Quality Payment Scheme - a mixed reaction from the pharmacy industry
Jassi Sunner, Business Agent in our Medical team, explores the reaction to the funding changes in the pharmacy industry from existing operators and potential buyers.
The start of 2017 has seen a number of Local Pharmaceutical Committees (LPCs) provide various workshops to help contractors combat the recently implemented funding cuts and to encourage them to ensure they qualify for payments on offer through the Quality Payment Scheme (QPS).
The pharmacy team at Christie & Co has been pleased to support, sponsor and attend a number of these events and strong attendances of QPS training programmes have been seen across the country with contractors keen to find new ways to mitigate the impending cuts. Essentially, contractors that successfully meet the QPS’s requirements will receive Quality Payments which will be funded from a £75m budget that is part of the overall community pharmacy funding budget of £2.592bn.
From our own experience, there is mixed reaction to this in the marketplace with some contractors as well as new entrants to the market only too keen to embrace the changes and to improve their businesses. However, others have been slower to react to the changes that the new funding regime demands. It will be interesting to see how many pharmacies meet the QPS ‘gateway’ criteria and therefore qualify for the Quality Payments as of the first review date at the end of April this year, although this will only increase as contractors recognise the impact that the cuts may have.
From a transactional market point of view, purchaser confidence remains high although many are keen to see that the businesses they seek to purchase have or are trying to safeguard their position by ensuring that they seek to generate the fees and services payments available to them.
On the other hand, the cuts have caused some operators to accelerate their exit or retirement plans. Comfortingly where operators do decide to exit there is a willing and well-funded purchaser pool eager to buy. As we moved into 2017, approximately 80% of applicants registered with us were either new entrants or first-time buyers. With over 5,000 registered applicants this is a sizeable number, but what is interesting to see is their unwavering confidence that the pharmacy sector will not only meet the challenges the current cuts create, but will continue to thrive well into the future.
With a number of completions already under our belts this year underpinned by ongoing deal activity similar to that witnessed prior to the cuts being announced in October 2016, we expect 2017 to be another busy year.
