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PSNC: ‘Virtually no financial efficiencies’ in DH's hub-and-spoke proposals

The Department of Health and Social Care’s (DH) hub-and-spoke dispensing proposals offer “virtually no financial efficiencies” for pharmacies, the Pharmaceutical Services Negotiating Committee (PSNC) has suggested. 

Instead, the proposals are “more likely to add cost to the community pharmacy sector”, PSNC cautioned in its response to the DH’s consultation on hub-and-spoke dispensing.

The consultation proposes making legislative changes across the UK to allow the operation of hub-and-spoke dispensing across different legal entities and sets out two proposed models for this.


The two hub-and-spoke dispensing models

First model: Patient presents prescription to the spoke pharmacy. The pharmacy sends it to the hub, which prepares and assembles the medicines. These are sent back to the spoke, which supplies them to the patient.

Second model: Same as above but the hub sends the medicines directly to the patient’s home rather than to the retail pharmacy.


However, PSNC fears that hub-and-spoke “will add in incremental operating cost for English pharmaceutical provision, and further undermine financial sustainability of all individual pharmacies”.

“There are virtually no financial efficiencies envisaged by these hub-and-spoke dispensing proposals,” it added.


Read more: AIMp: Cap number of patients per ‘hub’ pharmacist or risk ‘race to the bottom’ on costs


The negotiator also urged the DH to consider the “value to the NHS and society of medicines supply through spoke pharmacies” and the “value to the public purse of community pharmacy purchasing of generic medicines”.


“Minimal financial benefit” from models


PSNC said that the DH has anticipated “minimal financial efficiencies” to result from its-hub and-spoke dispensing proposals, which the negotiator has calculated to be in the region of £3.3 million.

“However, if the assumptions in the impact assessment are considered, this minimal financial benefit is itself highly doubtful,” it added.

The impact assessment shares assumptions of dispensing time-saving reductions, but should go further to suggest “the ability to ‘convert’ the dispensing time-saving into a financial benefit – which is then needed to enable a pharmacy to pay for the new additional cost of the sub-contracted assembly service”, PSNC said.


“Only Model 1 is appropriate”


PSNC rejected the DH’s second model on hub and spoke (see table above) on the basis that it “raises patient safety issues”.

“PSNC considers that only model one is appropriate, with manageable risks relating to patient safety, and is a model that has the potential to allow the whole sector to benefit fairly,” it added.

PSNC also noted that patients are already able to access remote and national supply pharmacies with no physical access for patients, either on private or NHS prescriptions.


Read more: DH launches long-awaited pharmacy hub-and-spoke dispensing consultation


Other concerns raised about the second model also include “ambiguous” aspects of the proposed legislation, which would “require further consideration to ensure there are no unintended consequences”, PSNC added.

“Specifically, the wholesale licensing requirements could be disapplied to supplies of assembled medicines from hubs to spokes, rather than describe a new type of retail supply, which is complex and potentially confusing,” it said.

The second model also presents “market entry concerns”, with the “proliferation of hub pharmacies”, the negotiator said, which “would be problematic to address in NHS Pharmaceutical Regulations” – although PSNC noted that “this is not the subject of this consultation”.

The DH’s consultation on the hub-and-spoke models ran until June 8.

In its response to the consultation, the Association of Multiple Independent pharmacies (AIMp) warned that pharmacists based in the hub of a hub-and-spoke system should only be able to dispense prescriptions to a set number of patients.

Lack of regulation in this area could lead to a "race to the bottom on pharmacists' costs", it stressed.


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