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Dorset Integrated Care Board is to withhold over £9,000 in remuneration from Jhoots Pharmacy after the chain failed in its appeal against a breach notice issued when one of its branches was forced to close.  

Jhoots bought the pharmacy at Lyme Regis Medical Centre in late 2023 as it used a £17.4m bank loan to expand its footprint by acquiring 36 former LloydsPharmacy branches. 

But a dispute with the landlord – who allegedly refused to negotiate a further lease for the pharmacy site – led to a bailiff notice being issued on April 14, 2024, just one month after the change of ownership had completed.

Delayed closure application

This meant that Jhoots staff were unable to enter the premises or deliver any pharmaceutical services from the site, and that patients were transferred over to a neighbouring Jhoots branch at Lyme Regis Community Care on Uplyme Road. 

The chain met on a weekly basis with NHS South West Collaborative Commissioning Hub (NHSWCCH) to try and resolve this and “a number of contractual issues at various sites across the South West,” according to representations made by NHSWCCH as part of a dispute that recently went before appeals body NHS Resolution.

But the company struggled to decide whether it wanted to apply for a short-notice market exit or a relocation, and only confirmed on June 10, 2024 that it would be applying for market exit. 

Considering the company’s exit application on September 5 last year, the commissioner decided to reject it on the grounds that “formal notice could have been given in March, when the contractor knew there may be difficulties with the lease”. 

Jhoots was then told that the full three months’ notice was required, meaning the contract formally ended on September 4. 

This ultimately led to a breach notice being issued on January 26, 2025, with NHSWCCH also deciding to withhold £9,398 from the company. To arrive at this sum, the commissioner assessed the average monthly increase in items at the Uplyme Road branch.

The commissioning hub apologised for the delay in issuing the notice, which it attributed to “the uniqueness of this situation, alongside the team dealing with multiple contractual breaches for the same contractor”. 

'Clearly in breach'

Jhoots sought to challenge the breach notice and the decision to withhold monies, arguing that “there is no opportunity for the breach to be repeated as the pharmacy has closed”. 

“Practice payments are no longer being made by the NHS to the pharmacy and we would not have received any income over the period specified,” Jhoots added in an email appealing the decision. 

Explaining the delay in submitting the closure notice, Jhoots said: “We had to exhaust all options and there was no guarantee that if a closure notice was submitted it would be able to be rescinded.”

But NHS Resolution upheld the commissioner’s original decision, stating that Jhoots should have initiated exit proceedings “as soon as practicable” and that it had failed to do so. 

“The appellant was clearly in breach of its terms of service when the pharmacy premises were not open from the period of April 17, 2024 until September 4, 2024,” said NHS Resolution head of appeals Jonathan Haley as he confirmed the decision to issue the breach notice and withhold remuneration amounting to £9,398.

Jhoots has been approached for comment. 

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