National Pharmacy Association

The National Pharmacy Association (NPA) has been given the opportunity to comment on the above consultation. The NPA represents the vast majority of community pharmacy owners in the UK. We have in voluntary membership virtually all pharmacy owners except for Boots the Chemists. The 11,000 pharmacies we represent have always played a key role in promoting, maintaining and improving the health of the communities they serve.

Proposal - The Department proposes to amend the legislation to enable reasonable charges to be introduced for applications concerning a chemist’s inclusion on a NHS Primary Care Trust list.

Question - Do you agree the proposal and scope of the legislative powers?

NPA Response

The NPA in its most recent OFT consultation response¹ highlighted that there was no clear stated principle for the rationale behind charging for applications. It is now clear that the rationale for charging for applications is one of minimising the financial burden to the NHS and deterring speculative bids.

The NPA recognises that pharmaceutical applications for inclusion on to the NHS Primary Care Trust list can fall into numerous categories such as –

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2. • Speculative bids which can be classed as ‘fishing’ expeditions. These are bids which may not be thought out adequately in terms of pharmaceutical service provision.
   
   
   
   
   
   
   



3. • Blocking applications which have the effect of simply delaying and/or blocking other applicants.
   
   
   
   
   
   
   



4. • Genuine applications where the pharmaceutical needs of the local area are fully taken into account.
   
   
   
   

The NPA does not believe that contractors should be required to pay for ‘genuine applications’ which are granted on the basis of their improving the health needs of the local community however we do support charging where the application can be seen as speculative or blocking. The NPA appreciates that this differentiation in applications is difficult to monitor therefore the NPA proposes that all applications for a new contract should have a charge levied. But where the application is subsequently successful then the charge should be refundable. However we would stress that our support for charging applies only to full applications. We object strongly to any charge in respect of other applications such as minor relocation, change of ownership and changes in services provided.

Further, if a charge is to be levied it should apply to any applicants seeking inclusion. This charging should therefore apply to dispensing doctors and appliance contractors.

¹ Response by the NPA Proposal to reform and modernise the NHS (Pharmaceutical Services) regulations 1992 November 2003

The NPA notes the comment on page 6 paragraph 18 as regards the fee not being refundable but the NPA feels this is totally inequitable and will work against community pharmacy innovation. The key driver to introducing charging as stated by the consultation proposal is to "….deter such speculative bids and defray NHS costs" - it is not being introduced to prevent genuine applications. In allowing the application fee to be refundable if the applicant is successful one is encouraging genuine applications to meet genuine gaps in pharmaceutical provision.

The community pharmacy continues to be an important player in the primary healthcare sector but it also contributes to the economic stability of the local areas in which pharmacies serve. Whilst the NPA accepts the principle of charging for full applications to prevent speculative and blocking applications this should in no way be seen as a precedent in treating community pharmacy as any different in the primary healthcare setting.

Community pharmacy is changing its role in line with a new contract and will increasingly become a front-line primary care clinician. However, the charging for applications suggests that pharmacy is being set apart from the other primary care clinicians in being asked to contribute financially to the service arrangements. We recognise that charging applications is relatively a modest contribution by pharmacy. However it does seem to cut across the principles enshrined in the new pharmacy contract where pharmacy remuneration is based on the costs of service plus fair return.

The NPA therefore feels strongly that if and when charging for applications is introduced that this should not mean that pharmacy is treated as a business but rather a NHS primary healthcare provider.

Question - Is it reasonable that business should incur new costs?

NPA Response

The NPA believes that all reasonable steps should be taken to reduce unnecessary administration and cost burdens on PCTs. It is for this reason we support charging for full applications as a contribution to costs. However our support is in the context of discouraging speculative or blocking applications. Applications which are a genuine attempt to plug a gap and fill unmet need should, when successful, have the associated charges refunded.

The NPA would like to see a cap for the application fee set at the £500 level for full applications. This would allow pharmacists that are looking at setting up a new pharmacy business to be able to budget with a certain degree of accuracy.

Whilst the NPA accepts that in the scheme of opening a new pharmacy business a £500 fee is minimal, the NPA would still like to see assurances that this level is

capped. Further if it is deemed necessary to increase the fee in the future the NPA would like additional consultations to occur to seek guidance on an appropriate level.

Question - If not, is it reasonable the NHS should continue to meet the full costs of dealing with applications?

NPA Response

The NPA agrees with charging as a means to prevent blocking and speculative bids. With this in mind the NPA does feel it is not reasonable for the NHS to meet the full costs of applications. We welcome the expert advisory group’s recommendation that charges should not be set at a level which recovered costs in full. (Page 7 paragraph 21)

Question - Larger companies may better absorb such costs than new applicants or smaller businesses. If introduced, should the legislation permit differential fees to be set based on, for example, company turnover (actual or expected)?

NPA Response

One of the key drivers in introducing charges is to recover some of the costs involved in deciding pharmaceutical applications. In order to introduce differential fees, additional measures and procedures will need to be put in place to decide the level of payment for each applicant. With this in mind introducing differential charges may in effect increase costs rather than decrease costs to the NHS. In any event we do not believe there is any correlation between the costs associated with determining an application and the size or financial strength of an applicant.

The NPA therefore feels that introducing differential fees may not be in the best interests of all parties involved. The introduction of a capped fee at, for example, £500 for a full application for all applicants is the preferred method for the NPA.

Question - Whether in agreement or not, do the levels of charges proposed represent a reasonable defrayment of NHS costs?

NPA Response  

The NPA is in agreement that the level of £500 for a full application represents a reasonable defrayment of NHS costs. Having said this we should point out that community pharmacies are healthcare providers contributing widely to the provision of NHS services. In line with other healthcare providers it therefore seems right that the bulk of costs associated with the planning and delivery of NHS pharmacy services should be met by the NHS. The NPA would like to stress

again we believe that no charges should be levied for minor relocations, change of ownership or amendments to services provided.

Proposal - The Department proposes to amend the legislation to allow NHS Primary Care Trusts 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

Question - Do you agree the proposal and scope of the legislative powers?

NPA Response

The NPA strongly objects to the Department of Health’s proposal to allow 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.

The NPA is deeply concerned that there is no clear defined decision making process from the Department of Health on why this proposal is being considered. ‘Assessing improvements’ is very subjective, what does this mean in reality? The NPA is unclear as to how this type of access would be measured, for example, would you look at the range / number of products on display, the price of such products etc.

All pharmacy businesses stock a range of OTC and healthcare products, typically the OTC and healthcare business could represent up to 20% of the pharmacy’s turnover. Therefore there is already a business driver for all pharmacies to ensure access for patients as regards OTC and other healthcare products.

The NPA believes that the over-riding principle of "adequacy" of pharmaceutical services should be the principal determinant behind the planning of local pharmacy services and therefore of taking decisions on the granting of new contracts.

In determining the necessity or desirability of an application the PCT should take into account the existing provision of services and whether the applicant fills an identified gap. Our concern about this proposal is that it will over layer the current test with a stark new test based on a claim by an applicant on the range and price of OTC medicines. This is likely to shift the focus away from a consideration of depth and breadth of service to an assessment based around a narrow component of the overall pharmacy service offering. As such it is likely to play into the hands of larger better resourced players who it is perceived may offer a wider range of cheaper medicines.

PCTs already have at their disposal various tools to accurately determine the adequacy of pharmaceutical provision, these include the Strategic Services Delivery Plan and the Pharmaceutical Needs Assessment. These two tools offer a robust method to determine adequacy of pharmaceutical provision based on patient need for the long term strategic aims of the local health service:-

Pharmaceutical needs assessment toolkit²

^{The National Primary Care Trust Development Programme3 NatPaCT, in collaboration with the Department of Health, has produced the pharmaceutical needs assessment toolkit. The toolkit supports PCTs in undertaking and regularly reviewing the pharmaceutical needs of their population so PCTs can –}

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2. • Understand the pharmaceutical needs of their population
   
   
   
   
   
   
   



3. • Take stock of the current community pharmacy services provided
   
   
   
   
   
   
   



4. • Consider the potential of community pharmacy in redesigning services
   
   
   
   
   
   
   



5. • Take a rational approach to commissioning services from community pharmacy
   
   
   
   

Strategic Services Delivery Plan

The main planning tool for primary care estate development is the SSDP and the Department of Health has issued guidance requiring all PCTs to develop a SSDP to underpin and prioritise estate investment. A guide⁴ produced by NatPaCT outlines good practice around the development of SSDPs and states that a comprehensive SSDP, amongst other things should -

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2. • Describe a whole health systems approach to capacity planning of primary care and related services
   
   
   
   
   
   
   



3. • Describe the PCT’s service vision within the local and national strategic context
   
   
   
   
   
   
   



4. • Reflect the local priorities for meeting health needs, tackling social exclusion and contributing to urban regeneration
   
   
   
   

² Available from http://www.primarycarecontracting.nhs.uk/uploads/Pharmacy/PCC%20(formerly%20NatPaCT)%20PNA%20Toolkit%20Complete.pdf

³ Is an organisation whose aim is to support Primary Care Trusts, more details available from http://www.natpact.nhs.uk/

⁴ NatPaCT 2003, A guide: strategic services development plans, gateway ref 1079 available at http://www.primarycarecontracting.nhs.uk/uploads/pcc/SSDP3.doc

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2. • Reflect local aspirations of all stakeholders (including independent contractors) to develop integrated services, around the design and development of the estate
   
   
   
   
   
   
   



3. • Be inclusive of all local health services – including those provided by local contractor professions and other providers
   
   
   
   
   
   
   



4. • Act as a joint planning document and describe planned service changes.
   
   
   
   

The NPA strongly believes that the decision making process for allowing inclusions onto the pharmaceutical list should be based on the PCTs making full use of the toolkits available to them. In addition the NPA has produced another toolkit aimed at supporting PCTs in the development of pharmaceutical provision:

Implementing a community pharmacy strategy: A practical toolkit for

primary care organisations⁵

This is a practical toolkit developed to help the appropriate PCT staff (eg primary care contracts managers, new pharmacy contract implementation leads, pharmacy teams, etc) scope, write and start to implement a PCT community pharmacy strategy based on the experience of established strategies. The toolkit provides useful guidance, practical tips and lessons learnt from NHS organisations that have started the process of scoping, writing and implementing a community pharmacy strategy.

This toolkit will allow PCTs to produce a practical workable community pharmacy strategy that will help them match the genuine gaps in pharmaceutical provision.

In summary the NPA strongly objects to the Department’s proposal to allow 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.

The NPA believes the Department of Health should be reinforcing the message of using the new contractual flexibilities to drive down health inequalities and improve access & choice for all, rather than introducing a very immeasurable and subjective measure to assess pharmaceutical applications.

⁵ Available from http://www.natpact.nhs.uk/cms/301.php

NATIONAL PHARMACY ASSOCIATION RESPONSE Page 9 of 11

Question - Larger companies may be better able to offer such improved access than smaller companies. How might this affect the proposal?

NPA Response

The NPA is fully committed in supporting the government’s self-care agenda and recognises fully that self-care forms an important part of the new pharmacy contract⁶. We also recognise fully the importance of ready and convenient access to OTC medicines. Community pharmacy has a particularly important role given that they supply both P and GSL medicines.

We are not aware of any problems in accessing medicines. The current pharmacy network ensures that pharmacies are located in a wide range of settings within easy reach of consumers. If the OTC medicine service is to be factored into the consideration of applications, and we believe it should not, applicants will inevitability make a range of claims of how they will ‘improve’ the service through range extension or price cutting. No doubt larger players will have the resource to institute deep cuts in pricing and will use the opportunity to win new contracts. At the same time there will seek to use price cutting to drive patients away from local pharmacy services thereby putting local pharmacies at threat. The impact of service erosion will be felt particularly in inner city, deprives or rural areas (where smaller pharmacies rather then larger players tend to operate) and will impact mostly upon high user groups of pharmacy – the elderly, infirm and mothers with young children. The net result of this will be a decrease in access to not only OTC medicines and other healthcare related products but also the wider range of pharmacy services.

Convenience and being local are the main factors⁷ why customers purchase OTC medicines from a pharmacy, it is therefore extremely important the smaller local pharmacies are able to continue to offer a pharmaceutical service.

If the community pharmacy network is destabilised this will have drastic effects on the health needs of the local communities in which they serve. Therefore, this will go against the grain of the governments’ agenda to promote self care through community pharmacies.

The government’s recently published pharmaceutical public health strategy⁸, Choosing Health Through Pharmacy April 2005, supports and develops the vision of an expanded role of pharmacy in health improvement. This proposal, if implemented, will cut across this vision by destabilising the community pharmacy network.

⁶ Dawn of a new era, DH press release Available from http://www.dh.gov.uk/PublicationsAndStatistics/PressReleases/PressReleasesNotices/fs/en?CONTENT_ID=4107503&chk=SL9Ji9

⁷ Survey on the use of prescription pharmacies in the UK, OFT report 2003, page 126

⁸ Available from http://www.dh.gov.uk/assetRoot/04/10/74/96/04107496.pdf

NATIONAL PHARMACY ASSOCIATION RESPONSE Page 10 of 11

In addition community pharmacy plays an essential role in the local economy, Department of Health research⁹ indicates that there are three essential businesses that ensure the economic prosperity of local community; namely a GP surgery, a pharmacy and a source of cash (usually a post office). This provides further evidence of the need of community pharmacies in local neighbourhoods to ensure economic prosperity.

The NPA strongly opposes the proposal and would therefore ask the Department of Health to seriously consider the consequences on the existing community pharmacy network before proceeding with the proposal to allow 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.

⁹'Improving Shopping Access for People Living in Deprived Neighbourhoods' – a paper for discussion', 1999

NATIONAL PHARMACY ASSOCIATION RESPONSE Page 11 of 11 NATIONAL PHARMACY ASSOCIATION RESPONSE

Question - Applicants may promise to improve access to over-the-counter products and services and then fail to deliver. How could this be monitored and by whom?

NPA response

This is very much a concern to the NPA, this question highlights another major problem in accepting this proposal. In introducing a very subjective measure into the decision making process for pharmaceutical applications one needs to be able to measure it.

The NPA believes there is a very real prospect that applicants will over promise and under deliver. As things stand, pharmacy services are covered by the new pharmacy contract and the regulatory framework outlining the scope of service provision and compliance. This proposal aims to take things forward and will require an assessment of applications on the basis of the extent to which applicants claim they will ‘improve’ OTC service provision. This will require a new approach to monitoring and even if a process can be found or developed will the cost and other resource issues associated with it, outweigh the perceived limited benefit to the consumer? In assessing cost benefit, account must be taken of the adequacy of existing arrangements and the potential negative consequences of this proposal on the pharmacy network.

Potential difficulties in monitoring include – A regular audit to quantify the number of products on sale and an assessment or pricing of products. There would also need to be a mechanism for determining whether a contractor has failed in its obligation and if so, deal with transgressions.

Even if you found an accurate and fair measurement procedure, who would carry out the monitoring? The NPA cannot think of one organisation that would be happy to undertake such a task. In the 2003 OFT consultation the vast majority of PCTs were not in favour of the proposal and questioned who would carry out the monitoring. If PCTs are the ones who would determine applications surely they would be best placed to monitor compliance. However due to the fact the majority of PCTs questioned compliance the inference from this would be they themselves cannot realistically see how one could monitor compliance for such an immeasurable and subjective measure.