Diabetes, migraine and acne drug shortage fears as high prices hit pharmacies

Millions of people face shortages of common migraine, diabetes and acne drugs as the high cost of stocking them could force pharmacies to close.

Pharmacists are asking GPs to prescribe alternative drugs for common conditions that cost less and have warned that if they cannot pay for certain drugs then suppliers may refuse to distribute them.

A cash crisis has already shut hundreds of high street pharmacies, forcing patients to go cold turkey or travel up to 40 miles from their homes to access vital medicine for chronic and recurring conditions.

As part of its 10-year plan for the NHS, the Government has committed to shifting care “from hospitals and into the community” and has vowed to work with the pharmacy sector to do this.

But pharmacies throughout the UK have warned that the sector is on the verge of collapse unless the Government agrees to an emergency funding injection as some of the most commonly prescribed medicines are loss-making.

Pharmacies lose almost £20 on popular acne treatment Benzoyl peroxide and almost £30 on haloperidol 5mg tablets with each prescription, analysis for The i Paper by the National Pharmacy Association (NPA) reveals.

Treatments for high blood pressure, migraines and type-2 diabetes are also being prescribed at a loss to independent owners, who said they are having to take out bank loans, remortgage houses and dip into their own pockets to make up the shortfall.

Around 700 pharmacies in England have closed over the last two years, according to the NPA. They say the situation will only worsen next year as a result of changes to employer national insurance contributions and the national minimum wage announced by Rachel Reeves in the Budget.

Olivier Picard, who owns four Newdays Pharmacy shops in Berkshire, said he had never seen the situation so bad since he started working in 2000.

“What is very different today is that pharmacists are not able to make a living anymore and are also taken for granted with the assumption that we can pick up the slack and do the job for nothing,” he said.

“There has always been drugs shortages – manufacturing issues, a container that sinks – but it was a small amount over a month, whereas now there are hundreds of medications that cannot be sourced at all, or that pharmacists have to pay a premium for because we lose out on the concession prices. It’s crippling.”

Picard said that he he lost £1,000 dispensing Apixaban – a “blood thinner” medication prescribed to reduce the risk of heart attack and stroke – in one month in September.

“You cannot recover those kinds of losses,” he said. “One of my pharmacies is next to a secondary school and I dispense a lot of acne treatment – Benzoyl Peroxide + Clindamycin gel.

“I have had to ask GPs to prescribe a different drug instead, because I’ll probably go out of business if I have to dispense that particular drug up to 50 times and lose £20 a box on it.”

NHS reimbursement prices are set on a month-by-month basis by the Department of Health. Applications are made one month in advance and once the price concession has been announced, it only lasts for the month in which it is granted. As NHS prescriptions are fixed at £9.65, pharmacies can often make a loss on products if there is a shortfall.

Large pharmacy chains, such as Boots, can insulate themselves against any shortfall due to their bigger purchasing power and profit-making branches which they can offset losses against. But, in the current climate, thousands of community pharmacies must decide to take a financial hit on a popular product to keep their patients happy or send them elsewhere.

Picard said: “We shouldn’t be in the position where we are having to beg and borrow to get stock in the first place, but then when we’ve managed to get the stock we still lose money because the concession price that’s announced is way short.

“The NHS pays for surgical equipment, you wouldn’t get a doctor to order everything, so why are we asking pharmacists to prop up the NHS by paying more than we are paying on medicines? It’s crazy.”

How concession pricing works

The NHS uses a drug tariff for reimbursements, but it often does not cover the wholesale cost of medicines due to changing prices. The NPA said the current concession pricing system is supposed to act like “weighing scales” where pharmacists make a loss on some dispensing lines but a profit on most other treatments.

However, in recent years funding cuts and rises to the cost of medicines has meant the system has essentially stopped working – particularly for the small independent pharmacies the NPA represents, who typically only have one or two branches and very limited purchasing power. It means many owners are operating their pharmacies at a substantial loss through no fault of their own.

In April, the then government imposed price restrictions which pharmacies say has made a bad situation even worse.

In October, the National Pharmacy Association found some pharmacies are being underpaid by as much as £75 per pack of medication. For example, Amantadine, a drug to treat the symptoms of Parkinson’s, cost pharmacies £94.05 per pack to buy from suppliers, but the drugs tariff pays £18.06 per pack. The NPA said that a pharmacy dispensing this medicine to a patient would lose £75.99 per 56 tablet pack.

Another drug pharmacists are struggling to source is metformin, sold under the brand name Glucophage. It is the main first-line medication for the treatment of Type 2 diabetes, particularly in people who are overweight.

It is distributed at a loss of £2 a box – which is small compared to other drugs – but amounts to businesses losing several thousands of pounds a month on that one medicine alone due to the number of prescriptions being filed.

Asked how he makes up the shortfall, Picard said: “I don’t. I pray that the concession price that comes in is at or above the price I have to pay. And then I do as much as I can elsewhere, such as offering Covid and flu vaccinations on behalf of the NHS. But why should that have to compensate on the loss I’m making on medicines?

“I’m sure officials will tell you we have the cheapest medicine in Europe and that we should be proud of that. But it has created this problem of concession pricing and costs we can’t control which are crippling pharmacies like mine.”

Pharmacists compared the drugs market to the stock market, pointing to recent volatility where the cost of medicines can change dramatically month by month. It has led to a £500m surge in prescribing spending in 2023/24, with spending on some medications more than doubling.

It is illegal for a pharmacy to deny someone a prescription due to its potential cost – if an owner denied a patient a prescription on financial grounds they would be struck off. As a result, three-quarters of pharmacies in the country report that they are losing money, with eight closing every week according to the NPA, which represents 6,500 of the UK’s community pharmacies.

The NPA is calling for an annual £1.7bn funding increase to plug a “financial hole” facing the industry. Core government pharmacy funding in England has fallen by 40 per cent since 2015-16, after adjusting for inflation, the NPA said.

The last five-year government funding contract expired in March and officials have yet to offer a new funding settlement, leaving thousands of small business owners in the dark about their future.

“This is definitely the worst period I’ve ever seen for pharmacies and that includes Covid,” said Mike Hewitson, a pharmacist for 21 years who runs Beaminster Pharmacy, in Dorset.

“The funding and workload issues are causing major problems. Price spikes mean the cost of some drugs can go up tenfold in the space of two weeks and we’re expected to fund those even if the concession price doesn’t reflect that.

“It’s like going into Tesco for some milk and being told it’s now £40 a pint. There has always been some unpredictability but it is getting worse.

“We’ve gone from maybe having problems with 1 in 100 items to 1 in 10, which then has a massive knock-on effect on workload and sourcing alternative treatments.”

Ese Kumordzi, who took over DA Tubb Pharmacy in Plymouth 18 months ago, said she is still repaying a loan of over £10,000 that she took out in June “mainly because of the little shortfalls” in NHS drug reimbursement.

She was billed £27,000 by her wholesaler and at the same time the NHS Business Services Authority also “clawed back £18,000”.

Hewitson said other people are in similar dire financial straits. “I know people are remortgaging their houses to keep their businesses afloat. I’ve got people who are cashing in their pensions just to keep the supply of medicines going to their patients. Quite honestly, that cannot carry on for ever. We are going to hit the buffers.”

The result of this on patients is that some medicines could go missing from pharmacies if they cannot afford to pay suppliers for the stocks.

“As soon as we can’t pay our wholesale bills the wholesalers stop the supply of medicines overnight as they have no obligation to supply us.”

He added: “We’ve had 11 years without a funding increase… NHS England sees us as a second class healthcare profession until it wants us to open our doors to help with Covid jabs, for example. We’ve always felt we’ve been devalued.”

NPA chair Nick Kaye said pharmacists are “expected to dip into their own pockets” to subsidise medicines because of “chronic underfunding by the NHS”.

“The Government must reform the broken contract between the NHS and pharmacies as well urgently get round the table to negotiate this year’s funding settlement, delivering stability and a long-term funding increase that will stop this tidal wave of closures,” he said.

Last year, NHS England spent £250,000 to evaluate clinical services provided by community pharmacies, in advance of the next community pharmacy contract. The evaluation will be used to help NHS England “make effective decisions regarding clinical services for the future community pharmacy sector”.

An NHS spokesperson said: “The NHS knows how essential pharmacies are to local communities and the wider NHS, offering a vital and convenient way to access healthcare services with eight in 10 people currently living within a 20-minute walk of a pharmacy.

“That is why community pharmacy saw the biggest expansion of services in years in 2024, with the rollout of Pharmacy First, which enables patients to get treatment for a range of conditions without needing to see a GP first.”

A Department of Health and Social Care spokesperson said: “Community pharmacy has a vital role to play as we shift the focus of the NHS out of hospitals and into the community, through our 10 Year Health Plan.

“Unfortunately, we inherited a system that has been neglected for too long and isn’t supporting the pharmacists we need to deliver for patients at a local level. We will work with the sector, making better use of the skills of pharmacists and pharmacy technicians, to build a service fit for the future.”