Poor treatment: Funding cuts and a rise in generic drugs have hindered revenue growth

Operators in the Dispensing Chemists industry distribute pharmaceutical products to consumers, meaning they play an important role in the UK health-care system. Retail and community pharmacies also sell over-the-counter medicines, provide professional advice, and carry out basic medical testing. Due to the nature of the industry, operators are subject to government regulations. Over the past decade, several regulatory changes have been introduced, which have altered the pharmaceutical retailing landscape. Increasing competitive pressure from supermarkets has also stimulated changes in the industry, and some operators have struggled to maintain healthy margins.Over the five years through 2018-19, industry revenue is anticipated to decrease at a compound annual rate of 2.1%...read more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • The introduction of NHS schemes to support pharmacies is expected to boost revenue
  • Funding arrangements will remain unchanged through the current year
  • Low-cost generic drugs are expected to continue to flood the market, threatening revenue
  • Industry Report - Starting a New Business Chapter

    The barriers to entry in the Dispensing Chemists industry are estimated to be high and increasing.Stringent regulatory requirements represent a significant barrier. Operators can only dispense NHS prescriptions if they possess an NHS community pharmacy contract. While non-contract pharmacies are free to open and sell pharmacy-only medicines and private prescriptions, operating and compliance costs are so high that it is often uneconomical to do so. Operators are also subject to intense pricing regulations such as drug tariffs and varying reimbursement arrangements. The Pharmaceutical Price Regulation Scheme (PPRS) is critical as it controls the profit and therefore prices of all licensed, branded and prescription medicines sold to the NHS. Pot...purchase to read more.

    Additional Insights for the Dispensing Chemists Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Dispensing Chemists Industry are

  • Experienced work force
  • Proximity to key markets
  • Easy access for clients
  • IBISWorld analysts also discuss how external factors such as NHS prescriptions volume and Population aged 65 years and over in the Dispensing Chemists industry impact industry performance..

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    What's in this report

    What is the Dispensing Chemists Industry?

    Operators in the industry dispense and retail pharmaceutical goods via community pharmacies and chemists. Pharmacies also provide other NHS services and sell over-the-counter medications and health-related products. This industry does not include non-health-related products or in-store supermarket pharmacies.

    Industry Products
  • Prescription only - proprietary or branded
  • Prescription only - generic
  • Pharmacy only
  • General sales listed
  • Industry Activities
  • Dispensing prescription pharmaceuticals
  • Retailing over-the-counter medication
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • NHS prescriptions volume
  • Population aged 65 years and over
  • Real household disposable income
  • Demand from supermarkets
  • Health consciousness

  • Current Performance
  • Demographic drivers
  • New services and supply chain models
  • Pricing pressures and revenue volatility
  • The 2016 Community Pharmacy Reforms
  • Industry assistance and current year
  • Market structure and profit
  • Chart: Revenue Growth

  • Industry Outlook
  • Revenue threats
  • Funding changes
  • Expanding markets
  • New products
  • Future concerns
  • Table: Dispensing Chemists Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Dispensing Chemists Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Perfume & Cosmetics Manufacturing
  • Perfume & Cosmetics Wholesaling
  • Pharmaceutical Preparations Manufacturing
  • Pharmaceutical Wholesaling

  • Products & Services
  • Prescription only - proprietary or branded
  • Prescription only - generic
  • Pharmacy only
  • General sales listed
  • Chart: Dispensing Chemists Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • People aged 65 and over
  • People aged between 45 and 64
  • People aged between 19 and 44
  • People aged 18 and under
  • Chart: Major Market Segmentation for the Dispensing Chemists Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Dispensing Chemists

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Dispensing Chemists Industry

  • Industry Globalization
    Boots UK Ltd, Lloyds Pharmacy Ltd, Bestway (Holdings) Limited,
  • Table: Boots UK Ltd - financial performance
  • Table: Lloyds Pharmacy Ltd - financial performance
  • Table: Bestway (Holdings) Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Dispensing Chemists Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Dispensing Chemists Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Community Pharmacies
  • Pharmacies that are responsible for providing NHS pharmaceutical services in the local area. Most services are provided under a contractual framework set out by the government.
  • General Sales List (Gsl) Medicines
  • Medicines that can be sold by a variety of stores including supermarkets, newsagents and petrol stations.
  • Health Inflation
  • Public expenditure on, or the cost of health care compared with general inflation rates.
  • Over-The-Counter (Otc) Medicines
  • Products sold without the need for a prescription.
  • Pharmacy-Only Medicines
  • Medicines that can only be sold in pharmacies. A pharmacist must make or supervise the sale.
  • Prescription Medicines
  • Medicines that must be prescribed by a medical practitioner or a health-care professional. In some instances, they are classed as controlled drugs.
  • Reimbursement Payment
  • The price paid to the manufacturer above the price set for branded drugs.
  • Release 1
  • Allows pharmacies to access electronic prescription messages from the prescription database.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Dispensing Chemists market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
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    This report on Dispensing Chemists:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Dispensing Chemists market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Dispensing Chemists, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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