Warning over new wave of contract judicial reviews
Clear rules about exemptions for shopping centres such as Bluewater
are needed |
The Department of Health has been warned that opening up competition for new pharmacy contracts in England could lead to a new wave of judicial reviews as companies seek to challenge and clarify the meaning of new tests to be applied to contract applications.
The warning comes from a group set up to advise the Secretary of State
for Health
on reforming the NHS (Pharmaceutical Services) Regulations 1992 in the
light of the Office of Fair Trading’s recommendation that contract
controls should be abolished. The executive summary of the group’s
report says: “The introduction of the concepts of choice and competition
within the current regulatory framework would mean that a level of uncertainty
would persist and the possibility of judicial reviews of decisions could
not be ruled out.”
A feature of the current regulations is that pharmacy contracts can only
be granted if the proposed new pharmacy is either necessary or desirable
for the proper provision of pharmaceutical services. For a number of
years after these tests were introduced there were frequent judicial
reviews of the application of these tests. As a result of the OFT’s
report, the DoH plans to replace the tests of necessity and desirability
with tests of ability to provide relevant services and increased choice
and competition (PJ, 6 September 2003, p293).
The advisory group has also warned that problems could arise from the
four proposed exemptions to the new contract tests — large shopping
developments, 100-hour pharmacies, one-stop centre pharmacies and internet
pharmacies. If the effect of these exemptions is to override the tests
then the changes would go further than allowed by current primary legislation,
the groups suggests.
The group’s advice on the exemptions is that there should be clear
rules about how they will apply. It wants the DoH to publish a list of
shopping developments that meet the 15,000 square metre exemption. It
also wants clear rules that govern the 100-hour pharmacy exemption, so
that pharmacies that consistently fail to maintain the opening hours
without good cause will lose their contracts, and specified minimum service
levels for internet pharmacies. The group says that the proposed exemption
for pharmacies at one-stop primary care centres should only apply to
centres that are part of primary care trust strategic service development
plans and that services should be substantially above those of a normal
GP practice.
The advisory group has also considered a range of other proposals from
the government, and has accepted them all with two reservations. The
reservations concern proposals to allow all minor relocations over a
maximum of 500 metres and the abolition of the presumption that the first
of competing applications of equal merit should succeed.
In general, the advice meets with the approval of the National Pharmaceutical
Association. John D’Arcy, chief executive, was pleased that the
advice made it clear that the exceptions should be subordinate to the
primary tests. He hoped that the DoH would take on board the warning
that the exceptions would be ultra vires if their cumulative effect was
to override the primary tests of increased competition and choice. |
The
Pharmaceutical Journal