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Allen Tweedie, MA, PhD, is a member of the board
of the Independent Pharmacy Federation, director of HF Healthcare
Limited and director of Healthcare Plus Pharmacies Limited
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The Independent Pharmacy Federation sees the Department of Health’s
consultation on “Control of entry system” for NHS pharmaceutical
contractors as a welcome opportunity to comment on the reforms. The IPF
also suggests broadening the scope of the review to:
· Tighten up the current exemption categories and rigorously apply
the criteria for entry, creating a full appeals process for all entry
applications
· Chart a way forward for the independent community pharmacist
· Introduce innovation to the pharmacy contract
· Create an effective mechanism for achieving formally integrated
professional collaboration in primary care
· Create a dedicated primary care trust budget for enhanced pharmacy
services
· As an initial move, raise the target for medicines use reviews
to a minimum of 500 per pharmacy for 2007–08 (ie, an average of
less than two per day)
Introduction
In June, the DoH published its consultation document on the review
of progress on reforms in England and Wales to the “Control of entry
system” for NHS pharmaceutical contractors. This will review: · Progress in implementing the balanced package of reform measures
· The effect of these on access and choice for patients to NHS pharmaceutical
services
· Their impact for consumers and the retail pharmacy market
· The extent to which the new regulatory system is proportionate
to the aims and objectives of the new reforms
Office of Fair Trading report revisited
The 2003 Office of Fair Trading report, from which the current review
subsequently arose, purported to investigate whether the entry regulations
were “unduly impeding the way that the market works” (foreword).
The report was skewed, in that the source of some 80 per cent of pharmacy
revenue, ie, NHS dispensing services, received one paragraph of comment
under price competition and was dismissed in four sentences, while over-the-counter
medicines received 11 pages of review. The OTC market was used as a lever
to argue deregulation of an entirely different NHS market. Perhaps the
OFT knew that the NHS market could not operate according to normal market
economics. Regulated money supply and drug pricing is controlled by the
Government. Moreover, as supply and demand curves are not entirely independent
in the NHS, the market cannot operate in a utility-maximising way.
Key statistics from the 2003 report showed that: · 86 per cent of the population considered that access to a pharmacy
from a GP surgery was easy
· 89 per cent of GPs had a pharmacy located within 500 metres of
the surgery
· 90 per cent of the population considered that access to a pharmacy
from their home was easy
· 98 per cent of GPs had a pharmacy located within 1,000 metres
of the surgery
Access was further enhanced by 82 per cent of all pharmacies having
a collection and delivery service and, in the independent sector, 92
per cent provided this service. It will be interesting to see if statistics
are published showing further changes to access, because the independent
sector has diminished since 2003. At that time, independent pharmacies “out
performed” other sectors.
The introduction of the report said the pharmaceutical service was “an
extensive network of outlets that allow the great majority of people
to have their prescriptions dispensed conveniently” (p7). Remarkably,
the report concluded the opposite, that “the control of entry regulations
do not, indeed cannot, ensure good access … the current system generally
reduces access to pharmacies and pharmacy services” (p62).
The most disturbing potential of the 2003 type of report is that predetermined
prejudice may dictate outcomes. The IPF believes that because the current
consultation and any subsequent action is owned by the DoH and not the
OFT, the same prejudices and errors will not occur.
The present situation
Current regulations generally allow selective openings in accordance
with patient need and address the rapidly developing world of information
technology and distance supply. The latter is becoming an accepted
means of product or service distribution in the general consumer market.
It will be no surprise to see aspects of pharmacy service heading the
same way. Within the health care sector NHS Direct is an example of
distance service supply and is a template for service development within
the health care professions. The IPF will be giving further consideration
to this aspect of service.
Stability and good patient and pharmacist relationships are absolute
prerequisites for the ongoing development of cognitive service, which
is now part of our contract, albeit in a modest way. MURs are only one
initial step toward a clinically oriented community pharmacy service.
We are still largely in a volume rewarded supply contract. The MUR paperwork
needs revision, as does the service specification, to provide greater
benefit to both patients and doctors, as well as pharmacists themselves.
It is crucial to cognitive pharmacy service delivery that a relationship
of trust and inter-dependence exists among the tripartite synergy of
care, (ie,
the patient, pharmacist and doctor) and that there are visible measurable benefits
for each. It is doubtful whether the current MUR intervention delivers the
latter objective but this can be remedied. In the view of the IPF, current
cognitive service is inadequately incentivised and as a start, the target MURs
per pharmacy, for 2006–07 should be raised to 400 and 500 for 2007–08.
It is rumoured that there is pressure from some of the multiples to retain
the MUR service at its present level. This may be because the service is not
as financially rewarding to them as the bulk purchasing and supply of drugs.
The IPF believe strongly that enhancement of the cognitive service is essential
for the independent pharmacy since it creates a level competitive playing field
of professional practice which cannot be distorted by the bulk purchasing power
of the multiples. However, it will certainly require a commensurate increase
in remuneration. Research in November 2002 showed that over 80 per cent of
independent pharmacists wished to undertake medicines management “if
remuneration was acceptable”.
With proper entry controls and a committed forward pattern of service development,
independent pharmacist confidence and a motivation to sustain investment in
patient care and facilities will be reinforced.
This will progressively bring the profession into a more clinically beneficial
relationship with the patient and consequently higher economic and professional
return on activity. “Profession” development is now a crucial factor
in pharmacy’s future. It is currently under review and must take precedence
over simplistic, free-market competition, as espoused by some of the
multiples. Current effects of entry controls
Since 2003, the independent sector has diminished, primarily because
of acquisitions by the publicly quoted multiples, which have not been
able to open new branches at will. In effect, they have had to buy
market share by acquiring independents and then automatically improve
profitability of their acquisitions through their great purchasing
power, systems control and merchandising expertise. The independent
pharmacies (those in chains of less than six pharmacies) have fallen
in number by 46 per cent over the 10 years leading up to 2004–05.
The indications are that the independents will continue to fall in
number to a presently indeterminate level, unless the available entry
strategies
are fully engaged by the sub-sector and the cognitive service specification
developed. What must not happen is that the powerful multiple lobby succeeds
in further flexing the entry controls to their own advantage. Innovation
in the sector, however, is greater than at any time during unlimited
entry. The profession has moved into structured cognitive service, through
medicines management. This transformational initiative, was the result
of the independents’ creativity at national level, not the multiples.
It is crucial that the independent sub-sector remains strong, with its
industrious activities, initiatives and entrepreneurship throughout England
and Wales.
Despite regulated entry, pharmacy openings and closures have continued
and distance supply pharmacies have increased, as have “100-hour” pharmacies.
Figures presently available indicate that the “100-hour” exemption
is being exploited even though out of hours services in some of the affected
districts are wholly adequate.
In England, official figures show that 168 applications for “100-hour” pharmacies
were granted in 2005–06 with 83 decisions still pending. The number granted
for internet and mail order pharmacies was 21. The total (net) overall increase
for England for the year was 130. The independents, in such areas, are threatened
with diminished patient visits and, in some cases, closure. Consequently, those
mostly at risk of diminished choice and convenience are the elderly, socially
disadvantaged and mothers with young families without their own transport.
The 100-hour exemption should be tightened up. No period of grace should be
allowed after initial opening for operating at the full 100-hour weekly service
level, as is happening at present. Secondly, those pharmacies applying should
not be allowed to open in districts already well served with choice and extended
hours provision. Thirdly, they should also be subject to the test of “necessity
or desirability”.
For the 10 years up until 2004–05, pharmacy numbers in England and Wales
varied irregularly, between 10,509 in 1995–96 and 10,447 in 2004–05.
During this period, 2,941 minor relocations were granted. If the assumption
is made that in the majority of cases these were beneficial to the applicants,
then increases in patient traffic would be one result, due to more convenient
access and benefit for patients themselves.
For the same 10-year period, prescription numbers have increased from 467.4
million in 1995–96 to 674.9 million in 2004–05. It can therefore
be seen that productive efficiency in the sector has increased. Discount for
the DoH is maximised and the cost
of increased production is contained by
the limited entry contract, the annually
pre-determined global sum and drug cost
re-imbursement arrangements. Returns to scale and internal or external economies
of scale are also promoted.
Since it is likely that the community pharmacy sector is working at full employment
(there will be fluctuations here) then the production possibility frontier
is maximised so far as goods and services are concerned. “X” efficiency
is probably also maximised, because of the cost controls in the mechanisms
of new contract remuneration. With entry controls, the sector is performing
well. Moving forward through innovation
Patient access and choice needs to be understood in the context of
professional service, not simplistically as premises supply, or the price
of OTC
medicines. Interestingly, the 2003 Office of Fair Trading report acknowledged
that “there is, in any case, more to access than location. Opening
hours, convenience and other services, such as home delivery, are also
important”(p5).
The number of items dispensed annually in the community (by pharmacists,
appliance contractors and dispensing GPs) per head of population has
risen over the past
five years from 11.9 to 14.3 items. This, the overall increase in script numbers
and continued control of entry also offers the inviting prospect of achieving
more than one pharmacist per pharmacy. In turn, increased access to pharmacist
professionals is assured, as well as the potential range of services offered.
Comprehensive medicines management can then be delivered offering greater benefit
for patients, doctors and pharmacists.
Again, the Independent Pharmacy Federation sees cognitive service development
as the way forward that creates a level playing field of excellence across
independents and multiples alike. Strong competition already exists in the
market but would be enhanced by this route.
To facilitate innovative development of this sort, we recommend a ring-fenced
budget at primary care trust level for the development of fully integrated
medicines management and enhanced services. This will avoid the constant wrangle
over the ownership of the primary care (GP) budget for enhanced services and
ensure progress.
Collaboration between doctors and pharmacists exists under the new contracts
for both professions. Prescribing advice and pursuit of National Institute
for Health and Clinical Excellence guidelines is a collaborative process to
deliver best patient outcomes at minimised costs. The NHS looks for innovation
and the IPF strongly advocates strengthening the doctor and pharmacist partnership
further by the introduction of a new directorate of integrated care, at strategic
health authority level. Such a high level focus, operated through the primary
care trusts, would be an effective driver of practice change at the GP and
pharmacist interface.
This would provide high visibility and importance to the delivery of structured
partnership care for the patient. Formalised joint programmes of GP and pharmacist
work directed by the primary care trusts would ensure implementation. “Partnership” and “collaboration” are
key themes of successive Government White Papers over the past decade. Stability
of both the GP and pharmacy network is an essential base on which to build
such a potent partnership of care, that would also include nurses and other
professionals, as required.
Currently, we have an internal market within the NHS where different professionals
can deliver services previously the domain of one supplier. This, in turn,
means that the “consumer” can experience some choice across the
professional boundaries and choice of service opportunities within community
pharmacy as outlined above. Consumer or patient sovereignty can thus be seen
to operate more closely to true market economics. Summary
Although it is disappointing to note that the current consultation
has arisen out of a flawed OFT report, the IPF sees this as a welcome
and
important opportunity to press for changes. These must benefit patients,
have measurable outcomes and promote structured partnerships between
primary health care professionals. The “independent” sector
is innovative, industrious and entrepreneurial in culture. It is a
driver of change in the whole profession and must be sustained.
In this way, the whole profession will fulfil its rightful place in
primary health care. It will provide a highly efficient competitive
service,
pro-actively delivering clinical and economic benefits to the population,
the DoH, GPs and pharmacists in an innovative way.
The future of community pharmacy is also under review and now is the
opportune time to reappraise the future of the independent pharmacy.
Independent pharmacies should make their views known to the DoH. |
The
Pharmaceutical Journal