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The government is looking at changing legislation to support community pharmacy contractors who may be considering consolidating pharmacies because it says there may be more pharmacies in some places than is needed.
The proposed changes were laid out as part of the ‘Community Pharmacy Contractual Framework’ for 2019/20 to 2023/24’, published on 22 July 2019, alongside a commitment to reconsider hub and spoke dispensing models in an effort to create efficiencies in the sector.
The contract, which sets out plans to freeze community pharmacy funding at £2.59bn for the next five years with no inflationary increases, said this level of funding was “still supporting more pharmacies in some places than may be necessary”.
As a result, the government said some contractors “could consider it commercially beneficial to consolidate” where they might have other branches closely located or a competitor’s pharmacy nearby.
To support this decision, the Department of Health and Social Care said it would “strengthen the protections offered to pharmacies wishing to consolidate” as set out in legislation.
Speaking at a webinar for pharmacists on the contract, hosted by the Pharmaceutical Services Negotiating Committee (PSNC) on 24 July 2019, Gordon Hockey, director of operations and support at the PSNC said there was “limited” protection to prevent a competing pharmacy from opening up in place of one that had recently closed.
He said that this protection, set out under Regulation 26A of the NHS (Pharmaceutical and Local Pharmaceutical) Regulations 2013, only stands “until the end of the life of the current pharmaceutical needs assessment (PNA)”.
“PNAs are for three years, [so] by the time you’ve got the application in and sorted, clearly that’s not that much time so the idea is to lengthen that period of protection,” he said, adding that this would “make consolidations more attractive, more desirable, to contractors”.
The contract added that as part of looking to make consolidation easier for contractors, “we will look to remove any unnecessary administrative requirements to reduce the regulatory burden on service providers”.
However, Scott Hayton, director of specialist pharmacy sales agent Hutchings, said that given the opportunity to consolidate, “if pharmacy contractors had the motivation to do so, I’m not sure that the administration would have been prohibitive factor to them executing that plan”.
The contract also says that the government will “pursue legislative change to allow all pharmacies to benefit from more efficient hub and spoke dispensing”.
NHS England said it would consider seeking changes to hub and spoke regulations as part of the ‘NHS Long Term Plan’, published in January 2019. Hub and spoke dispensing is currently only legally possible within the same pharmacy business.
Commenting on the proposed changes Deborah Crockford, chief officer of Community Pharmacy South Central, said hub and spoke dispensing “could present huge dangers” but added that there “has to be a way of releasing pharmacists from that dispensing bench to deliver the clinical services”.
“Some pharmacies will have the funding, they’ll be able to invest in the technology within their own business to free them up to make things work more quickly and efficiently,” she said. “That’s not going to be possible for everybody, especially with the current economic situation.”
Meanwhile, Hockey added that although the committee opposed hub and spoke dispensing among different pharmacies when the government first proposed changing the legislation in 2016, it had now committed to working “with the government and the NHS to make sure there are models that will benefit the whole of the sector fairly, in particular the independent sector”.
This “may mean, for example, additional NHS regulations that say what sort of hub and spoke arrangements are acceptable within the NHS framework”, he added.
