Advisory Group on the Reform of the NHS (Pharmaceutical Services) Regulations 1992

Advisory Group on the reform of the NHS (Pharmaceutical Services) Regulations 1992 Report

Executive Summary

1. This report sets out the conclusions and advice to the Secretary of State for Health of the Advisory Group on the Reform of the NHS (Pharmaceutical Services) Regulations 1992.

2. We met five times to consider the Government's reform proposals announced on 17 July 2003 and further elaborated in the Department of Health consultation document published on 29 August 2003. We also considered views received in response to the consultation.

3. As regards the concepts of competition and choice, the effect of the National Health Service Act 1977 (as amended) currently requires Primary Care Trusts (PCTs) to assess the adequacy of NHS pharmaceutical services in a given neighbourhood. If a PCT has determined that the current position is inadequate, it then considers whether it is "necessary or desirable" to award NHS dispensing rights to an applicant pharmacy. These provisions have been the subject of extensive testing in the Courts. We noted that unless exceptions to the necessary or desirable test are specified, the current framework means it is easier for a PCT to refuse an application than to approve one.

4. We noted the Government had proposed that two key questions should be assessed positively. The intention was that applications should proceed unless, when considered in conjunction with such other factors the PCT deemed relevant to take into account, they would be clearly detrimental to the adequate provision of pharmaceutical services in the neighbourhood.

5. The first key question is designed to ensure an application meets the minimum expected levels of service provision within the proposed new contractual framework for community pharmacy. Our conclusion and advice is:

• We support the introduction of the first key question so that a PCT shall not accept any application which does not meet the "essential" tier of services (to be met in due course by all pharmacies) under the new contractual framework when that has been agreed. However, we consider this can be achieved administratively and does not require amendment to the Regulations. We do not consider it necessary to reflect the next tier of "advanced" services within this provision.

• We commend the adaptation of criteria such as those being developed by the Sheffield PCTs for use in their NHS LIFT assessments to help PCTs in their evaluation of applications.

• The Department of Health should give further consideration to the transitional arrangements needed for introduction of this approach.

• The Department of Health should also consider the criteria to be used for applications by appliance contractors. Such criteria should aim to reflect as closely as possible those used for applications from pharmacy contractors.

6. The second key question concerns whether an application would lead to the provision of additional or higher quality services and/or whether it would increase choice and competition in the relevant neighbourhood. We noted the intention behind this question was to help a PCT first assess local market characteristics to determine if a new application would increase the range, choice or quality of current services available. PCTs would also consider the longer-term impact of the application on competition, in terms of future overall access to, and choice of, competing pharmacy services. Our conclusion and advice is:

• The test of "adequacy" is a mixture of law and fact which is for the PCT to determine and can encompass both a quantitative and qualitative evaluation.

• The introduction of the concepts of choice and competition within the current regulatory framework would mean that a level of uncertainty would persist and the possibility of judicial reviews of decisions could not be ruled out.

• Whilst introducing additional grounds for refusal of an application in terms of "market share" would be a more certain method, this could constrain rather than enhance competition.

• Primary legislation would be the preferred vehicle for certainty and clarity.

• The alternative possibility of using a Regulatory Reform Order should be considered.

• Local Pharmaceutical Services should be promoted as one available interim mechanism to enhance consumer choice.

• Further guidance on the meaning of the test of adequacy would help PCTs implement the new regime.

7. We considered whether PCTs should make use of further supplementary questions to augment assessments. We concluded that supplementary questions might best be addressed through use of prototype evaluation criteria such as those developed by the Sheffield PCTs. We considered that were it possible to provide in future for over-the-counter medicines availability and services to be considered as part of an NHS pharmacy

application this should occur, given the increased focus on and role for self-care in the future. However, this is not possible within the current primary legislation.

8. We examined Chapter 4 of the consultation document in detail. This sets out four categories of pharmacy applications to be exempted from the control of entry tests.

9. For applications from pharmacies in large shopping developments over 15,000 square metres gross lettable floor space, our conclusion and advice are:

• The Regulations should contain a clear definition of the locations to which the exemption will apply. As a wide variety of developments could be covered within this exemption, one possible definition would be:

"A retail development with gross lettable floorspace in excess of 15,000 square metres, developed as a single physical entity."

The Regulations should be amended to refer to inclusion in a list maintained by the Secretary of State. The list should be published on the Department of Health website and regularly updated.

The Department should consider further how the list is to be compiled and updated and provide guidance for PCTs.

10. For applications from pharmacies that intend to open for more than 100 hours a week, our conclusion and advice are:

• The Regulations should be amended as suggested in the consultation document.

• The Regulations should require PCTs to remove from their pharmaceutical list pharmacies which consistently fail to meet the terms of the exemption unless there is good cause.

• PCTs should determine whether, in such cases, there is good cause or not.

• The Regulations should contain safeguards to prevent manipulation or abuse of the exemption.

• The impact of new arrangements for out-of-hours access to medicines on this exemption should be monitored.

11. For applications from members of a consortium to establish one of the new one-stop primary care centres, our conclusion and advice are:

• The criteria defining one-stop centres should be based on the range of services offered and such centres should be part of the PCT's Strategic Service Development Plan.

• Such services should be provided at a level substantially above that of a normal GP practice, offering a range of primary care and related services to a substantial patient list, on a frequent, regular and continuous basis.

• This should not, however, preclude a range of providers who may not provide services "full-time" but who collectively offer services to a similar degree.

• However, arrangements where a number of practices are working together to provide a range of services but are not physically co-located on a single or "campus" site should be excluded from this exemption.
• The Regulations will need to cover situations where a service provider withdraws from a centre so that this does not require the closure of the pharmacy.

• The Regulations should define what a "consortium" is for those seeking to make use of this exemption and should specify governance arrangements.

• This should be backed up by clear guidance to PCTs.

12. For applications to provide wholly internet or mail-order based pharmacy services, our conclusion and advice are:

• We consider the definitions of an internet or mail-order based pharmacy as set out in the consultation document adequate, provided that the Regulations are amended to include measures to prevent exploitation and to meet the usual legal requirements for operating such a pharmacy.

• The Regulations should specify the minimum levels of service such contractors are to provide from the national contractual framework once that has been agreed.

• Such pharmacies should not be able to benefit from the special provisions which apply in rural "controlled" areas.

• In addition to the conventional RPSGB monitoring, the Department should monitor the effect of implementing this exemption.

13. We noted that as exemptions, all these categories must remain exceptions to the general "control of entry" test. If, however, their cumulative effect were to override the test, the changes would in due course be 'ultra vires' the existing primary legislation. We support the intention to link these four exemptions, either generally or specifically in the case of wholly internet or mail-order based pharmacies, to the services being developed

under the new contractual framework for community pharmacy.

14. The Group has also considered and advised on 14 proposals and possible options for streamlining the applications, decision and appeals procedures relating to the regulations. We provide advice on implementing all proposals including those where we think administrative rather than regulatory measures may be more appropriate. We express reservations about allowing automatic minor relocations within a set distance of 500 metres and the abolition of the "first past the post" principle for deciding competing applications of equal merit. Otherwise we support all the proposals and provide more advice on the possible options, including introducing charges for applications and appeals. We also make further suggestions regarding setting dates for PCTs to receive applications and requiring PCTs to decide minor applications more quickly.

15. Finally, we also considered work already developed by the Pharmaceutical Services Negotiating Committee, the General Practitioner's Committee of the British Medical Association and the Dispensing Doctors' Association to reform the rules governing rural dispensing which they reviewed in the light of the Government's proposals. We recommend these measures are taken forward in tandem with the other reforms planned.

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copyright: © | published: 2 March, 2004

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