Concerns are being raised that the Scottish network of Boots high street pharmacies could be radically cut after the sale of its parent company to a private equity firm.

One MSP says he fears any pharmacy that doesn’t make significant profits will be closed or sold.

The union representing most pharmacists employed at Boots says the precedent set when LloydsPharmacy changed hands makes the deal ‘particularly worrying’, but says it hopes the new owners will instead invest in building the Boots business in Scotland.

Boots’ American parent company, Walgreens Boots Alliance (WBA) has agreed to sell their businesses to US private equity group Sycamore Partners for $10b.

Scottish Conservative Health and Social Care spokesperson, Sandesh Gulhane MSP says that could spell the end for Boots outlets in smaller communities.

He told the Pharmacy in Practice conference that he has “huge reservations” about what the deal will mean for Scotland:

“I don't generally see a business being sold as a problem,” Dr Gulhane told his audience of pharmacists and pharmacy technicians, “But pharmacy is different, and the pharmacy part of Boots is different.

“How much profit do you make out in rural areas compared to how much profit you make in urban areas?

“My concern is that, if you have venture capitalists whose job is to make money, they will end up closing out all those pharmacies that don't take money, however vital they are.”

The Pharmacists’ Defence Association (PDA), the independent trade union representing pharmacists – including 70% of those employed by Boots – says in a statement:

“The PDA recognises why the possibility of private equity ownership, and the inability to influence that, may be particularly worrying to pharmacists and other employees who have so recently seen what happened in the UK community pharmacy sector in the case of LloydsPharmacy.”

LloydsPharmacy was taken over by German company Aurelius which retained the AAH wholesaling and Lloyds online businesses but disposed of the entire community pharmacy estate. Over 190 of their pharmacies were in Scotland.

Maurice Hickey, Head of Policy for PDA Scotland, added:

“If the sales of the Boots estate is to proceed in much the same way as the Lloyds sale did, then I would expect to see staffing cut to the bone, a total lack of investment in services and property, and an upsurge in unscheduled pharmacy closures.

“The experience of the process of disposing of the LloydsPharamcy branches was not good for staff, not just pharmacists. It led to much reduced levels of service to patients that on occasion were harmful.

“There were serious concerns around the disposal of the Lloyds pharmacies, so it is incumbent on all of us, government, NHS, regulators and trade unions to ensure these concerns are properly addressed this time.”

The PDA says it is aware of speculation that Sycamore may split Boots out of the multinational corporation and pass the UK business to new owners.

The union says in its statement that there is a real opportunity for new owners if they invest in the high street chain:

“It can be assumed that any potential new owners would implicitly only buy a business that they believe they can take more value from, so at some level change will follow, but that need not be negative.

“A new owner could invest in the business to earn more longer term, or do things differently in ways that add value to employees, patients and customers as well as shareholders.”

Sycamore Partners says it has “confidence in WBA’s pharmacy-led model and essential role in driving better outcomes for patients, customers and communities”.

In a statement, Managing Director of Sycamore Partners, Stefan Kaluzny, states:

“For nearly 125 years, Walgreens, and for 175 years, Boots, along with their portfolio of trusted brands, have been integral to the lives of patients and customers. Sycamore has deep respect for WBA’s talented and dedicated team members, and we are committed to stewarding the Company’s iconic brands.”

 

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