Government backtracks on pharmacy deregulation
‘Balanced package’ to protect local needs
July 17 2003
The UK government has rejected plans for a full scale deregulation of the pharmacy market.
In a move signed to protect smaller community pharmacies, local health trusts, which issue pharmacy licences, will have to consider the impact on consumer choice when considering applications for services.
In practice, this could see supermarket operators such as Tesco and Asda blocked from opening pharmacies where there might be an adverse effect on existing businesses. The supermarkets will have to a new legal criteria that a proposed pharmacy is ‘necessary or desirable’.
However, there will be two key exemptions from the new regulations which may allow scope for supermarkets to expand their pharmacy offer. Pharmacies intending to open up in large shopping centres, defined as more than 15,000 sq m, would be exempt from the new licensing criteria as long as they provided a full range of services. Pharmacies which remain open for more than 100 hours a week would also be exempt.
An Office of Fair Trading report earlier this year recommended opening up the market for prescription and over-the-counter medicines by remove restrictions, which effectively protect the market share of existing licence holders such as Boots and Alliance UniChem. The proposals were welcomed by supermarket operators, who see the pharmacy market as a strong area for potential sales growth.
Trade and Industry Secretary Patricia Hewitt said that in responding to the OFT recommendation, the government was taking into account wider NHS policy objectives and the impact of changes in regulations on NHS services and patients.
Patricia Hewitt said: “Community pharmacies play a vital role, particularly in rural and poorer areas, and we will do nothing to jeopardise their position. Pharmacists are trained clinicians, not simply shopkeepers, and they will have an even greater role in the NHS of the future.
“In responding to the OFT report, we have been sensitive to the wider NHS policy objectives, and the impact on NHS services and patients. That was not part of the OFT’s remit. But its recommendation must be seen within the broader picture of healthcare services being based on local needs.
“We do not believe that simple deregulation is the best way to achieve our aims. The OFT made a strong case that the current control of entry rules impede competition and reduce benefits for consumers. But given the current shortage of pharmacists, and the Government’s desire to see pharmacies given a new and strong role in the modern NHS, the Government does not believe that this is the time to move to a fully deregulated system.”
Along with the obligation on Primary Care Trusts to consider impact on consumer choice, the measures announced also include improved patient choice through access to internet and mail-order services.
Alliance Unichem, which operates the Moss Chemist pharmacy chain as well as the Unichem distribution business, said the proposals offer significant opportunities for community pharmacies, whether as part of chains or independents pharmacies. The company rased that the easing of restrictions on pharmacies in retail developments, as well as mail order and internet pharmacy, would benefit custimers, but it should not be allowed to damage the existing pharmacy infrastructure.
Steve Duncan, retail director said: “This is the right response for both patients and pharmacists given the current pressures in our sector. These proposals provide a platform for us and our independent pharmacy customers to further enhance services, while the proposed new national contractual framework for community pharmacy will form a better basis to promote and reward high quality pharmacy services for patients.”
