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It's time to level the playing field for independent community pharmacies

In the second of a series on England's broken community pharmacy contract, Andrew Lane looks at how the current arrangements disadvantage independents

Independent pharmacy teams are special in many ways – by their nature locally engaged, innovative and ready to go the extra mile to care for their patients.

Testimony recently given by the National Pharmacy Association (NPA) in the COVID-19 public inquiry is a reminder of this. Our lawyer told the story of Calow Pharmacy in Chesterfield and how the husband and wife team running it, Pete and Sukhi Johal, refused to let their community down despite the intensity of COVID-19-related work pressures.

Read more: Patient group: Over-60s ‘overwhelmingly’ prefer indies to supermarket pharmacies

Yet independents like this are not supported well by the current community pharmacy contractual framework.

Firstly, the averaging processes on which the current arrangements rely tend to work against independents. It is harder for them to secure the best medicine prices in the first place due to volume discounts. Yet clawback of excess margin is applied equally across the board.

Independents also can’t hedge their risks in the same way large multiples can. If a small independent is a loser among the winners and losers inherent in the laws of averaging, it can lose big.

The reconciling of global sum figures has little meaning for a single contractor paying above the odds for medicines, buying blind and not properly compensated by the NHS for the expenditure.

In addition, current contract arrangements put pharmacy owners at the mercy of circumstances largely beyond their control. This includes local factors like branded generic prescribing, varied periods of treatment and the reluctance of some GPs to refer into services like the community pharmacist consultation service (CPCS).

The extent to which pharmacies are affected by this is something of a geographical lottery and it is certainly not a level playing field. Once again, small independents operating within a single locality are most susceptible to losing big because of factors they have little power to change.

Other inequities built into the current system relate to the treatment of bricks-and-mortar pharmacies compared to online providers.

Read more: Legal view: What happens if I refuse to dispense at a loss?

All dispensing contractors, such as high street pharmacies, 100-hour pharmacies and online pharmacies, are paid in the same way for dispensing. But all offer a very different profile of services.

Pharmacies with publicly accessible phone numbers, for example, receive large numbers of calls for advice from those who do not receive prescriptions from there.

Pharmacies with a publicly accessible premises, especially those who provide extended opening hours, receive large amounts of returned medicines that were dispensed elsewhere.

People will often come into these pharmacies for informal advice because GPs or health centres may be closed at those times.

Read more: ‘We're exactly the same’: Pharmacists should be paid like GPs, says APPG chair

In all these ways and more, the pharmacy contract fails the fairness test.

Fairness should be one of the principles applied to reform of contractual arrangements. It’s as high on our list of demands as an overall increase in funding across the sector. We want to see a bigger cake, divided fairly. Neither is enough by itself.


Andrew Lane is chair of the NPA


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