Business Outlook 2025 | Pharmacy

The calling of a swift general election in July 2024 caught many by surprise and, frustratingly for the sector, this sidelined any potential announcement of a new funding deal as this fell foul of the pre-election sensitivity period. Following Labour’s landslide election victory, the Party appointed Stephen Kinnock as its new Pharmacy Minister, along with a host of other appointments across healthcare. Also of note, Pharmacists Sadik Al-Hassan and Taiwo Owatemi now sit as parliamentary MPs, which, one would hope, will provide better insight into the sector’s challenges and drive the necessary changes from the inside. Whilst any funding announcement was delayed in 2024, it is hoped that more positive news will be received in early 2025. 

A minor boost was also received by the sector with the introduction of the Pharmacy First service in England, which has already been operating successfully in both Scotland and Wales (CAS) for a couple of years now. The implementation wasn’t without its challenges, however, with some minor adjustments to activity thresholds in October last year, it is hoped that the delivery of the service will continue to improve to the benefit of patients, and importantly provide much-needed additional income to contractors.

​Throughout 2024, transactional activity was buoyant despite ongoing operational challenges. In the 12 months to November 2024, we completed 222 pharmacy sales, more than double the amount for the preceding year. 36% of these were corporate disposals which we expect to subside in 2025 and be replaced with an increasing volume of independent sales.

Movement in the average price of sold assets, year-on-year.

2024 was a record year for transactional activity, with deal volume at an all-time high despite ongoing operational challenges and cost pressures. The distressed pharmacies that came to the market all generated significant interest from buyers keen to acquire competitively priced opportunities on both a local and regional basis.

However, the negative price index in 2024 was a product of the high numbers of smaller pharmacies and corporate disposals sold in the first half of the year. Encouragingly, the last quarter saw a vast increase in the average value of the pharmacies being added to our pipelines (offers made and deals being accepted), which will no doubt positively impact our price index in 2025.

We anonymously surveyed pharmacy professionals across the country to gather their views on the year ahead. 

• Cost challenges will remain a key factor in the market, none more so than the increase in National Living Wage (NLW) from April 2025
• It is hoped that, with an improved funding settlement, levels of distress in the sector will subside
• A continuation of the improvement we saw in Q4 2024 in the volume of independent sales as corporate disposal processes start to subside
• Improved appetite from group operators to acquire as some cost pressures stabilise
• Private equity is expected to renew its focus on the sector, as it is one of the few primary care sectors not to have seen significant investor appetite