – that pressure only rolls down to pharmacy groups, who are operating under increasingly tighter margins. The Dept of Health and the NHS is telling pharmacy owners that they must innovate in order to deliver the medicines and services at a cost acceptable to government. We live in a digital world where each and every transaction generates data, and that data is the foundation of any business operation, including the pharmacy industry. This data helps the owners to see how the business is performing, giving them insights to aid business decisions, to prevent losses from potential risks and maximising profits by capturing all available opportunities.

The team at RWA Pharmacy identified 5 areas of major risks and opportunities that pharmacy group owners should action to maximise their profit under the current contract:

  • Margin Risks
  • Reimbursement Risks
  • Liability Risks
  • Upsell Opportunity
  • Service Opportunity

Some of the major margin risks include NHS discount changes coming into effect in Oct 2022, branded generics and the movements of medicines within the categories, which can cause a big impact on a month-by-month basis in terms of your AIVs and NIC’s, and on the back of that, your margins. The transitional payment is another risk for pharmacy groups - if the branches don’t complete at least one NMS before the end of the month, they will lose that monthly service payment.

Lack of live stock in pharmacies, keeping an eye on the stock movements is very difficult, yet it’s critical to have visibility for stock and fraud detection. Being able to see the dispensing and ordering patterns of medicines will make sure you have time to move product around your group before they go out of date and avoid overstocking.

It's not all bad news – we also help pharmacy groups look at their data to identify areas where they can generate extra profit. These include maximising their potential in local services and private services. In the national service area, there’s a huge opportunity in NMS following the contract changes last year. Other services such as hypertension, CPCS & DMS and vaccines will also contribute largely to driving your business forward. Additionally, we see a big opportunity in developing the retail side of the business. Currently, retail accounts for approximately 7% of pharmacy businesses in NHS England, where pharmacies have traditionally been dispensing led. But looking at Northern Ireland for example, with the same drug tariff as England, they earn around 30% of their revenue from the retail side of their businesses, so there’s room for growth with the right reporting and processes.

We only cover a small part of the opportunities and risks analysis in this blog, watch the video below for full details or email pharmacy@realworldanalytics.com.


If you wish to get more details on our Pharmacy Business Intelligence (BI) solution and how we can help you, please contact us at:

pharmacy@realworldanalytics.com.