How to comment
The document, “Proposals to reform and
modernise the NHS (Pharmaceutical Services) Regulations 1992”,
is available on the DoH website.
Comments should be sent by 21 November to
Peter Dunlevy
Pharmacy
and Prescription Branch
Department of Health
Room 155, Richmond
House
79 Whitehall, London SW1A 2NS
e-mail peter.dunlevy@doh.gsi.gov.uk |
When the Government in England rejected the Office of
Fair Trading’s
recommendation on control of entry regulations earlier in the summer,
it promised instead a balanced package of measures. The OFT wanted straightforward
deregulation. The Government responded that this was not the way forward
presently and announced a package
of alternative measures (PJ, 26 July,
p113). Now a consultation document, published last week, fleshes out
the bones of these proposals.
Despite the promises, and although it does not propose complete deregulation,
it seems to be the first step towards this goal. The document states
that the Government does not believe that now is the time to move to
a fully deregulated system. However, it “intends to move cautiously
in the direction recommended by the OFT”.
Steve Dunn, AAH Pharmaceuticals group managing director, comments: “This
statement shows that we are on the road to complete deregulation but
the timetable is longer than we thought.” It is not clear how far
away this might be, but the document does conclude that a further review
will take place within three years.
But that is a debate for the future. What does the current consultation
document say? The Government claims its proposals will offer “a
more competitive environment, fulfil the existing commitment to deregulate
and extend this further by introducing more choice to areas where there
are market monopolies or heavy concentrations”. It also believes
this will encourage greater diversity of providers and services.
The Royal Pharmaceutical Society is concerned. The president, Dr Gill
Hawksworth, says: “The Society will be seeking reassurance from
the Department of Health that their proposals will not result in some
people, particularly those living in less commercially attractive settings,
having poorer access to a community pharmacy and the expertise of a pharmacist.”
John D’Arcy, chief executive of the National Pharmaceutical Association,
says: “Although we have always regarded the OFT recommendation
as being ‘a solution looking for a problem’, we share the
Government’s commitment to put the needs of patients first and
we note its intention to maintain the vital services provided by community
pharmacy.”
Debate over whether or not deregulation is a good idea has been polarised
with current independent contractors on one side and supermarkets on
the other. Neither side appears to have won, and both are raising concerns.
Mr Dunn says: “Now we are getting to the detail, the people who
thought that they had done OK probably haven’t and those who thought
they hadn’t probably have.”
Certainly some of the supermarkets are unhappy. Tesco’s group corporate
affairs director Lucy Neville-Rolfe says: “I am very disappointed
with these proposals. We will continue to press the Government for real
changes to bring the consumer benefits that the OFT report highlighted.”
Asda is still advocating opening the market up, and warns that unless
this happens, patients might be faced with pharmacies with limited opening
hours. The company points to the recent closure on Saturdays of six community
pharmacies in Aberdeen because of reduced demand since GP practices had
closed on Saturday mornings. Asda’s superintendent pharmacist John
Evans comments: “This is another illustration of why services need
to be improved and why the current system is failing patients. As the
number of pharmacies increases, patients will have better access to redeem
prescriptions and take advantage of improved services we intend to offer.
This will be in stark contrast to the last 16 years of stagnation.”
What is certain is that community pharmacists face another period of
waiting before the Government’s final decision is announced. This
document is a consultation paper: it does not provide definitive answers
to the questions that remain in many pharmacists’ minds. What the
outcome will be is unlikely to be known until December at the earliest,
when the consultation period has ended and a newly set-up advisory group
on implementing the reforms has given its advice to Government. The final
package of changes will be introduced from April 2004 at the same time
as the new community pharmacy contract.
The Government’s proposals can be divided into three areas. First,
the introduction of new criteria of competition and consumer choice to
be considered by primary care trusts in the application procedure. Second,
to remove the control of entry restrictions on pharmacies in four categories.
And finally, to suggest further modernisation and reform of the current
system, including changing restrictions on minor relocations (see Panels
below).
New test criteria for applications
Applications for new pharmacies to provide
NHS pharmaceutical services are currently considered on the basis
of a new pharmacy
being “necessary or desirable”. Current regulations
set out grounds under which a PCT can refuse applications, rather
than accept them. So the Government proposes a series of measures
to “promote competition and choice and at the same time greater
certainty for businesses making applications and PCTs in deciding
them”.
It suggests two questions to which a positive answer would be needed
in order for an application to proceed. They are: “Does the
application meet the minimum expected essential, and in due course
undertake to provide the enhanced, levels of service provision
within the proposed new contractual framework for community pharmacy
planned to be introduced from April 2004?” and “Does
the application lead to the provision of additional or higher quality
services in the relevant neighbourhood as a whole, and/or does
it increase choice and competition in the relevant neighbourhood?”.
This second question will include a consideration of whether the
local market can sustain another pharmacy, “with the assumption
being that it can, unless clear evidence is provided to the contrary”.
In addition, competition is considered on the basis of whether
an application would be likely to secure an “unduly dominant” position
in the market or a monopoly of NHS pharmaceutical service provision.
This could be a particular concern for regional multiples or contractors
who have a sole position in a neighbourhood and wish to expand,
such as into a GP practice. |
Further reforms to modernise the system
The consultation document also puts forward a number of further
changes. These are divided into proposals, which the Government
intends to introduce subject to consultation, and possible options
about which it is seeking views. Proposals include:
• To allow all minor relocations within 500
metres of an existing site to go ahead without consultation.
It notes that this might
lead to a resurgence of pharmacies “leapfrogging” each
other to achieve the best location so pharmacies might have to
trade for a minimum time period before being able to apply to relocate
again
• To enable PCTs to invite applications from contractors to stimulate
the market
• To set time limits in which PCTs have to respond to applications
• To remove the “first past the post” principle of
assessing competing applications |
Four exemptions
The four exemptions to control of entry regulations are:
• Pharmacies in large shopping developments over 15,000 square metres
gross lettable floor space
• Pharmacies that intend to open for more than 100 hours a week
• Pharmacies that form part of a new one-stop primary care centre
• Internet and mail-order pharmacies
In the cases of the first three exemptions, pharmacies would be expected
to provide a full range of services, determined by PCTs to be appropriate
for local needs. Failure to provide the full range of agreed services
could lead to losing the right to dispense NHS prescriptions.
Shopping centres What constitutes “gross lettable floor space” was
previously unclear. The consultation document makes it clearer: “Gross
lettable floor space includes non-retail sales areas but does not include
common areas such as pedestrian areas, corridors, stairs or car parks.” Furthermore,
it specifies that the developments it has in mind include purpose-built
named shopping developments in town centres, on edge-of-centre and out-of-centre
sites, major regional shopping centres, retail warehouse parks and factory
outlet centres. “Most if not all such developments can be expected
to have a number of retail outlets,” it adds. The Government says
that at present, shopping developments might have no, or only one, NHS
pharmacy contractor and that this restricts patient choice.
The Pharmaceutical Services Negotiation Committee will be finding out
which of the shopping developments already has a pharmacy, and which
has one nearby. “Until we are able to analyse the potential impact
of these locations we are uncertain how much this could destabilise the
pharmacy network,” a spokesperson says.
The exemption does not go far enough for Tesco. “We are concerned
that this one-off provision will not have any real impact on access in
most areas,” a spokeswoman comments.
A database of existing developments, and those under construction, is
currently being compiled by the British Council of Shopping Centres.
It hopes to have the list available on its website (www.bcsc.org.uk)
at the end of next week.
Long hours Pharmacies that intend to open for more than 100 hours a
week should be exempt from control of entry restrictions, the Government
proposes. This is because it believes that full account should be taken
of the needs of patients who cannot access services during normal shopping
hours.
Suggestions that such hours, perhaps 8am to 10.30pm seven days a week,
are unfeasible because of Sunday trading laws are quashed by the document.
The restrictions do not apply to small shops (internal trading area less
than 280 sq m) and to registered pharmacies provided they are not open
for the sale of anything other than medicinal products. So large shops
could provide pharmacy services, provided the pharmacy is partitioned
off and the rest of the store is closed, or the pharmacy has its own
entrance. If a pharmacy consistently failed to open for the full 100
hours then it would be removed from the pharmaceutical list, the document
notes.
A spokeswoman for Tesco points out: “We already operate pharmacy
services for 75 hours a week — some of the longest pharmacy opening
hours in the sector. One hundred hours a week is far too high a threshold.
This could frustrate the limited moves to provide greater competition.”
One-stop centres Pharmacies that are part of a consortium to establish
a new one-stop primary care centre should also be exempt, the document
states. The Government says that the uncertainty of not knowing if an
application for a pharmacy will be successful is a hurdle for consortia
developing one-stop centres. But it adds that PCTs should remain influential
over the development of these centres and the services they provide.
The minimum team that such centres should comprise is a general practitioner
and their practice staff, staff provided by NHS trusts (such as district
nurses and midwives) and other primary care practitioner services such
as pharmacy, dentistry, optometry, podiatry and physiotherapy.
One-stop centres can be developed as part of NHS Local Improvement Finance
Trust (LIFT) plans, by PCTs developing a trust-owned site, by GPs who
own premises or by third party developers (including pharmacy contractors)
who buy a site for development.
These centres represent a potential threat to community pharmacy. And
it is the area of most concern to the PSNC. “There are still a
number of uncertainties here and this is most worrying exemption. It
is not sufficiently defined within the proposals set out to prevent misuse,” a
spokesperson says.
This concern is recognised in a question posed in the consultation document. “Many
GP surgeries already provide additional ad hoc services such as physiotherapy
and may have a pharmacy attached. The exemption is not intended to create
an automatic loophole for such
sites since it would quite easily thwart the current control of entry
legislation,” it states, and asks what additional safeguards are
needed to prevent manipulation of this exemption.
Internet and mail-order The document states that wholly mail-order or
internet-based pharmacies can face obstacles in meeting the current adequacy
test to provide NHS pharmaceutical services, partly because patients
are drawn from a wide area rather than the immediate vicinity. So it
proposes that these types of pharmacies should be exempt from control
of entry.
Although the document says that this exemption should apply to “wholly” mail-order
and internet-based pharmacies, in its attempts to define these types
of pharmacy it fails to include the word “wholly”.
Impact assessment
The Government carried out an impact assessment of the costs and benefits
of various reforms. It concluded that retaining current regulations
would lead to “stagnation in the market, and costs to consumers
and businesses seeking to enter”. Full deregulation, would “put
strains on the workforce, could jeopardise access for vulnerable groups
and could result in additional costs to pharmacies and their reducing
investment in services”. A figure much publicised at the time
of the OFT report was that deregulation would result in an estimated
saving of £25–30m for consumers because of lower priced
over-the-counter medicines. The Government’s own estimate is
more conservative at £15–20m.
Another option considered in the impact assessment was allowing PCTs
to tender contracts. However, this was considered to be expensive to
set up and would increase uncertainty for small businesses.
So the Government recommended that control of entry should be retained
but with changes to encourage competition and choice, increase service
provision and simplify the regulations. It believes this will offer “the
most benefit to the public with the smallest detrimental impact”.
Whether this is true will be the subject of the debate that is bound
to follow during the consultation period. |
