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| KN52063 |
| KEY NOTE RETAIL CHEMISTS AND DRUGSTORES : SEPTEMBER 2003 |
| Overview |
Editor: Matthew Dunn
ISBN:
1-84168-547-X

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This report covers: Retail chemists, drugstores, pharmacies, In-Store Pharmacies, prescription-only medicines, over-the-counter medecines, pharmaceuticals, personal care products, other products, increasing dominance of multiple chains, self-medication, NHS plan, prescription charges, price of pharmaceuticals, full-line wholesalers, short-line wholesalers, direct distribution, mail order, internet services, delisting, pharmaceutical product classification, reimbursement to community pharmacies, Sainsbury's emergency contraception scheme, expansion of pharmacy services in Scotland, DOH campaign, rise in prescription charges, abolition of resale price maintenance, deregulation of community pharmacies,
Companies & Associations covered include: AAH Pharmaceuticals, Alliance UniChem, Boots The Chemist, Lloyds Pharmacy, E. Moss, Superdrug, Proprietary Association of Great Britain, Royal Pharmaceutical Society of Great Britain, National Pharmaceutical Association, Association of the British Pharmaceutical Industry, Prescription Pricing Authority, National Institute for Clinical Excellence, Boots the Chemists, AAH Pharmaceuticals, Lloyds Pharmacy, Alliance Unichem, E Moss, Superdrug, National Co-operative chemists,
| Executive Summary |
| 1. Market Definition |
| REPORT COVERAGE |
| MARKET SECTORS |
| Retail Chemists |
| Drugstores |
| In-Store Pharmacies |
| PRODUCT SECTORS |
| Prescription-Only Medicines |
| Over-The-Counter Pharmaceuticals |
| Other Healthcare Products |
| Personal Care Products |
| Other Products |
| MARKET TRENDS |
| Office of Fair Trading Report |
| Increasing Dominance of Multiple Chains |
| Self-Medication and the NHS Plan |
| Household Expenditure on Pharmaceuticals |
| Table 1: Daily Household Expenditure on Medicines and Other Sectors (£ per day), 2000/2001 |
| ECONOMIC TRENDS |
| Population |
| Table 2: UK Resident Population Estimates by Sex (000 and percent), Mid-Years 1998-2002 |
| Gross Domestic Product |
| Table 3: UK Gross Domestic Product at Current and Constant 1995 Prices (£m), 1998-2002 |
| Inflation |
| Table 4: UK Rate of Inflation ( percent), 1998-2002 |
| Unemployment |
| Table 5: Actual Number of Unemployed Persons (million and percent), 1998-2002 |
| Household Disposable Income |
| Table 6: Household Disposable Income (£ and percent), 1998-2002 |
| MARKET POSITION |
| The UK |
| Table 7: Expenditure on NHS Pharmaceuticals by Value and as a Share of Total NHS Expenditure (£m at msp and percent), 1980-2001 |
| Overseas |
| Table 8: Expenditure on Pharmaceuticals as a Proportion of GDP by Country ( percent), 2002 |
| 2. Market Size |
| THE TOTAL MARKET |
| Table 9: The Total Market for Retail Chemists by Value (£m at rsp and percent), 1998-2002 |
| BY Product SECTOR |
| Over-The-Counter Pharmaceuticals |
| Table 10: Sales of OTC Pharmaceuticals by Retail Chemists by Value (£m at rsp), 1998-2002 |
| Prescription-Only Pharmaceuticals |
| Table 11: Number and Value of Prescriptions Dispensed by Retail Chemists in the UK (million and £m), 1996-2001 |
| OVERSEAS TRADE |
| Imports and Exports |
| Table 12: Overseas Trade in Pharmaceuticals in the UK (£bn), 2002 |
| 3. Industry Background |
| RECENT HISTORY |
| Abolition of Resale Price Maintenance |
| Pharmacy in the Future |
| Price of Pharmaceuticals |
| Prescription Charges |
| INDUSTRY SYNOPSIS |
| Table 13: Industry Synopsis Dispensing Chemists (£000, percent and £), 2003 |
| NUMBER OF COMPANIES |
| Table 14: Number of Registered Pharmacies in Great Britain, 1998-2002 |
| EMPLOYMENT |
| REGIONAL VARIATIONS IN THE MARKETPLACE |
| DISTRIBUTION |
| Full-Line Wholesalers |
| Short-Line Wholesalers |
| Specialist Distributors |
| Direct Distribution |
| Mail Order and Internet Services |
| HOW ROBUST IS THE MARKET? |
| Retail Chemists |
| Drugstores |
| LEGISLATION |
| The 1987 NHS Contract for Pharmacies |
| Reimbursement to Community Pharmacists |
| Pharmaceutical Product Classification |
| Delisting |
| KEY TRADE ASSOCIATIONS |
| The Association of the British Pharmaceutical Industry |
| The Association of the European Self-Medication Industry |
| The Company Chemists' Association |
| The Co-operative Pharmacy Technical Panel |
| The National Pharmaceutical Association |
| The Pharmaceutical Services Negotiating Committee |
| The Pharmaceutical Society of Northern Ireland |
| The Proprietary Association of Great Britain |
| The Royal Pharmaceutical Society of Great Britain |
| 4. Competitor Analysis |
| THE MARKETPLACE |
| MARKET LEADERS |
| AAH Pharmaceuticals Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Alliance UniChem PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Boots The Chemists Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Lloyds Pharmacy Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| E Moss Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Superdrug Stores PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| OUTSIDE SUPPLIERS |
| Manufacturers of Pharmaceutical Products |
| Table 15: Leading Players in the UK Market for OTC and Primary Care Prescription Pharmaceuticals by Value and Market Share (£m and percent), 2001 |
| MARKETING ACTIVITY |
| Table 16: Main Media Advertising Expenditure by Retail Chemists and Drugstores by Company and Product Range (£000), March 2001-2003 |
| 5. Strengths, Weaknesses, Opportunities and Threats |
| STRENGTHS |
| Weaknesses |
| Opportunities |
| Threats |
| 6. Buying Behaviour |
| MEDICAL CONDITIONS |
| Table 17: Incidence of Common Medical Conditions in Previous 12 Months ( percent), March 2003 |
| Usage of Chemist Products |
| Table 18: Usage of Chemist Products in Previous 12 Months ( percent), 2002 |
| Purchasing by Type of Outlet |
| Table 19: Consumer Purchase of OTC Pharmaceuticals by Type of Outlet ( percent of adults), 2003 |
| The National Health Service |
| 7. Current Issues |
| DEREGULATION OF COMMUNITY PHARMACIES |
| Addiction to OTC Pharmaceuticals |
| Sainsbury's Emergency Contraception Scheme |
| Abolition of Resale Price Maintenance |
| Rise in Prescription Charges |
| Department of Health Campaign |
| Expansion of Pharmacy Services in Scotland |
| 8. The Global Market |
| MARKET SIZE |
| Table 20: Balance of Trade in Pharmaceuticals by Country (£bn), 2002 |
| Leading Global Players |
| Table 21: Market Leaders in Global Pharmaceuticals by Value and Global Market Share (£m and percent), 2001 |
| MAJOR TRENDS |
| The Internet |
| Consumer Behaviour |
| Table 22: Annual Expenditure on Pharmaceuticals per Person by Country (£), 2001 |
| The Future |
| 9. Forecasts |
| INTRODUCTION |
| ECONOMIC TRENDS |
| Population |
| Table 23: The Forecast UK Resident Population by Sex (000 and percent), Mid-Years 2003-2007 |
| FORECASTS 2003 to 2007 |
| Table 24: The Forecast Retail Chemists Market by Value (£m at rsp), 2003-2007 |
| FUTURE TRENDS |
| Office of Fair Trading Report |
| Expansion of Services |
| 10. Company Profiles |
| Aah Pharmaceuticals Ltd |
| Alliance Unichem Plc |
| Boots The Chemists Ltd |
| Lloyds Pharmacy Ltd |
| E moss ltd |
| Superdrug Stores Plc |
| Further Sources |
| Associations |
| General Sources |
| Bonnier Information Sources |
| Government Publications |
| Other Sources |
| Overall growth in the market for retail chemists remains restricted by government legislation, controlling the location and number of dispensing pharmacy outlets. A system of registration in the form of the National Health Service (NHS) Contract for Pharmacies has kept the number of retail chemists constant since its introduction in 1987. In 2002, the total market for retail chemists was valued at £7.99bn. (This figure includes the value of in-store pharmacies but not drugstores.) |
| Both retail chemists and drugstores supply over-the-counter (OTC) pharmaceuticals, other healthcare and personal care products. Larger outlets also sell gifts and household goods. Operators of retail chemists also generate income from dispensing prescription-only medicines (POMS) and from retail sales of a wider range of OTC products. |
| Due to the limited availability of NHS dispensing licences, retail chemist chains are generally only able to expand their presence in the market through the acquisition of existing outlets. The market is led by a few key players the largest being Boots The Chemists which has increased its presence in the market at the expense of the independent sector. Both retail chemists and drugstores have felt the impact of the overall increase in competition in the UK retail market, particularly from multiple grocers and out-of-town retail parks. Following the abolition of the resale price maintenance (RPM) on OTC pharmaceuticals in 2001, supermarkets have been able to offer increasingly competitive prices on these products. |
| As part of its NHS Plan, the Government has introduced a number of initiatives to encourage the role of pharmacists and the use of OTC pharmaceuticals in order to curb spending on its NHS drugs bill and reducing time spent at general practitioners (GPS). |
| At present, there is a great deal of uncertainty in the retail chemists market following an Office of Fair Trading (OFT) report, which recommended relaxing the current licensing restrictions in a bid to increase competition, reduce prices and offer longer opening times. Any such move would serve to significantly increase the number of in-store pharmacies in multiple grocers. The Government has already indicated that it wishes to find a 'middle way' which opens up the market, whilst still protecting community pharmacies. At the time of publication, the Government announced that it was to reject, in part, the OFT recommendations. However, as Key Note anticipated, it still plans to partly deregulate the market. |
Text © 2003Key Note
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Last updated by Amanda Porteous October 2003