The Pharmaceutical Journal
Vol 270 No 7243 p461
5 April 2003

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Chancellor favours deregulation

Whitehall sources have confirmed that the Chancellor of the Exchequer, Gordon Brown, is in favour of the Office of Fair Trading's recommendation to remove restrictions on National Health Service pharmacy services (our Lobby correspondent writes).

But they also suggest that he is not prepared to risk a Cabinet split on the issue during the war in Iraq and as he prepares to unveil a tax-raising budget. One insider said: "He is used to getting his own way but he will not force an issue which could damage his own personal support in the Government."

In private briefings, Mr Brown has argued that allowing such supermarket giants as Tesco, Sainsbury's, Asda and Safeway unfettered rights to the prescription drugs market would save the taxpayer a hefty proportion of the £840m which the Treasury currently pays to pharmacies.

But Health Secretary Alan Milburn, who was sceptical from the start, has turned against the OFT report because, he believes, the future of small pharmacies may be threatened. He has also been impressed by the arguments from community pressure groups and backbench members of Parliament that a concentration of pharmacy services in supermarkets on the fringes of towns could disadvantage the elderly and less mobile.

The Secretary of State for Trade and Industry (Patricia Hewitt) is also taking seriously representations from Boots and Lloydspharmacy that they would be hit hard, with serious consequences for jobs.

On March 20 she told the Commons: "There are limits to markets, particularly in the delivery of health services." She added: "It is essential that pharmacists should be able to fulfil not only their present valued and trusted role, but also the wider role envisaged for them in the NHS plan. Simply deregulating the market will not do that."

Confusion remains over who will make a final decision.

In Wales and Scotland, where health is a devolved matter, the administrations have clearly rejected deregulation (PJ, 29 March, p423). But competition is not devolved, so a Westminster decision that this is competition matter could lead to the Welsh Assembly and Scottish Parliament being overridden.

A Department of Trade and Industry spokeswoman was unable to say whose decision it would ultimately be. "The DTI is co-ordinating a response across Government," she said. "The Department of Health has an interest in this area." A Health Department spokesman said that there would be a "Government response" to the OFT report.

Whatever decision is made, partial deregulation in England will come as no surprise. Both trade and health ministers have said that a balanced package of measures is called for.

Some deregulation is also clearly set out in the NHS pharmacy plan (PJ, 16 September, 2000, p384).