The Pharmaceutical Journal Vol 267 No 7179 p881-884
22-29 December 2001

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Letters to the Editor

Remuneration (4 letters)

We dispense two prescriptions for the price of one

From Mr N. Baumber, FRPharmS

Hazel Blears recent letter to pharmacy owners refers to the policy that the Government does not seek "to pay pharmacies by piece-work" and implies that we are paid for more than dispensing prescriptions.

What we are precisely paid for is debatable and what the Government intends to pay for, through a new form of contract, is still a mystery, but 76 per cent of our income is related entirely to piece-work and to prescription volume. The global sum itself relates only to a limited and dated view of supply and not in any positive way to professional services, not to the costs of current practice and not to the provision of capital for development. The cumulative shortfall since 1988 is greater than £50,000 per pharmacy.

What is clear is the Department of Health's attitude to remuneration over a 12-year period in which it has purposefully driven margins down in an almost straight line. Income per prescription is one third less in real terms (ie, adjusted for inflation using the Retail Price Index) than in 1988, although we dispense one-and-a-half times as many prescriptions. Expressed in terms of efficiency and value for money, we now dispense two prescriptions for the price of one.

Even more worrying is the skew of the global sum away from the pharmacy base that provides access for people to good local services. My analysis in 1996 (PJ, 1 February 1997, p174) showed that 54 per cent of pharmacies were sustained by only 35 per cent of the global sum. Because increases are delivered in relation to prescription volume, only one third of any annual increase filters through to the lower 56 per cent or so of contractors. The majority have not benefited by the 4 per cent (in a decade) to which Hazel Blears alludes, but by less than 1.5 per cent.

Unlike any other business, we cannot set margins or re-engineer the product to fit the price the customer is prepared to pay. We cannot determine volumes or prices. We are not entitled to retain discount. We live under the threat of the Department clawing back discounts that were never made nor properly defined. Under these constraints the Department should be under a duty of care to pay heed to the viability of all contractors and allow funding for the evolution of the dispensing and professional process, because for most contractors profit is the only source of capital for reinvestment in the National Health Service.

If the Department wants to be supportive, it can put money into cognitive services through a new form of contract, but it must not ignore the failings of the dispensing contract. Both have to be properly structured to prevent the demise of the independent sector.

Noel Baumber
Grantham, Lincolnshire

More work for less money

From Mr E. O. Opaleke, MRPharmS

I am saddened to read about the recent reduction in dispensing fees for community pharmacists (PJ, 24 November, p733). The effects of continued erosion of sources of income for community pharmacy in its present form is unacceptable in the absence of a compensating alternative. The single shop independent pharmacy owner now finds that he or she is working more for a reducing financial return.

Pharmacy owners are expected to train their staff. How are they to fund this training and the subsequent increased wage demand from the better trained staff? There is no doubt that a lot of pharmacists are disillusioned and worried about what next to expect or do.

To remain viable there may now be a tendency to reduce efficiency and quality to contain costs. The only alternative (in the absence of immediate intervention by the Government) is frustration and bankruptcy, leading to closure of the pharmacy and reduced access to health care for the consumer.

Is it not time for the decision makers to think of the longer term effect of their actions? Stop making pharmacy the batting ball for health care proposals of the Government.

The increased commercialisation of pharmacy over the years has significantly dented the professional image of pharmacists. We are seen by some as "middle" people who just buy goods, stick them on shelves and make cool profits on sale without further efforts. In my view direct commercial activity has to give way for the profession to survive with integrity.

We need a new formula which recognises and rewards individual pharmacists' input into health care as opposed to prescription volume-based remuneration, which is grossly flawed and subject to pen pushing politics.

Pharmacists need significantly more skills to meet the Government's expectations. This can be achieved partly by continuing professional development, but more importantly by proper recognition and reward from the purchasers of pharmacy services, including the Government and consumers.

Payment of a capitation fee or salary for delivery of specific professional pharmaceutical services within a defined community plus properly defined additional payments for further services, including dispensing, up to a calculated limit per individual pharmacist will ensure survival of the profession without compromising patient safety.

If control of entry is getting in the way of professional survival and development, my opinion is that it should go with appropriate compensation provided for losses. Community pharmacists should no longer provide financially unjustifiable services.

The practice of pharmacy should not be for the fickle minded or the commercial opportunist but for the true professional at heart and in practice. We must refocus our professional aspirations and take up continuing professional development. At the same time our representative bodies should start negotiating for community pharmacists as opposed to community pharmacy contractors before there is no one left to negotiate for.

Emmanuel Opaleke
Harrow, Middlesex

New roles need new money

From Mr J. Williams, MRPharmS

What planet does Barry Shooter live on (PJ, 8 December, p816)? He asks what right the National Pharmaceutical Association has to protest about the latest remuneration imposition. As community pharmacy's trade body it has every right.

Mr Shooter appears to be happy with a 10p cut in dispensing fee. I am not, and cannot believe that he is siding with the Department of Health in blaming the system. The present arrangement, which has no link between the prescription volume and the global sum, is well past its sell-by date and in urgent need of a radical overhaul. The NPA stance highlights the limitations of the system and emphasises what I suggest all contractors believe: new roles require new money.

John Williams
Bromley, Kent

Heading for a meltdown

From Mr A. B. McCoig, MRPharmS

There cannot be a single community pharmacist who does not identify with the sentiments set out in the "Broad Spectrum" article last week (PJ, 15 December, p848).

I was struck immediately by the similarity of content and tone with the article published by Patel and Boorman two years ago (PJ, 4 September, 1999, p361) when Frank Dobson was at the Department of Health. Circumstances have changed since that time. We are now in an extremely tenuous position and substantially worse off as we are all aware.

Comparisons have been made with the write-off of the dentists' overpayments. There is no doubt that we are being dealt a raw deal compared with other health care professionals. Dentists, however, made one important step many years ago in protest over their treatment under their National Health Service contract — they resigned in massive numbers. Those who were left to deal with NHS patients are not exactly overpaid by any standards, but all ministers of health realise that to rattle the dental cage will bring that service to the point of collapse within the NHS; hence the write-off of the dental overpayments. As a matter of simple fact, there are few 100 per cent NHS dentists in Croydon — most run a substantial private practice and keep a small rump of NHS patients, which they steadfastly refuse to expand. My own dentist, who still treats me under the NHS, keeps appointments down to 12–13 minutes and makes no apologies for his briskness — he runs to stand still.

There is a lesson here for us all except that it is not possible to emulate the dentists' action. We cannot switch our business away from the FP10 flow rate under current economic conditions. What we are almost certainly heading for is a meltdown of the community pharmacy network on a similar scale to that experienced in the early to mid 1970s. There will be no need soon to be "seen" to protest — closures will be a far more graphic and effective way of getting across the problem in pharmacy today. The problem will then be the Government's to solve and solve it, it will. What is going on at the moment is clearly obvious to any outside observer: the Department of Health and the Treasury want to see where the financial break point lies.

Evidence of this is starkly put to us in phrases such as "pharmacy numbers seem to be remarkably stable" and veiled sarcasm at some of the goodwill prices paid for certain pharmacy businesses. Naturally they conveniently miss the point that the financial investment made by any pharmacist is on the basis of the return and sale at the end of a working career. Doctors and others working within the NHS have substantial NHS pensions to look forward to at their retirements —we do not.

Of more concern to the majority of pharmacy owners is that many almost certainly require the guarantee and backing of a major finance house or bank to underpin their day-to-day business activities. In common with the Department, and us, these people are not fools, and my fear is that the whole house of cards will collapse under the current pressure.

Hazel Blears has distanced herself deliberately from reality. She needs to sleep at night just like the rest of us. My guess is that in the near future, she will be in the middle of a nightmare manufactured by her own Department.

Andrew McCoig
Secretary,
Croydon Local Pharmaceutical Committee

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