Healthcare services all across the UK have felt the strain of the coronavirus pandemic. Whether public or private, all healthcare services have felt the effects in some capacity. Two areas of healthcare that are seeing fundamental shifts are dentistry and over-the-counter pharmaceuticals. Both sectors of the healthcare industry are feeling the effects of the strain that the NHS is under. What we can observe is moves towards privatisation of these sectors to reduce the expenditure of the health service. But what does this mean for the future of the two sectors?
The dynamics of the UK pharmaceutical market are changing. It is an essential economic player within the United Kingdom. The wholesale turnover of pharmaceutical goods in the UK in 2018 was £49 billion. Pharmacies play a crucial role in consumer health in the UK, as many over-the-counter products are dispensed by a qualified pharmacist.
In 2018, the NHS changed the way that over-the-counter medicines were prescribed. Instead of GPs, nurses, or pharmacists prescribing over-the-counter medication to patients, individuals commonly buy OTC medicines at their local pharmacy or supermarket. The NHS published a document explaining the change in more detail. “The NHS has been spending around £136 million a year on prescriptions for medicines that can be bought from a pharmacy or supermarket, such as paracetamol. By reducing the amount the NHS spends on over the counter medicines, we can give priority to treatments for people with more serious conditions, such as cancer, diabetes and mental health problems.”
The coronavirus pandemic has had a significant impact on over-the-counter medication. When Covid-19 took hold in the UK in mid-March, the UK government encouraged those with mild but uncomfortable symptoms to take over-the-counter medication such as paracetamol or ibuprofen. Dominic Murdoch, managing director of health communications agency Verve, explained that pharmacies “saw an initial spike of demand from consumers who wanted to get new and repeat prescriptions filled and purchase some OTC staples like paracetamol.” He explained that after some time, consumers were reluctant to enter pharmacies for an OTC purchase due to the infection risk.
Despite the problems arising from the coronavirus pandemic, consumer trust in pharmacies is growing. Consumers are increasingly reliant on pharmacies for over-the-counter medicines as GPs and nurses are no longer prescribing them unnecessarily. For this reason, pharmacies function as a way to relieve some of the pressure placed on the NHS. As a result, private pharmacies are becoming the first port of call in the healthcare system.
The shift to over-the-counter medicines has inspired change in a portion of the UK population. Today’s consumers are typically more health-conscious than their predecessors. Millennials, in particular, are also big on ‘self-care’, which is the practice of taking action to preserve or improve one’s health. The term has gained traction in all areas of life over the last five years. Significantly, self-care has been a hot topic in the NHS for the past couple of years, and it appears to be having an impact. The scheme to encourage people to look after minor ailments is likely to have contributed to the sales value of over-the-counter medicines, which rose to £2.74 billion in 2019. As people trade unnecessary visits to their GP for over-the-counter treatments, the industry continues to grow.
There is an increasing trend towards deregulation of more medicines from prescriptions to over-the-counter status. More medicines were changed from prescription-only to pharmacy medicines in the last two years than over the previous decade. If used according to the instructions, OTC medicines will become less restricted to consumers who are looking to self-treat. This in turn relieves the strain on the NHS, and enables consumers to treat minor ailments quickly. In many ways, it is a win-win scenario for healthcare services and consumers.
In a previous article about health and wellbeing during the UK’s first coronavirus lockdown, we discuss how there is a shift towards private dentistry. The reason for this shift lies in the migration of experts. An increasing number of dentists are opening their own private practices. Many are citing their resignation from the NHS due to falling standards. Dentists have encountered difficult circumstances as they have provided 19 million fewer treatments since March this year when compared to the previous year. The British Dental Association (BDA) warns that hundreds of practices could be forced to close within the next year without financial support.
The virus has worsened several issues that the industry was already facing. The current inability to access care means that it is likely that demand for NHS and private services will increase. This should come as good news to private dental practices which can’t see as many patients as they could pre-pandemic. However, to reap the benefits of a later increase in demand, private practices need to survive. A survey conducted in April this year found that over 70 per cent of dental practices surveyed would struggle to remain financially sustainable for any more than three months. Indeed, private practices are projected to lose an average of approximately £71,000 by late 2021.
Yes, there is hope for private dentistry. In a previous article, we explain that private dentistry is, in fact, still in demand despite the effects of coronavirus. As NHS dental services reduce appointment and treatment availability, a larger proportion of people are seeking out private dental care. There has also been a significant increase in demand for cosmetic dentistry treatments, such as composite bonding. Online searches for the treatment have been doubling year-on-year since mid-2016.
The coronavirus pandemic has caused significant financial losses for thousands of dental practices. However, if private practices can pull through into 2021 and beyond, they will reap the benefits of NHS defectors and those seeking out increasingly popular cosmetic treatments.
Q1 and Q2 were partly spent fighting fires caused by the pandemic in investment and private equity circles. However, a new report by Invest Europe has revealed that private equity investment and fundraising has been resilient. Despite the financial uncertainty, investors and fundraisers are looking to the future. It is for this reason that investment in healthcare services such as over-the-counter pharmaceutical companies and private dental services could be fruitful. While both sectors are experiencing their own unique challenges, they are both moving in a direction that would make them financially lucrative.