Alliance Boots has rejected speculation that Government cuts to pharmacy payments will hit profits (Retail WeekOnline, October 5) and said that it is trading ahead of expectations.

Observers feared that the new funding regime might hit profits at the health and beauty giant, acquired last year by private equity giant KKR in a£9 billion deal, by as much as£80 million and add to the debt syndication problems of the banks that underwrote the transaction.

But an Alliance Boots spokesman said, the sums involved as a result of the so-called “clawback” would amount to less than£10 million. He said that changes to the NHS funding regime will be reflected in the prices paid by retailers to wholesalers and manufacturers and the pharmacy industry was well-placed to cope with them.

“The facts and implications have been misrepresented,” the spokesman said. “The impact on Alliance Boots will be largely mitigated by the actions we have taken so far and will take in future to deal with the clawback issue.

“The clawback mechanism is something that the industry has had to address whenever the Government takes an initiative like this and Alliance Boots, like all the other players in the industry, will do its part in reducing the cost of medicine.”

He dismissed concerns that Alliance Boots would be financially disadvantaged and maintained: “We have all the financial firepower to invest in the business that we need.”

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