Following on from the Galbraith Review and Pharmacy White Paper for England, the initial consultation on proposed changes to pharmacy control of entry have now been released. A brief summary of the consultation and some commentary on this is set out below.

The consultation, “Pharmacy in England: Building on strengths - delivering the future - proposals for legislative change”, essentially accepts and builds on proposals set out in the Galbraith Report and 2008 Pharmacy White Paper.

It proposes changes to pharmacy, dispensing doctor and appliance contractor control of entry rules. The first of these determine when and where contractors can provide NHS pharmaceutical services. The proposals, if implemented, would remove the current control of entry test and place powers with Primary Care Trusts (PCTs) to determine market access by reference to local needs - evidenced by pharmaceutical needs assessments. Use of current exemptions to the general control of entry test could also be restricted under the proposals.

The consultation also covers other related matters such as proposals to penalise underperforming contractors, list all pharmacists working in NHS community services in a PCT area and allow dispensing doctors to sell over the counter medicines (OTCs).

W hat is in the consultation?

The changes proposed in the consultation are as follows: 

  • Chapter 2 deals with the main pharmacy control of entry test and what has become known as the “necessary or desirable/expedient” test.

The consultation discusses this alongside current exemptions (eg 100 hour pharmacies) and argues that this provides quite a rigid regime that does not allow PCTs to plan pharmaceutical services. Changes are proposed to give PCTs more responsibility to secure effective commissioning of services to suit local needs.

The proposals are also intended to give PCTs more choice in terms of provider, the quality and type of services delivered and when and where they are provided. A guide to commissioning in primary care is expected in the autumn to support PCT primary care commissioning although this will precede any changes proposed in the consultation. No timelines for implementation of changes are set out in the consultation.

In summary, the proposal is to change the current control of entry test with one that is determined and guided by local Pharmaceutical Needs Assessents (PNAs). PNAs are assessments carried out by PCTs that highlight current services and where these can or need to be developed ie gaps in the market or where there is good or oversupply of services. These were generally carried out in 2005 to support the new pharmacy contract but were of varying quality and depth.

PNAs would be reviewed and revised where necessary to support rational decision making under the revised test. They would also identify needs that could stimulate competition.

Under the new rules “neighbourhoods” would not be considered but an overall assessment of PCT needs and local issues would be taken into account when awarding new contracts and the PCT could go out and request applications for service suppliers where a need was present.

The consultation proposes what it calls “safeguards” to ensure that the test is applied equitably and transparently. It is stated that PCTs should demonstrate that new applications are considered objectively against PNAs, fairly and without bias, with transparency and with reasoning for decisions supplied. The consultation also refers to a balancing requirement under the new test whereby PCTs have control of services but providers have a “reasonable prospect of success” - the consultation states that discussions on funding will follow with Pharmaceutical Services Negotiating Committee (PSNC). Legislation would set out certain factors to be considered in the new test including levels of access, choice and diversity, innovation, services to specific populations or with specific conditions, and overall longer term impact of services. Appeals on decisions would be made to the NHS litigation authority. The new rules would allow far greater differentiation between competitors than currently exists.

Importantly, the consultation says that it is envisaged that the need for the current exempt categories to the control of entry test (other than mail order/distance selling) could disappear under the new regime. This would mean that the 100 hour exemption could be removed although separate parallel proposals are also mentioned - see below. 

  • Chapter 2 also makes proposals relating to performance of pharmacy contractors and the implementation of sanctions (in addition to current fitness to practice measures) that would in effect lead to withholding or reducing payments to contractors that fell short of required standards. This is designed to attack contractors that habitually provide a lower service level, not such that removal from the list is appropriate but where some sanction is needed. The main aim is to remove bad performers, raise standards generally and allow good performers to prosper. In the longer term the consultation refers to payment structures rewarding successful patient outcomes. 

In the shorter term, evidence on quality measures relating to safety, experience and outcomes could be used to control performance via use of “Quality Accounts” in addition to obvious complaint records and evidence from monitoring visits. Quality could also be defined by reference to terms of service, governance arrangements, premises, qualifications, training and service delivery standards. 

  • Chapter 3 refers to problems that have been created with the current 100 hour exemption. These can be summarised as allowing market entry that destabilises existing contractors where the PCT cannot plan services. Evidence shows that 100 hour pharmacies tend to cluster in one area and not where PCTs would like services. The consultation sets out the options raised by Galbraith. Previously, the Department of Health (DH) had favoured option 1 (a distance restriction between pharmacies) and option 4 (strengthen requirements for specific services) but the proposal indicates that the DH now favours use of the 100 hour exemption when used subject to locally negotiated LPS contracts.

The locally negotiated contracts could contain elements that provide for minor ailment schemes, out of hours services, urgent advice and Emergency hormonal contraception and these could be added to services required from existing 100 hour contractors. This is a significant shift in DH position and must be read alongside the comments noted above about the probability that exempted categories might not be needed under a revised control of entry test. 

  • Chapter 3 proposes a “supplementary list” for individual pharmacists to vet practitioners and allow control of standards of service on an individual pharmacist level. This could possibly be extended to technicians but this is not proposed initially. 
  • Chapter 4 of the consultation deals with dispensing doctors. It is important to note that the consultation recognises the ongoing sensitivity of dispensing doctor services and, whilst setting out options for change (changing or removing the distance requirement under the current test), the consultation makes clear that the DH has not formed an opinion on any particular proposal for change. It is unclear whether this will result in any major reform - the greater cost of the dispensing doctor service is one point that is highlighted but this has been challenged by dispensing doctor representatives. 
  • Chapter 4 also sets out proposals to allow GP’s to sell OTCs to patients - this is a new feature that will requires changes to GP terms of service and related Medicines Act changes. 
  • Chapter 6 of the consultation deals with a mixed bag of other changes to legislation and includes a proposal to allow PCTs to directly provide LPS type services where this is felt necessary. This proposal is hidden right at the end of the consultation but could provide some radical changes and opportunities in terms of community pharmaceutical service delivery. These powers would allow PCTs to provide services directly under LPS arrangements (these can cover a wide range of services) that could directly compete with existing contractors.

Comments can be submitted on the consultation until 20 November 2008 and can be found at:

Industry response to the consultation

Whilst the rationale behind the changes proposed in the consultation has drawn broad support from the pharmacy sector, the general push to place more power in the hands of PCTs has raised concerns. Company Chemists Association and AIMp Ltd chief executive Rob Darracott said: “We... would express an initial concern over the ability of PCTs to assess standards, the potential for the development of a multiplicity of views over what is an appropriate standard or quality of service, and the double jeopardy that may arise from standards inspections or competency assessments by both PCTs and the regulatory body.”

NPA head of external relations Stephen Fishwick agreed: “Our support for a lot of the measures in the white paper is contingent on PCTs’ capacity and capabilities.”

These comments clearly indicate that the market is generally not convinced that PCT commissioning capability is such to support the discretion that could arise under the new rules. As with the current system, decisions of PCTs would be subject to appeal, with the ultimate remedy of judicial review.