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GPhC and CMA warn pharmacies against profiteering from COVID-19

The GPhC and the CMA have issued a joint warning to pharmacies after receiving reports of some businesses allegedly charging over the odds during the COVID-19 pandemic.

A letter from the General Pharmaceutical Council (GPhC) and the Competition and Markets Authority (CMA) yesterday (June 29) said they had received reports of a “small minority” of pharmacies trying to benefit from the pandemic by charging “unjustifiably high prices” for key products.

These items, which the organisations said “continue to be in very high demand”, include hand sanitiser, face masks and paracetamol.

The letter, addressed to pharmacy owners and superintendent pharmacists and sent to all pharmacies in Britain, said the CMA has already launched investigations into four retailers, including pharmacies, that it “suspects have charged excessive and unfair prices for hand sanitiser products”.

The CMA declined to name the four retailers when asked by C+D yesterday, but the letter said that if they were found to have breached competition law, the consequences would be “potentially significant” and could include “financial penalties”.

The letter follows earlier CMA warnings to retailers not to put pries up during the COVID-19 outbreak .

In March, solicitor Susan Hunneyball told C+D that pharmacies found to be profiteering from the pandemic could face “serious sanctions”.

Unjustifiable mark-ups

The CMA and GPhC said in the letter that while the numbers involved “may be small,” they were writing to all pharmacies to explain their respective roles and expectations in relation to this issue, which has been “prominent in the public eye”.

The letter said the CMA was concerned about “any price charged by a pharmacy for an essential product that is higher than the price that would prevail under normal competitive market conditions”, as a direct result of the pharmacy adding a “higher than usual percentage mark-up on the wholesale price it has paid”.

It added that the CMA recognises pharmacies may be paying higher prices to wholesalers for some in-demand products and that increased wholesaler costs will “feed through” to the retail prices pharmacies charge customers.

But this does “not justify the pharmacy increasing its own percentage mark-up on the wholesale price”, the letter stressed.

Pharmacies experiencing “large price rises or other unfair practices” from suppliers should instead report this to the CMA via its online complaints form, the letter said.

The CMA added that although the extra operational costs pharmacies could be facing for cleaning and PPE might justify “a limited increase in general mark-ups”, they do not justify “disproportionately increasing mark-ups on essential products”.

This would only be acceptable if the additional operational costs directly related to the sale of those essential products, the letter said.

“Damaging public confidence”

The GPhC said in the letter that it has already written to a number of pharmacies about price increases. In some cases, this has involved asking the pharmacy to review a particular price and inform the regulator of any steps they plan to take, it said.

“We will not usually take action on matters that are purely commercial in nature and have no medicinal or practice-related element unless there are broader issues that would impact on public confidence,” the GPhC said.

But any pharmacy found to have breached competition or consumer protection law “risks facing action by the GPhC for damaging public confidence”, it added.

The letter urged pharmacy owners to carefully consider decisions about pricing and ensure they shared this information with relevant colleagues.

The GPhC and the CMA thanked pharmacies for providing their services in a pandemic and “for helping to maintain public confidence in pharmacy at such a critical time”, emphasising that the “vast majority” are continuing to “look after people under exceptionally challenging social and business circumstances”.

"Frustrating"

Royal Pharmaceutical Society president Sandra Gidley told C+D today (June 30) that the RPS is “proud of every pharmacist who is working flat out in exceptional circumstances to manage the demands of the pandemic”.

It is “therefore frustrating that a minority of cases can cast a shadow over the pharmacy profession by putting profit before professionalism,” she added.

“While we understand the commercial pressures that face community pharmacy, we cannot support any form of profiteering from a public health crisis. Public confidence in the pharmacy profession must be maintained and we are therefore fully supportive of the action taken by the GPhC and the CMA in discouraging disproportionate price increases on essential items,” Ms Gidley said.

A spokesperson for the National Pharmacy Association (NPA) told C+D yesterday that: “Any unjustifiable pricing in a minority of pharmacies risks obscuring the heroic efforts of pharmacists across the land during the coronavirus pandemic.”

What are your thoughts on the message in this letter?

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