Tough pill to swallow: Markets are expanding but operators are under intense pricing pressure

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. Several regulatory changes have been introduced over the past decade that 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 1.9%...read more.

Industry Statistics & Market Size
Revenue
£12.3bn
Annual Growth 14-19
1.9%
Forecast Growth 19-24
Profit
Employment
85,781
Businesses
5,124

Industry Threats & Opportunities

  • Operators have been supported by the rising popularity of electronic prescription services
  • PPRS has encouraged the dispensing of lower-price, lower-margin generic drugs
  • Low-cost generic drugs will continue to flood the market as patents expire
  • Industry Report - Industry Locations Chapter

    Most UK residents live relatively close to a pharmacy. For example, Boots claim that over 90% of the population are within a 10-minute drive of one of its pharmacies. Because the level of service between pharmacies does not greatly vary, consumers are likely to favour convenience when purchasing medicine. Therefore, the dispersion of industry establishments closely correlates to the location of establishments in the General Medical Practices industry (IBISWorld report Q86.210). Operators also aim to locate themselves in densely populated regions in accessible locations such as high streets.LondonLondon accounts for the largest proportion of industry establishments at approximately 13.9%. The...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
  • Generic medicines
  • The 2016 Community Pharmacy Reforms
  • Industry assistance
  • Current year
  • Market structure

    and profit

  • Chart: Revenue Growth

  • Industry Outlook
  • Revenue threats
  • Funding changes
  • Expanding offerings
  • 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
    ProfitPurchasesWagesAdvertising and marketingOther
  • 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
    Includes:
  • 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 offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
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    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
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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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