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Pharmacy contractors continue to grapple with profit pressures despite many reporting significant sales revenue increases, according to Hutchings Consultants' England Pharmacy Market Update 2024. The report emphasises that gross profit margins are under considerable strain due to factors such as rising wholesale drug costs, the dispensing of certain drug lines at a loss, reduced drug tariff reimbursements, and ongoing medicine shortages. These challenges have led to a growing number of pharmacies reporting substantial declines in their profit margins this year. For instance, Cohens Chemists reported a £5.7 million loss in the last financial year, even as sales reached £253 million. Similarly, Day Lewis, the UK's second-largest independent pharmacy chain, experienced a 5.9% sales increase driven by growth in prescription dispensing, over-the-counter sales, and pharmacy services, yet faced a 32% drop in pre-tax profits due to heightened administration costs, which included inflation-driven increases in staff, energy, utilities, and rent. The average profit margin has declined to 33% in 2024, down from 34.4% the previous year.

Instability in the supply chain network is frequently undermining the profit margins in community pharmacies, former Pharmacy Minister and Chair of the Health and Social Care Committee Steve Brine has said. Brine emphasised that community pharmacies often lack information about the prices wholesalers charge for essential generic medications. "They lack visibility into scarcity, and the pricing of these products is often significantly higher compared to other European countries," the former minister remarked during a parliamentary debate focused on the future of community pharmacies on September 14. From financial pressures to workforce crisis and pharmacy closures, the debate delved into critical challenges faced by pharmacies, aiming to propose tangible solutions for a sustainable future in the sector. Chaired by Sir Mark Hendrik, the debate was initiated by Conservative MP Peter Aldous and featured contributions from a host of participants including Labour MPs Taiwo Owatemi and George Howarth among others.