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DH plans for pharmacy mergers could reduce 'clusters'

Department of Health: Establishment payments encourage clusters

Department of Health proposals would make it easier for neighbouring pharmacies to combine if one business has to close

The government is considering plans to reduce “clusters” of pharmacies by making it easier for two businesses to merge if one closes.

The proposals, first outlined in a Department of Health (DH) presentation to pharmacy bodies last month (April 28), are designed to “facilitate the consolidation of pharmacies in areas of clustering”, it said.

Not only for funding cut closures

The Pharmaceutical Services Negotiating Committee (PSNC), which is discussing the plans with the DH, told C+D that the proposals are not specifically designed to prepare for the closure of pharmacies as a result of the planned 6% funding cut in England.

Instead, they could apply “in any scenario where two pharmacies might merge their businesses onto the same site”, PSNC director of regulation and support Steve Lutener said last Friday (May 6).

The mergers would be “voluntary arrangements”, Mr Lutener stressed.

PSNC had “raised the possibility” to the DH of amending legislation to enable mergers, as one means to reduce “local clusters of pharmacies”, Mr Lutener explained.

It could not confirm how far talks on this issue had progressed, as “all discussions with the DH are confidential until there is an agreement”, he added.

The DH said that, although the government is looking into ways to support mergers, it has “no plans to change the current basis of market entry”.

Background: what are clusters?

The DH has already said it believes that the current system of establishment payments – which it intends to abolish – encourage pharmacies dispensing “relatively low” volumes of prescriptions to “cluster” along a high street or around GP surgeries.

Last week, Pharmacy London defended the need for clusters in the capital, because they can "tailor their services to meet the diverse cultural and language needs that we have”.
 


Do you consider your pharmacy to be situated in a “cluster”?

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22 Comments

Susan M Shepherd, Community pharmacist

The examples of this type of "clustering" I have come across whilst working in Community pharmacy are done by the big companies, not independents. Buy out a retiring pharmacist and lo and behold you now own and operate two pharmacies facing each other across the market square. But the two have never been merged in my experience.

Chris Pharmacist, Community pharmacist

Personally I think only a few pharmacies will actually close, most contractors will just adapt to a lower income, employing less staff, fewer bonuses, reduced use of locums. Perhaps the multiples may close a few loss-making pharmacies but not many...but the pressure will be increasingly felt on the pharmacies that remain open with companies less willing to invest in staff hours/locum cover...a slow decline in quality of service and staff morale.

Chris Locum, Locum pharmacist

...and that pressure will eventually become a catastrophe as staff go on the sick and the pharmacist is left to carry the consequences of serious errors. I don't think many premises will close at the outset, cutting hours and remuneration will be used first. However, it will lead to a working environment inherently prejudiced to error no matter how many SOP you write.

Pill Counter, Pharmacy

You make it sound like a downward spiral

Alan Whitemann, Communications

It certainly looks that way from what I'm seeing Ms Chauhan . Haven't seen any upward convections recently, have you ??

Philip Caton, Community pharmacist

Does anyone have a figure for what they mean by low volume btw? 4000pm 5000pm 3000pm??

Leon The Apothecary, Student

The wording suggests it is compared to the average in a given area. Allowing perhaps a culling regardless of success?

M Elnemy, Non healthcare professional

If there NHS wants to save money, it should de-regulate the industry, pay a flat fee for each item and let market forces dictate the winnners and loosers.....decreasing the no. of pharmacies isnt the answer

Ben Merriman, Community pharmacist

Why is it acceptable for that to happen to contractors but not for locums?

A Hussain, Senior Management

Ben you are 100% correct.  These trolls on here are happy for contractors to get shafted and risk losing their businesses, but cry over not having a rise for x number of years.  If you choose self-employment that is the risk you take.

M Elnemy, Non healthcare professional

I agree 100%.....and the logic goes for contractors too......the NHS has every right to deduct our fees............so stop moaning like a spoilt brat and accept the cuts in fees....

Ben Merriman, Community pharmacist

Of course, the preference is for neither to happen.  Just getting fed up of Kvin Petersen was right/Mesut Ozil/Mohammed Elneny/whoever else is playing well for Arsenal (because it's easy to troll under a cloak of anonymity) completely contradicting his own tripe.

M Elnemy, Non healthcare professional

Benny........the cuts dont bother me as I have my hands in other pies like every sensible business man does....I dont cry when our fees go down....I have my bases covered....just increased the  rent on the four CASH  properties I rent out by £200 PCM....

wohooooooooooo  £9600 helps mitigate the cuts in contractor fees.......

Its called foward planning...... :)

 

Ben Merriman, Community pharmacist

Ah, yes, name calling.  For a second I thought you'd changed...

Dave Downham, Manager

What tosh - there is no such thing as a merger, but there might be a takeover with one closing.

Harry Tolly, Pharmacist

What they really means in practise is this :

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In area Z where multiple L and multiple B have a shop multiple L could close and let multiple B have a local MONOPOLY

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In area Y in an adjacent town where the same 2 multiples have shops Multiple B could close and let L have a local MONOPOLY

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This would be contingent on the local area teams then denying ANY NEW contract application.

 

What a total stitch up and TOTALLY against the public interest.

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Local MONOPOLIES and ZERO competition , what is the DoH so scared of in allowing competition to drive up standards ??? In EVERY walk of life it has been shown that competition drives up standards. Clearly, the Boots MUR scandal has taught the DoH nothing.

Ben Merriman, Community pharmacist

“All discussions with the DH are confidential until there is an agreement” - who the hell has agreed with the changes to the contract announced on December 17th?

Harry Tolly, Pharmacist

This IS a stitch up between the multiples dominated PSNC and the DoH. Its a done deal with the profession being suckered into thinking that the PSNC actually is against this. The multiples are salivating at being granted LIFETIME MONOPOLIES in the supply of pharmaceutical care.

Harry Tolly, Pharmacist

35 % voted down to my comment above. Wonder who they are ? :-)

Alan Whitemann, Communications

They are nobodies Harry. Take no notice!

Paul Mayberry, Community pharmacist

Has nobody pointed out to the DoH that now that THEIR 100hr contracts have been stopped no new pharmacies can open close to an existing pharmacy so further clustering can't happen regardless of what happens to the establishment payment. Clustering only occured because of their ill thought out policy of allowing 100hr contracts after the OFT report not because of establishment payments.

Philip Caton, Community pharmacist

Absolutely Right!!! And the Tories took too long to close the loophole so I've got one in my town now. If there's any justice it should be last in first out.. We've been here since 1899! Go figure....as the Americans say!!

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