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OFT to study control of entry
(3 October 2001)
The Office of Fair Trading is to examine the control of entry regulations,
which govern how National Health Service dispensing contracts are granted,
as part of a review of the whole market for pharmacy services, the director
general for fair trading, John Vickers, announced on 3 October.
A spokesman for the OFT told The Journal that the review
will cover the whole pharmacy market. This could include the registration
of pharmacy premises with the Royal Pharmaceutical Society.
"The aim of the inquiry is to look at what the current regulations are
intended to achieve and whether they are achieving that. We will look
at the effects on consumers and the effects on the sale of over-the-counter
medicines. We will also look at the current state of profitability of
community pharmacies and the entry and exit to the market."
The inquiry will involve a team of six to 12 investigators from the OFT's
markets and policy initiatives division holding discussions with interested
parties. Outside expertise may also be brought in. The inquiry is expected
to last between six and 12 months. However, if the OFT feels that enforcement
action or a referral to the Competition Commission is necessary then it
could issue a direction to that effect within two to three months.
The OFT says: "It is important for customers that a convenient [pharmacy]
service is available, because many want to purchase OTC medicines with
the benefit of a pharmacist's advice, or need frequent repeat prescriptions.
Restrictions on where chemists can open potentially have an effect on
competition and not only on dispensing prescriptions. The system will
be reviewed to see how the present restrictions affect competition and
consumers and whether there are alternative ways of achieving the public
interest objectives behind the present arrangement."
The OFT has five options for its inquiry. It can recommend enforcement
action by the OFT, make a reference to the Competition Commission, make
recommendations to the Government for changes to laws or regulations,
suggest consumer awareness campaigns, or issue a clean bill of health.
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