Dispensing profits fall 25% from peak

The past three years have seen a precipitous drop in dispensing income, analysts have warned.

Nigel Morley, managing director of consultancy Surelines said profits peaked around 2005/6, but have since dropped by up to a quarter.

He said smaller dispensing practices may not be viable. 'You used to need about 500 patients to break even. Now you need 600 or 700.'

Analysts say this decline is partly due to factors affecting the entire pharmacy sector.

Geoff McKay, director of consultancy Stirling, said that 'the pressure dispensing doctors are feeling, wholesale suppliers are feeling too'. But he added that such practices were 'well placed' to provide extra community services, and thus keep up their income.

Mr Morley said that dispensing doctors may have been hit because many drug companies have withdrawn deals that directly target practices.

'Dispensing income is going down all the time,' he added. 'But we're a long way off dispensing becoming unprofitable.'

jonn.elledge@haymarket.com

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