The Pharmaceutical Journal
Vol 268 No 7197 p633-640
11 May 2002

This article
Reprint
Photocopy

News summary

Related websites
National Pharmaceutical Association (www.npa.co.uk)
Office of Fair Trading (www.oft.gov.uk)

Pharmacy rules work well, NPA states

The National Pharmaceutical Association has told the Office of Fair Trading that current regulations support the community pharmacy network well, and ensure ready and easy access for everybody to National Health Service pharmaceutical services.

At a meeting with OFT staff investigating the pharmacy market in Britain on 7 May, NPA representatives said that the rules allowed NHS dispensing contracts only when health authorities believe they are necessary or desirable in the area concerned.

The NPA believes the dependence of pharmacies on NHS dispensing for their viability means that abolition of the controls will lead to proliferation of pharmacies in or adjacent to GP surgeries. The end result would be clusters of pharmacies in these locations. It also believes that many new pharmacies would open in retail outlets which had failed to demonstrate either need or desirability under the present regulations.

John D'Arcy, chief executive of the NPA, said: "We had a constructive meeting with the OFT and will now work on our written submission."

The OFT is examining the market for retail pharmacy services and, in particular, the system of awarding of NHS dispensing contracts to pharmacies. When it announced the investigation in October 2001 it took the view that pharmacies fell into three main categories: neighbourhood or independent community pharmacies; high street chains; and supermarket pharmacies. The OFT said that restrictions on where pharmacies can open could affect retail competition as well as competition for NHS prescriptions.

"The OFT will examine the system to see how the present restrictions affect competition and consumers, as well as investigating whether there are alternative ways of achieving the public interest objectives behind the present arrangements," the OFT said.

Claiming to have an open mind, it added that barriers to competition tend to reduce supply and increase prices, but that there could be benefits to set against such costs to consumers. Pharmacy was chosen for investigation because it represented a sizeable market area with a direct impact on consumer welfare and because there was statutory regulation over new entrants to the market.