The Pharmaceutical Journal
Vol 268 No 7195 p557-561
27 April 2002

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Pharmaceutical Services Negotiating Committee (www.psnc.org.uk)
Office of Fair Trading (www.oft.gov.uk)

Changing control of entry rules will not increase convenience for patients

Changing the rules that control the allocation of National Health Service contracts to pharmacies will lead to the formation of clusters of pharmacies around doctors' surgeries, not to increased convenience for patients, the Office of Fair Trading has been warned.

Barry Andrews and Sue Sharpe, chairman and chief executive, respectively, of the Pharmaceutical Services Negotiating Committee told OFT staff investigating the pharmacy market on 16 April that the needs of health planning should prevail over competition concerns. The important thing was to ensure easy access to pharmacies.

The PSNC representatives emphasised that the major customer for pharmaceutical services was the Department of Health and that its proposals for local pharmaceutical services contracts introduced new competition to the market for pharmacy.

A paper prepared for the OFT by the PSNC, pointed out that the OFT was wrong to interpret limits on NHS contracts as a system that regulates where pharmacies can open. It was the Secretary of State for Health, empowered by the Medicines Act 1968, who approved pharmacy openings and NHS contracts were not required for the operation of pharmacies.

The OFT had said that it was important for a convenient service to be available for people to be able to buy over-the-counter medicines. The PSNC suggested that it was market forces, not contract restrictions, that determined the availability of such services. In most locations, pharmacies were simply not viable without the income derived from NHS dispensing.

The PSNC contended that the OFT's own evidence, when it successfully quashed resale price maintenance on medicines, showed that the main reason for people visiting pharmacies was to have NHS prescriptions dispensed. This meant that the impact of the regulations governing NHS contracts should be evaluated primarily to see how far they met the interests of the Government in achieving its health policy objectives.