Q&A with Jonathan Board and Vikash Patel, Managing Director at Enimed Group

This is a transcript of the interview which ties in with our Business Outlook 2025 report. 

Jon: I’m Jon Board, Head of Pharmacy at Christie & Co. I’m delighted to be joined by Vikash Patel from Enimed. To start, could you give us a brief history and overview of Enimed?

Vikash: Enimed Limited was created circa 15 years ago by my wife and I. We started with one independent pharmacy and grew gradually in the first half of those 15 years, one by one in the traditional way - buying retirement sell pharmacies over a number of years. Then, really, the nucleus of our company is two large acquisitions that we've done over the last five/six years. The first one is the Manichem Group which we acquired in January 2019, which is a group of 20 stores, and then the purchase of the Medipharmacy Group just over a year ago.

Jon: You've made a variety of acquisitions in recent years, and I'm sure a lot of opportunities come across your desk all the time. What is it you're looking for and how are you analysing those opportunities as to whether they fit with the Enimed ethos going forwards?

Vikash: A few years ago, the variance in the types of pharmacies or the units that came up for sale was quite low, I would say. So, you’re typically seeing a lot of retirement sales with similar sorts of dynamics in terms of challenges, to be able to acquire those stores, integrate them, and deliver perhaps better performance. The nature of the units on offer has changed a lot in the last few years, we've had a lot more corporate divestments from the likes of Lloyds and some of the other big corporates out there. They came with much less information, so you had to rely a lot more on your operating experience, knowing the competitive dynamics of the pharmacies on a local level, but also, having a reasonably strong infrastructure to be able to incorporate those stores and bring the staff on board with you. So, the challenges have changed. The certainty of what those pharmacies can deliver over the medium-term has also changed substantially, so you're not able to forecast as well what you think the pharmacy can deliver, and that's been a big challenge.

Jon: When you've bought the sort of corporate disposals - the likes of Lloyds and others that you mentioned - how have you found the integration of those teams and those people into your business? Is that something that you can fix quickly?

Vikash: That has been a challenge. There have been some good and bad cases. But, overall, the dynamics of how those colleagues have been supported by their previous employers versus how they are being supported by us is very different. Some teams have adopted the new culture and embraced it quite quickly, others have maybe found it a little bit more difficult, and it's been a challenge for us to go through that exercise. But, by and large, I would say, we've managed to successfully do that because, in the end, they feel that they're being more supported than they were previously by larger corporates where perhaps they weren't having as much personal touch as they do with the smaller group.

Jon: In terms of the item numbers and income from those corporate disposals, do you see those as an area of high growth? Or again, is it case by case where they where they work well?

Vikash: Overall, we would say that the volume growth numbers that we're seeing have maybe been slightly above what we're seeing on average for the rest of the group, for the simple reason that some of these stores have been underperforming for a good degree of time.

There have been cases, though, where that hasn't worked. So, it has not been perfect, and there are two or three examples that come to mind where we've seen no growth at all because what we have realised is, when we've purchased from a corporate, any volume that has been lost in the preceding year, it can be quite tough to regain that, because with the advent of ETP, once a patient is not with you anymore, it's not so easy to get that patient back. So, you do have to tread quite carefully when looking at some of these.

Jon: From an operational perspective, what are the big challenges you're currently experiencing?

Vikash: Firstly, I would say staffing is number one. The ability for us to be able to recruit sensibly over the last five, six years, basically since Covid, has been, really, really tough, and it remains the case today. We've obviously got lots of challenges with other healthcare sectors vying for the same staffing that we are. Obviously, all the cost-of-living pressures and inflationary pressures going on as well, have meant that staffing has been our biggest challenge.

We've always been very positive and enthusiastic in wanting to embrace any new services that the contract offers us. We had a real issue, I would say about five, six years ago when Covid occurred, where essentially all of our service provision, as it was the case for all contractors, really, all but disappeared, so restarting that was quite tough, especially being a group.

It took us maybe a bit longer than it would have taken an independent contractor to do, but we got there in the end. It took a year or so longer than we would have hoped. We've tried to adopt all the NHS services that are on offer for us today. Pharmacy First obviously being the latest. That's been the biggest one in the last financial year. It's been a real challenge because GP adoption for that service is still quite poor. The teams have been great at wanting to embrace that service.

Jon: Do you see a bit more engagement from both sides on the Pharmacy First scheme?

Vikash: As far as the whole scenario with GPs goes, I think it could take some time. A lot of trust that needs to be rebuilt between GPs and pharmacies, behind how that service is going to be delivered. We feel that, as a sector, we are doing as much as we possibly can but we need some support from the Government to promote the service which is a flagship service for them, but we feel we haven't really had the support that we should have got from them thus far.

Jon: So, building on the services theme, are you embracing many private services? Is there something that you're focusing on or looking to focus on?

Vikash: With private services, absolutely. We, are again, much like I said with NHS services, private services have now, over the years, become an essential part of what we do due to the struggles that we've had with the core contract. We have, for years, been delivering travel services in various stores within the group, and we continue to do that. We've looked to try and enhance that offering going forward. In terms of other private services, at this stage, we haven't managed to roll out a huge amount, but we all focus quite a lot on some of the high-demand services out there at the moment, such as weight loss clinics, prescribing clinics, etc. these are all things that are in the pipeline. But, Pharmacy First, to a large extent over the last 12 months, has taken over from that.

Jon: I’ve heard a lot of people talking about weight loss as the next opportunity. I'm sure, in time, we'll see a bit more structure around how that's offered and where that's offered, because it's probably a bit sporadic at the moment.

Vikash: At the moment, it's been largely confined to online services and remote provision to the patient. But we do feel that there's a big opportunity for community pharmacy and bricks and mortar pharmacy, in particular, going forward, because, the regulatory landscape is now catching up, as it should, and that will lend itself towards offering that service in a far more customer-friendly manner in-store.

Jon: The overarching theme from the pharmacy market over the last year and a half is the pharmacy funding, the long-awaited announcement. Clearly, we're still waiting. Any thoughts or hopes in terms of what is announced, as and when that comes?

Vikash: I'm hopeful about what the new contract will offer. Obviously, at this stage, after what the sector has had to endure over the last seven, or eight years, it's difficult to be too positive. The sector withstood phenomenal amounts of pain that have been inflicted on us, and we're still largely speaking standard, albeit we're battered and bruised at this point. Yes, the new funding should be imminent - we've waited a long time - I think whatever is given to us, we will try to adapt as we always do as a sector. But it's essential that the Government understands just how much they've squeezed the sector over the last few years, and that there's very little left for them to go for now.

Jon: Do you think they do understand that? And do you think they've recognised what has been said and what has been put forward as the basis for these negotiations?

Vikash: I think the Government does understand. The numbers are there in plain sight for people to see. What they will offer will be a function of how well we negotiate our position, how well we articulate the challenges we're facing, and how united the sector remains. I think all of those things need to be done in conjunction, and I'm hopeful in the sense that, for the first time in the 15 years that I've done this, the sector is as united as I've seen it. There's still work to be done, but it is pretty united in its position at this stage. Going forward, I'm just hopeful that this one-year contract that we are going to receive, which is an interim contract, forms a very good basis for negotiations and for future years, which is as important as the current negotiation.

Jon: How is automation in your mind, and how are you seeing that impact your business going forwards?

Vikash: Automation is playing a huge part in what we need to and are looking to do in pharmacy. Our journey started with automation on the MDS side of the business, the most labour-intensive part of what we do.

We acquired a SynMed robot back in 2020/2021, which meant that we were looking to automate all of the MDS work that we were doing in all of the branches in the group. That was a huge challenge at the time, in the middle of Covid-19, and a big learning curve for us to get through, but we managed to do that and it did help us when we needed to reinvigorate services later on post-Covid lockdown, because we had freed up some capacity within the group at that point.

Fast forward to where we are today, four/five years on, MDS automation is basically now a completely integral part of what we do. We're now looking forward to potentially looking at automation offers within the OPD part of what we do. We have plans within our central function to expand that over the next 12 months, and we're looking to put in capital expenditure for that, but a lot of it is going to depend on what comes out from the funding contract and the direction of travel because, until we have clarity on that, it's very difficult to make long-term commitments.

Jon: What are your plans for Enimed over the next two to five years? Where do you see your group moving?

Vikash: The group has expanded quite a lot in recent years. So, we've gone through a period of fairly rapid expansion. We foresee a period of consolidation, to be quite honest, and a lot will depend on what the contract offers us going forward.

We need to adapt the way that we work, particularly in the dispensaries that we operate. We need to adopt automation, and all these things require a lot of capital investment. We're prepared to make those capital investments once we know what the funding announcement looks like. But it's very difficult for our business or for any other pharmacy group out there or independent operator to be able to make long-term capital investment decisions until we know what our funding is going to look like.

Jon: It's the certainty of knowing what you've got and how you can then structure and plan your business accordingly.

Vikash: I think certainty is as important as the quantum and the direction. I've got to be careful that we don't vie for too much certainty for quantum because, without a decent quantum, it's not going to work. But, we've waited a long time, so I think the sector is crying out now to get some certainty from the Government over the coming months.

Jon: Absolutely. Well, hopefully, that news comes sooner rather than later, and the sector can have that stability that it needs.

To watch the full video interview, click here.