Pharmacy consolidations (mergers)
Published on: 21st October 2016 | Updated on: 25th March 2022
As part of the consultation on community pharmacy 2016/17 and beyond, Community Pharmacy England proposed changes to the National Health Service (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013 (the 2013 Regulations) to prevent a new pharmacy stepping in straight away if two pharmacies merge. These proposed changes were accepted by the Department of Health as part of the two year funding package imposed upon community pharmacy in England and announced on 20th October 2016.
On 5 December 2016, amendments to the 2013 Regulations come into force which facilitate pharmacy business consolidations from two sites on to a single existing site. Importantly, a new pharmacy would be prevented from stepping in straight away if a chain closes a branch or two pharmacy businesses merge and one closes. This would protect two pharmacies that choose to consolidate on a single existing site – where this does not create a gap in provision.
To support community pharmacy contractors, Community Pharmacy England’s Regulations and Support Team has produced the following briefing providing information on these regulations. As well as detailing the three main consolidation options and the procedural steps for an application, it also outlines the statutory protection from subsequent applications seeking to replace the closing pharmacy.
Q. How many pharmacies does Community Pharmacy England expect to merge?
Decisions to merge pharmacy services onto a single site will be for pharmacy contractors to make, based on local patient needs and business factors. We expect that for some contractors the amendments will be welcome in allowing them to streamline their businesses and that this change will reduce the number of pharmacy clusters.
Q. Could two pharmacies from different businesses merge?
Yes, whether by a merger or a sale.
Q. How long should a consolidation application take?
An application to consolidate is a “notifiable application”. Therefore, determination of the application should be within 4 months of the receipt of all required information and documentation.
It will be dealt with as an “excepted application” under the 2013 Regulations, which means that the application is not assessed against the PNA.
For more information, please visit the market entry section of the website.
Q. How much is the consolidation application fee?
It is £250. See update to Secretary of State’s Directions.
Q. What if NHS England are satisfied that the grant of the application would create a gap in service provision in the PNA?
NHS England must refuse the consolidation application.
On 22nd July 2019, as part of the five-year CPCF deal agreed, the DHSC have promised:
“…To support contractors who may be considering this option, we want to strengthen the protections offered to pharmacies wishing to consolidate under Regulation 26A of the NHS (Pharmaceutical and Local Pharmaceutical) Regulations 2013 whilst maintaining fair and open competition and access to NHS pharmaceutical services…” (see paragraph 33 of the joint CPCF Agreement Document)
These proposals will be subject to consultation with Community Pharmacy England.