UK pharmacies are facing a £250million financial crisis from April due to rising costs, including from Chancellor Rachel Reeves's National Insurance raid, with industry leaders warning of imminent service cuts unless the Government provides urgent funding support.
The National Pharmacy Association (NPA), representing 6,000 independent community pharmacies, has warned it will recommend collective action if new funding is not announced imminently.
The crisis comes as pharmacies across the country face a triple burden of increased National Insurance contributions, National Living Wage rises, and higher business rates.
Unlike other businesses, pharmacies cannot raise their prices to offset these costs, as approximately 90 per cent of their work is funded through the NHS.
Industry experts warn this could trigger widespread closures, with many pharmacies already "hanging on by their fingernails".
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Pharmacies are warning about the impact of the Chancellor's National Insurance raid
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The financial pressures facing pharmacies have intensified dramatically, with the NPA estimating a combined £310million cost impact across UK pharmacies from April's changes.
Core funding for community pharmacy has already fallen by more than £1billion in real terms since 2025/16, according to the Company Chemists' Association.
Dr Nick Thayer, head of policy at the Company Chemists' Association, said: "Each pharmacy in England now faces an annual funding shortfall of at least £100,000."
This fixed amount pharmacies receive for dispensing medications has remained unchanged for nearly 11 years, despite rising drug costs and increased prescribing volumes.
Industry analysts are warning about potential pharmacy store closures
PA IMAGESOver 1,200 pharmacies have closed since 2017, with more closures occurring in more deprived areas. The sector has experienced a 40 per cent cut in real terms to pharmacy funding over the past decade.
In a historic show of unity, 99.7 per cent of pharmacies who participated in the NPA's ballot indicated they would be prepared to take collective action for the first time if their funding situation does not improve.
Nick Kaye, the chairman of the NPA, said: "Pharmacies face a financial cliff edge at the beginning of April, with a triple whammy of rising National Insurance, National Living Wage and business rates all arriving at once."
"At the moment, they still have no certainty if any of these costs will be met by the Government, despite assurances for other parts of the health system including our GP colleagues," he added.
"Pharmacies have shut in record numbers and those that are left are currently hanging on by their fingernails," Kaye warned.
The NPA chairman indicated collective action, such as reducing opening hours, could be recommended without "imminent funding certainty".
Yorkshire-based pharmacist Ashley Cohen exemplifies the sector's struggles, having been forced to borrow £125,000 last year just to keep his three pharmacies operating.
"This year alone, I've had to borrow an extra £125,000 to keep me going, and that is just for my small group of pharmacies," Cohen told The Independent.
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Business owners and charities are worried about the looming National Insurance raid GETYY He has already taken out two loans and warns he's "on borrowed time".
"There will come a point where I can't keep borrowing, remortgaging the house, raiding pension pots or putting money into a business or a profession that isn't being valued."
Cohen warns of a potential "tsunami of closures" across the country, as each pharmacy closure increases pressure on neighbouring facilities that are already struggling.
"I'm on borrowed time, and I'm not the only one," he added.
The Government is currently negotiating contracts for 2024/25 and 2025/26 with pharmacists amid the growing crisis.
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.
"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."
