OTC prices may sway contract decisions

PCTs will be forced to give priority to contract applications by pharmacies offering cheaper OTC medicines if legislation is passed amending the control of entry regulations.

Department of Health community pharmacy policy manager Peter Dunlevy has said that, as a concession to the Office of Fair Trading, the DoH will be pushing to put through legislation requiring PCTs to consider the availability of cheaper OTC medicines as a way of deciding between two equal applications for a new pharmacy contract.

This will be done as soon as Parliamentary time allows, he said at a PCT training event on the reforms to the control of entry regulations.

His comments come in light of the 2003 OFT report, which highlighted that opening up the pharmacy market could lead to improved access to cheaper OTC medicines. Mr Dunlevy said: “We will consider 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.”

LPC representatives who were present at last Monday’s National Primary and Care Trust Development Programme conference have slammed the way the DoH unveiled the news as unbelievable.

Kensington, Chelsea & Westminster LPC secretary Rekha Shah said: “This is not the right way to say something like this. This should have been part and parcel of the original documents, so we could have discussed this properly.”

30 August, 2004
The Department of Health has expanded on how the new criteria of 'competition and choice' might enable pharmacies to obtain an NHS contract.

Under the new control of entry regulations primary care trusts would still have to decide whether a proposed pharmacy was 'necessary or desirable'. If the pharmacy were exempt from these requirements because it opened for 100 hours a week or was in a primary care centre or 15,000sq metres out-of-town retail development, PCTs would be able to stipulate what services the pharmacy should provide.

The criteria of competition and choice, being introduced through secondary legislation, could sway the PCT's decision in favour of a pharmacy wishing to open in an inner city retail development (currently not exempt from the necessary or desirable criteria). But a DoH spokesman said the competition and choice criteria would be unlikely to over-rule the need to be necessary or desirable.

Details of how changes to the control of entry regulations will apply to community pharmacies in England have been published.

Pharmacies may obtain an NHS contract without fulfilling the regulations’ “necessary or desirable” tests if they fall into one of the following categories:

• open for 100 hours a week
• located in a primary care centre
• located in a 15,000sq metre retail development
• internet or mail order based.

However, with the stated aim of protecting the network of independent community pharmacies, health minister Rosie Winterton has stipulated that certain conditions must be met to qualify for exemption. And key to the exemption categories is that applicants must provide a full and prescribed range of services, determined locally by the PCT for the first three exemptions, and the DoH and NHS for internet services.

The minister has stressed that such opportunities are open to independent pharmacies, not just the big multiples. “Pharmacists will also have a right to open up shops in shopping malls in out-of-town retail centres. This will allow enterprising pharmacists to take competition to the supermarkets,” she said.

In addition to the four exemption categories, the Government has announced that an automatic exemption will be introduced for all minor relocations under 500 metres, but the discretion for PCTs to over-ride this where there is good cause will be retained. It will also be possible for minor relocations across PCT boundaries.
New criteria of “competition and choice” will be introduced through secondary legislation.

NHS dispensing in rural areas is also to be addressed in tandem with these reforms and that of the new pharmacy contract.

Views on the changes

Commenting on the proposals, Ms Winterton said: “This improves services for patients and those who use pharmacies, with safeguards to ensure that we support community pharmacists, many of whom are small businesses. This should not lead to widespread closures.”

PSNC chief executive Sue Sharpe responded by saying that PSNC has been working to ensure that the four exemptions were subject to controls that would minimise the damage they would do to the present network of community pharmacies.

“We are pleased to see that the Department has agreed that town centre shopping developments of 15,000sq m should not be exempt from the control of entry regulations. The provisional list of 386 premises has therefore reduced to 124, and of these, several are distinct developments within larger shopping areas.”

She described the minister’s decision to restrict the size exemption as a “very substantial improvement” which “will provide reassurance for large numbers of pharmacies”.

Mrs Sharpe added: “On balance, this is far better than the position we faced 18 months ago – complete deregulation. It is also a substantial improvement on last summer.”

Numark, however, is worried about the use of ‘competition and choice’ in deciding new contract applications. Andrew Sollitt, Numark’s marketing director, said: “Our concern is surrounding ‘competition and choice’: what are the criteria and what are the tests going to be? At the extreme you could deliver deregulation through competition and choice; there’s no definition from the DoH as to what it means.” He was concerned that the changes will be made under secondary legislation, which means they may not be debated by Parliament, nor would pharmacy bodies be able to have any input into what the tests would look like.

Brian Cotter MP, Liberal Democrat spokesman for small business, said: “If a pharmacy is granted the right to set up business purely on the basis that it will be open for 100 hours a week, it should be a prerequisite that a pharmacist will be on site for the duration of that time.
“If the DoH or primary care trusts cannot monitor that criterion, then they are simply advocating 100-hour-a-week shampoo shops. Today’s report completely ignores the fact that small, independent pharmacies may be squeezed out of a big boys’ market. This, in turn, will restrict consumer choice.

“Local pharmacies provide essential services for the elderly and vulnerable groups in our communities and it is imperative that the Government removes the death warrant it has effectively placed on these vital small businesses,” added Mr Cotter.

Dispensing doctors will know from their own figures whether there is likely to be an attempted takeover by a pharmacist and, if in any doubt, should gear up and consider opening their own pharmacy.    Full guidance about this is in the forthcoming book, "Your own Pharmacy" by David Roberts.  (Radcliffe Publishing, October 2004)

Non-dispensing doctors should also give some careful consideration to opening their own pharmacy premises along the same lines as described in "Your own Pharmacy"

Note that Mrs Winterton simply says "open in a primary care centre".  As yet there are no details as to whether this should be, as earlier suggested, in a "one-stop health care centre".    countrydoctor is awaiting further details.

The safeguards for pharmacy

• Those wanting to qualify for the ‘100 hours’ exemption will have to prove to their PCT that they are prepared to provide extra services, such as smoking cessation.
• For consortia intending to open in primary care centres, the rules will stipulate that the pharmacy will have to offer a full range of pharmaceutical services and that the centre will generally have to service a population of around 20,000.
• Internet or mail order pharmacy businesses must provide a “fully professional service”, and meet the standards required of other pharmacies as set out by the RPSGB.
• To qualify for exemption on the 15,000sq m development grounds, the site must not be in the town centre – the terms “out of centre” and “out of town” are being used – and the area requirement must be fulfilled by retail elements only and not, for example, car parking spaces.

Chiefs in the dark

Pharmacy chiefs first realised there was going to be an announcement this week after reading reports in last weekend’s Sunday papers. PSNC was contacted first, on Saturday, by
a journalist from the Sunday Times, and immediately posted a website statement. On it, PSNC chief executive Sue Sharpe said: “PSNC would need to see the detail of the proposals for changes to control of entry within large retail developments in order to be able to accurately evaluate the extent to which they would damage the existing good network of locally accessible pharmacies. Too many pharmacies in shopping centres will inevitably lead to the closure
of neighbourhood pharmacies.”