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All parties in the negotiations over the new pharmacy contract are playing their cards close to their chests
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Progress is being made towards the introduction of a new community pharmacy
contract in England and Wales, planned for April 2004. However, all that
has been agreed so far is the framework for a three-tier contract based
around essential services (dispensing, repeat dispensing, referring patients
to other health professionals, clinical governance, public health roles,
medicines waste disposal and sharps disposal), enhanced services (such
as medicine use reviews) and additional services (examples include substance
misuse services, anticoagulant services, emergency hormonal contraception
service, palliative care, diabetes screening and full clinical medication
review) (PJ, 19 July, p77).
Pharmacists could be forgiven for thinking that the next step is for
the Pharmaceutical Services Negotiating Committee and the Department
of Health, negotiating in concert with the NHS Confederation on behalf
of primary care trusts, to agree funding proposals. Unfortunately, they
would be wrong. Many smaller steps remain to be completed before that
can happen.
One PSNC member said last week that negotiations are still at the drawing
board stage. The PSNC does not know what the DoH will propose and vice
versa.
So what has been achieved so far?
The PSNC has set up a number of working groups to consider separate aspects
of the whole. For example, one group is developing a cost-of-service
model, another is trying to identify a basis for securing fair funding,
while a third is looking at options for distributing the agreed sums.
Still more groups are examining other angles, as well.
Foremost among the steps that must be achieved next is agreement on a
common cost basis for providing pharmacy services.
The PSNC and the DoH conducted a joint cost inquiry over the summer in
an attempt to find out what the actual current cost of providing the
National Health Service contract is. This is expected to take account
of the hidden retained profit on drugs purchasing, which is mainly derived
from getting a better deal on generics than is allowed for in the Drug
Tariff. According to Sue Sharpe, chief executive of the PSNC, the PSNC
and the DoH are waiting to “finalise the cost inquiry inputs”.
This is not quite how everyone sees it. “We have disagreed with
each other’s evidence,” one PSNC member says. “We are
both working from the same figures, but are looking at them differently.
The DoH is disagreeing with quite a few of the figures.” Another
member of the committee says that there is disagreement over how to apportion
the costs of running a pharmacy to the services provided from it, saying: “A
typical pharmacy will make 80 per cent of its turnover from NHS dispensing,
but the dispensary itself may only take up 20 per cent of the space in
the store.” There is also an issue as to whether sales of non-prescription
medicines for self-care, about 10 per cent of turnover, should be included
in the figures.
Specifying the three tiers
Another element of the new contract on which Mrs Sharpe admits more progress
has been made is the development of specifications for the separate
elements of the three tiers. She said: “Clearly there is an enormous
amount of work to do as we finalise service specifications for the
three tiers. The service specification debate with the NHS Confederation
and DoH is well advanced. Funding is less well advanced. They will
want to start from the current position.”
Each sides is playing its cards close to its chest and has little idea
what proposals the others are developing. However, one PSNC member admitted
that the PSNC is working towards a model based on an efficient independent
pharmacy.
In parallel with the new contract discussions are the Government’s
proposals to reform the way in which pharmacists are reimbursed for purchasing
generic medicines. Initially, the Government proposed centralised reference
pricing or competitive tendering arrangements for generics, which could
have taken money away from pharmacies. Its more recent proposals appear
to back the suggestions by the PSNC that it is competitive purchasing
by community pharmacists that drives down the prices of generics and
that the new contract should recognise this through a form of profit-sharing.
The framework for the new contract, approved by a majority of contractors
in England and Wales last week, puts “profit and purchasing
plus remuneration” on the other side of the funding equation from “cost
of service plus fair funding”.
However, recent proposals by the DoH to set maximum prices for four recently
off-patent generics have been criticised for undermining the wider generics
review and taking money away from pharmacy.
The Government is keen for PCTs to take greater responsibility for commissioning
services in their areas. But one member of the PSNC is warning that devolution
could be a problem for pharmacy contractors. “Every time funds
have been devolved in the past, such as for out-of-hours rotas or for
oxygen, they have eventually disappeared.” The members also fears
that independent pharmacy contractors could lose out to multiples in
any local negotiations. “Multiples will have teams going round
to each PCT — if they empty the pots what will happen to the other
pharmacy contractors?”
Even assuming that the DoH is willing to pump more money into the new
system, it is inevitable that the basic dispensing fee will be cut from
its current level of 94.6p per item. But it is not yet known how low
it might go. The PSNC is working towards developing a bottom line figure
below which it believes public safety will be put at risk because the
fee will not allow for safe working systems, including the cost of necessary
staff training.
So far as the second ballot on funding proposals is concerned, PSNC members
are not willing to say when they think this might take place. But the
DoH is pressing for it to take place next January.
One PSNC member said: “We haven’t said yes, but if things
go swimmingly it’s possible that the vote could be in late January
or early February.” But the member warned: “The DoH and NHS
Confederation ideas of fair remuneration might not be the same as ours.” |
