OFT to investigate control of entry
The Office of Fair Trading is to examine the control
of entry regulations, which govern how National Health Service dispensing
contracts are granted, as part of a review of the whole market for pharmacy
services, the director general of fair trading, John Vickers, announced
on 3 October.
A spokesman for the OFT told The Journal
that the review will cover the whole pharmacy market. This could include
the registration of pharmacy premises with the Royal Pharmaceutical Society.
“The aim of the inquiry is to look at what the current
regulations are intended to achieve and whether they are achieving that.
We will look at the effects on consumers and the effects on the sale of
over-the-counter medicines. We will also look at the current state of
profitability of community pharmacies and the entry and exit to the market.”
The inquiry will involve a team of six to 12 investigators
from the OFT’s markets and policy initiatives division holding discussions
with interested parties. Outside expertise may also be brought in. The
inquiry is expected to last between six and 12 months. However, if the
OFT believes that enforcement action or a referral to the Competition
Commission is necessary then it could issue a direction to that effect
within two to three months.
The OFT says: “It is important for customers that
a convenient [pharmacy] service is available, because many want to purchase
OTC medicines with the benefit of a pharmacist’s advice, or need frequent
repeat prescriptions. Restrictions on where chemists can open potentially
have an effect on competition and not only on dispensing prescriptions.
The system will be reviewed to see how the present restrictions affect
competition and consumers and whether there are alternative ways of achieving
the public interest objectives behind the present arrangement.”
The OFT has five options. It can recommend enforcement
action by the OFT, make a reference to the Competition Commission, make
recommendations to the Government for changes to laws or regulations,
suggest consumer awareness campaigns, or issue a clean bill of health.
The Pharmaceutical Services Negotiating Committee
said that it recognised the power of the OFT, as a body independent of
direction or control by other Government departments, to investigate any
matter it chose to.
The PSNC says: “Control of entry regulations were
introduced to secure value for money for the NHS and the public who, as
taxpayers, pay for the services, and to secure ready access to pharmacies
for patients and customers. We will, of course, ensure that we assist
the OFT in its understanding of the issues, including the possible impact
on patient services of creating instability in the market.
“For contractors, faced with the uncertainties of
radical change in NHS structures, new roles, workload and manpower pressures
and concerns about future remuneration and service demands, this news
is inevitably unsettling and even threatening. The PSNC will work with
other bodies representing pharmacies to secure a satisfactory outcome,
but the period of uncertainty will inevitably continue for some time.”
The Royal Pharmaceutical Society’s President (Marshall
Davies) said: “The Society is concerned, in the public interest, to see
the provision of an appropriate network of pharmacies in the community
and the availability of the full range of medicines and pharmacy services
to the public.”
The OFT’s announcement was welcomed by Superdrug,
which said that it had campaigned for six years to have the control of
entry restrictions ended.
“Pharmacy provision in the United Kingdom is stuck
in a time-warp because of regulations introduced in 1987 which make it
difficult to open a new pharmacy in many areas,” Mike Keen, Superdrug’s
pharmacy superintendent said.
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