The Pharmaceutical Journal
Vol 270 No 7234 p158
1 February 2003

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Office of Fair Trading pharmacy report summary

The OFT report is the best thing that could have happened

John Evans, superintendent pharmacist at Asda, explodes a few myths

Let us be very clear: the Office of Fair Trading report on the control of entry regulations and retail pharmacy services in the United Kingdom is not about supermarkets and small pharmacies. It is about the future of our profession. For too long, community pharmacy has been inward looking just trying to protect — an unsustainable position which benefits a few and restricts the majority of pharmacists.

What we should have been doing is moving with the times, challenging the status quo, ridding ourselves of Luddite practices, being innovative, improving our services and showing our true value to our communities. Rather than thinking about the patients, there are too many personal interests at stake. As a profession, we have cried wolf for so long and on so many occasions that we have now lost credibility. When we were battling to retain resale price maintenance, it was said that hundreds of pharmacies would close. Did it happen? No. And now more myths are being dreamt up to look after the few. Let me explain.

Myth 1 — Pharmacies will close resulting in a poor service to patients Relaxation of control of entry will result in more pharmacies not fewer, which will give a better not worse service to customers and patients, but do not take my word for it — read the OFT report. Pharmacies in rural areas or where they are considered essential should remain supported by the Essential Small Pharmacies Scheme and this should be better funded by increased contributions from the global sum.

Myth 2 — It will lead to the demise of the independent pharmacist On the contrary, keeping the current legislation will be the demise of independents in the next 20 years, resulting in only multiples owning pharmacies. The only independents who benefit from the current stagnation are the existing contractors who eventually sell their contracts to the highest bidder.

Let us consider this. Control of entry came in 16 years ago in 1987. The average pharmacist registers at 22 years of age. So any pharmacist who is 38 years old or younger (which is over 46 per cent of pharmacists) would only have been able to own and run their own pharmacy in three ways:

(i) if they inherited one

(ii) if they were lucky enough to have successfully applied for, and been granted one of the few new contracts

(iii) if they had been rich enough to pay hundreds of thousands of pounds for an existing contract

This will continue to be the case until the "39 years and older" pharmacists retire. And to whom will they sell their pharmacies? Only the multiples can afford them. Even if every supermarket had a pharmacy, they would still be a minor player in terms of numbers.

Myth 3 — Young pharmacists will not want to risk opening a pharmacy when there is no protection to the business It will be much easier and cheaper for young pharmacists to open a pharmacy now because there is no contract to pay for and therefore less risk if it fails. It will enable pharmacists who have an idea to try it. Yes, a minority will fail, as they did before 1987, but many will succeed, bringing with them competition and a new way of pharmacy.

Here is more proof. The Young Pharmacists Group has a prospectus (PDF 550K) called "Investing in the future of pharmacy". The YPG believes "that the recent period of change within health care provision has provided some significant opportunities for those in pharmacy who are prepared to push forward the traditional boundaries" and that "many of the reforms will not only be a benefit to patients but also to the wider profession". It wants to open a pharmacy where it can trial new models of practice, but it cannot because it has not been able to acquire an adequate level of financial support to acquire a pharmacy. Yet again, innovation is being stifled.

Myths 4 — There are not enough pharmacists already, without having any more pharmacies First, we need more pharmacies. We have one for every 5,000 people in the UK, which is worse than many of our European neighbours including Germany, France, Ireland, Italy and Spain. The number of pharmacists will be a rate-limiting factor and it is possible that salaries will rise accordingly.

However, I believe that there will be a net increase of around 130 pharmacies each year (as in the five years to 1985) so we may need an extra 260 pharmacists. We have just survived the fallow year and the Register of Pharmaceutical Chemists shows that, normally, there is a net increase of 575 new pharmacists each year, even before the new schools of pharmacy come on stream. We just have to get better at keeping them in the profession. The current national contract encourages us to count tablets and type labels most of the day, and that would not make me want to stay.

Myth 5 — The goodwill value of my pharmacy will decrease overnight The price of buying a pharmacy business will decrease, but it will reflect the true goodwill value that it is worth as opposed to the inflated value that has resulted because of the scarcity of dispensing contracts. True goodwill values will be the same as with any other business. The Royal Pharmaceutical Society database shows that only 17 per cent of pharmacists are "pharmacist proprietors". I sympathise with those who have missed out on selling their businesses at a higher price, but this price was thanks to the extraordinary and unintended windfall given to them in 1987. Customers have not gained by this, but many ex-proprietors have.

We have an example where a contractor appealed against our application for a contract citing that his pharmacy was in the best location and there was no need for another, even though the application had huge community support. As soon as he won the appeal, he wrote to us asking if we would give him space in our store for his pharmacy, as he "would always appeal against any application" that we would make.

The truth is that pharmacies will always be where they were 16 years ago, frozen in time, irrespective of how things have changed unless these regulations change. Customers tell us that they want and expect to find pharmacies in an accessible and safe environment, at a time and place that they want. Sounds familiar? You will find that "Pharmacy in the future" in England and "The right medicine" in Scotland both want the same.

Where do we go from here?

I wrote earlier about pharmacy always looking inwards, wasting our energy, time and money protecting things that we wrongly think are our given right, like price fixing of medicines, like limiting where the competition can compete. We must instigate changes and start swimming upstream. We are always on the back foot whinging and whining about being "done to". It is time that we stopped being victims and started taking the profession forward, and giving our young pharmacists a profession to be proud of, making them want to stay as pharmacists.

The first step is to get a new national contract that does not reward us for being dispensing machines and gets us away from being tied to the dispensing bench — let us leave that to technicians and robots.

It is about time that we stopped being subservient to general practitioners and started doing what we are trained to do. Let us take prescribing by the horns and really manage medicines from start to end. There is a lot to think through and it will not be easy. The big question is, do we have the bottle?

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