On 17 July 2003 the Government published its response to the report for England, in which it announced its intention to move cautiously in the direction recommended by the OFT.

In summary, the package of measures proposed first the introduction of new criteria of “competition and choice” to the current regulatory test. Second they would exempt completely four types of pharmacy applications from that test. These four exemptions would apply to applications in respect of large shopping developments over 15,000 square metres (though town centre developments will not now be included); to pharmacies intending to open more than 100 hours per week; to pharmacies which are part of consortia developing new one-stop primary care centres; and to pharmacies which would be wholly internet or mail-order based. Finally, the current regulatory system would be further reformed and modernised.   

The Department of Health issued a consultation document on 29 August 2003 “Proposals to reform and modernise the NHS (Pharmaceutical Services) Regulations 1992” which explained these proposals in more detail and sought views on how best to implement the package of measures. 270 responses were received. A summary of those responses is available on the Department of Health’s website at www.dh.gov.uk/mpi

The Department also set up an expert Advisory Group (The Advisory Group on the Reform of the NHS (Pharmaceutical Services) Regulations 1992) under the chairmanship of Mrs Anne Galbraith, Chair of the Prescription Pricing Authority. Their role was to advise how best to implement the proposals, taking account of the OFT report and responses subsequently received, and to offer further advice. The Group’s report was received in January this year. The Executive Summary of their report was published in March. This is available on the Department’s website at  www.advisorybodies.doh.gov.uk/ pharmacyregulationconsultation. Their full report will be published later this year when the necessary regulatory changes are brought forward. 

The Government has taken careful account of the Advisory Group’s report and recommendations and the responses to the consultation in drawing up its plans for implementation. Stakeholders from a wide range of key interests were represented on the Group. These included patients and consumers, the NHS, pharmacists and health professions as well as those with experience of competition and regulatory reform. The Group provided constructive and valuable advice. The Government has accepted the great majority of their recommendations in relation to the proposals set out in the consultation document and will now proceed to implement them, but with some amendments.

Introducing the new criteria of competition and choice to the current regulatory test will be achieved through secondary rather than primary legislation. Criteria will also be developed for Primary Care Trusts to reject administratively any application, which does not undertake to provide the required “essential” pharmaceutical services under the proposed new contractual framework for community pharmacy. Similar arrangements will be made for appliance contractors. The intention is for these criteria to be rolled out to all PCTs later this year subject to the progress made with that framework.

The Department will proceed with the plans to exempt four types of pharmacy application from the “control of entry” test.

However, pharmacy applications for town centre shopping developments over 15,000 square metres will not be exempt. The exemption would still apply to out-of-centre and out-of-town developments as was originally proposed. Such exempted developments will be included in a published list and a provisional list is now available on the DH website at www.dh.gov.uk/mpi. The Department is considering further how this list is to be updated and more information will be available when we bring forward the draft changes to the regulations. Pharmacies, that have hitherto found difficulty in gaining a NHS pharmacy contract in shopping developments in town centres, will nonetheless be able to apply to their local Primary Care Trust for admission to the pharmaceutical list under the reformed regulatory test, referred to above, when that is introduced or to make use of the exemption to open more than 100 hours per week.

  For pharmacies which intend to open for more than 100 hours per week, a requirement will be included for PCTs to remove from their pharmaceutical list any pharmacy that consistently fails to meet the terms of the exemption unless there is “good cause” – for example, a fire causes temporary closure.

  Applications from members of a consortium establishing a new one-stop primary care centre will also be exempted, provided the centre provides a regular, comprehensive range of services and serves a substantial population. The exemption will only apply to centres which are part of the local PCT’s Strategic Service Development Plan or equivalent written service development strategy. The Regulations will define a “consortium” and specify governance arrangements. Guidance for PCTs will cover situations where a service provider withdraws from a centre so that this does not require the closure of the exempted pharmacy.

 Applications for wholly mail order or internet-based pharmacy services will similarly be exempted and a number of measures will be applied to ensure such pharmacies provide a fully professional service within the provisions of the new contractual framework.

 Regulatory safeguards will also be introduced to protect against manipulation or abuse of the new freedoms. For example, the four exemptions will require applicants to provide a full and prescribed range of services. These would be for local determination by the PCT in relation to the first three exemptions, or nationally determined by the Department in discussion with the NHS in relation to the exemption for wholly internet or mail order based pharmacies. Apart from dispensing prescriptions, such services might include managing a patient’s repeat medication, helping patients get the best from the medicines they are taking and promoting healthier lifestyles. For example pharmacies are well placed to provide support for people at risk of coronary heart disease, giving advice on stopping smoking, or how to improve nutrition or physical activity.

  So key elements of the proposals, including the four exemptions, are either implicitly or explicitly linked to the delivery of pharmaceutical services under the new contractual framework. The plan is to implement these reforms in tandem with that framework. It is hoped that discussions on the new contractual framework will be finalised in the near future. The aim is to prepare and consult on these regulatory changes and to implement the reformed regime as soon as is practicable thereafter.

 Guidance for the NHS on how to implement the Regulations was last drawn up in 1992. An overhaul is long overdue. So this information will be amended to bring it fully up to date to assist PCTs in implementation. This would include developing supplementary questions to inform PCT assessments of pharmacy applications. Enhanced data collection from PCTs is also proposed, subject to approval by the body overseeing NHS data requirements, to inform assessment of progress on our package of reforms and evaluate the impact of these exemptions in 2006.

  Additional steps will also be taken as proposed to further modernise and reform the current system through a combination of regulatory and administrative changes.

  Primary Care Trusts will be able to invite applications from contractors. The application forms will be revised to reflect the criteria that PCTs use in assessing applications. PCTs will be required to reach a decision on an application within 4 months of the due date for receipt, unless there is good cause. They will also be required to consult widely with patient, consumer and local community groups that have a direct interest in local pharmaceutical provision, and set an administrative minimum consultation period of 45 days.

  An automatic exemption will be introduced for all minor relocations under 500 metres, but the discretion for PCTs to override this where there is good cause will be retained. An example of this would be where geographical obstacles or transport difficulties would affect continued access to pharmaceutical services. Similarly there will be a minimum 12-month trading period requirement before a further application for a minor relocation can be accepted, unless, again, the applicant shows there is good cause.

  The current restriction which prevents cross-PCT boundary minor relocations will be removed, but the means to remove the contractor from the list of the PCT he is leaving and the receiving PCT agrees to the relocation will be ensured.

  The concept of preliminary consent for a pharmacy application will be retained, but the maximum period for grant of such consent will be limited to 6 months.

  Similarly, a maximum period of grant of full consent of 9 months will be set. Also PCTs will be enabled to have the discretion to require an applicant to commence pharmaceutical services within a given period not exceeding 3 months unless there is good cause.

  In addition, two measures proposed to us by the Advisory Group will be introduced. PCTs will be allowed to set a fixed date every month for the receipt of applications. And PCTs will be required to deal with applications that do not require local consultation within a maximum of 30 days.

  However, the long-stop discretion which enables PCTs to decide competing applications of equal merit on the basis of “the first past the post” will be retained in guidance.

  The appeals system will also be reformed. Appeals for change of ownership will be allowed to be combined with appeals concerning minor relocations.

  Certain of the proposals would require primary legislation. When parliamentary time permits, introducing new legislation will be considered to enable reasonable charges, but not full cost recovery, for pharmacy applications to be introduced. Consideration will also be given to enabling PCTs to take into account, when assessing applications, the improvements they would bring to the provision of, or access to, over the counter medicines and other healthcare products. There is no intention, however, to introduce legislation to enable charges to be levied for appeals. Any such legislation would be consulted on further.

  There are also plans to introduce, subject to further discussions, measures developed by the Pharmaceutical Services Negotiating Committee and the General Practitioner’s Committee of the British Medical Association and the Dispensing Doctors’ Association to reform the rules governing NHS rural dispensing. These bodies reviewed their proposals in the light of the Government response to the OFT report, presented their findings to the Advisory Group referred to earlier which in turn recommended they should proceed. The Department has met these organisations recently to hold further discussions on how best the reforms should be introduced to the current legislation. The aim is to implement these in tandem with the other reforms detailed above.

These measures represent an important step forward for community pharmacy services and the Government's ambition to deliver a balanced package of reform measures. These will raise standards for patients, encourage innovation and excellence in service provision whilst at the same time supporting community pharmacies, many of which are small businesses, and who have a vital role, particularly in poorer and rural areas.