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NPA: ‘Vast majority’ of independents ‘still sceptical’ about hub and spoke

The “vast majority” of independent pharmacies are “still sceptical” about the hub-and-spoke model, a National Pharmacy Association (NPA) director has told C+D. 

The NPA is “not hearing any clamour from lots of members to jump on board [with] hub-and-spoke [dispensing] in the short term”, head of corporate affairs at the NPA Gareth Jones, told C+D last week (February 4).

Following the passing of the Medicines and Medical Devices Bill last year, the Department of Health and Social Care (DH) now has the power to change legislation to allow all community pharmacies to operate a hub-and-spoke dispensing model, regardless of whether they are part of a chain or an independent.

However ,the government has “done nothing else to actually – at this current time – incentivise this, to make it something that would be more desirable for pharmacy”, according to Mr Jones.


Three reasons why independents are sceptical


There are “three broad reasons” why independents “are still sceptical” of the hub-and-spoke model, Mr Jones told C+D.

The first issue is related to costs associated with the model. "The hub provider will charge a service fee for supplying [the medicines]. Potentially, the pharmacy may lose some of the discount that it gets at the moment [from wholesalers], some of the buying margin, which is a key part of the income of community pharmacy,” he added.

Instead, the government could incentivise the model by introducing "new services and income streams because that would certainly address one of the key challenges, by helping build a business case that would be accessible for more pharmacies”, Mr Jones suggested.

The lack of “competitive market among hubs” at present is also putting contractors off the model, Mr Jones told C+D. “You'll only get competition if you've got enough market players,” he added.

“Of course, quite a significant financial investment is required to set up a hub. Until we can see a vibrant hub market, with people competing to win the contract of those pharmacies, I think people would have a real concern with that service, that they may not get what they need from it.”

The “third” reason, he told C+D, is the “operational challenges” contractors would face when using a hub.

“Part of the way you make hub and spoke work is actually to reduce your stockholdings in the pharmacy. So, you're less able to deal with unexpected situations,” he said. “The hub is putting a barrier in place to make it harder to be as responsive as we are now.”


“Little sign” hub and spoke works well for multiples


In November, Mr Jones told delegates at a Sigma webinar that he did not see hub and spoke “revolutionising pharmacy practice within multiples either”.

He told C+D: “They've been trying to make this work for quite a number of years. But there's little sign that it's working so well that they're expanding their operation.”

Pharmacies that have adopted the model have “mixed views” about it, he claimed

“People find problems, practical problems” – for instance, hubs are not currently able to cope with complex prescriptions involving fridge or bulky items, Mr Jones said.


No date confirmed for hub-and-spoke consultation


In November, the DH published the results of an eight-week consultation it ran in 2016 on proposed changes to medicines legislation, which included questions on the hub-and-spoke model.

A further consultation providing more depth on its hub-and-spoke proposals is expected to be announced shortly.

However, Mr Jones told C+D that the NPA is not aware of when that is going to be launched.

“Certainly, we will respond, and we'll give advice to our members if they would like to respond, too. What we will do is analyse it and tell [members] the points that we think are important and the points to be made on behalf of the independent sector,” Mr Jones added.

C+D revealed last year that Lloydspharmacy had reviewed the number of branches it deemed suitable for its hub-and-spoke model after deciding that it only works for “some” pharmacies.

Meanwhile, speaking at the Pharmacy Show in October 2021, Numark managing director Jeremy Meader said that while the model has “proved very successful” for Rowlands, independents or small pharmacy chains may find an alternative solution “easier”.

For more view on hub-and-spoke dispensing, see C+D's Big Debate on the topic over on the C+D Community



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