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GPhC and CMA warn pharmacies against profiteering from COVID-19

A “small minority” of pharmacies are seeking to profit from the pandemic, the GPhC and CMA said
A “small minority” of pharmacies are seeking to profit from the pandemic, the GPhC and CMA said

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.”

8 Comments
Question: 
What are your thoughts on the message in this letter?

Brian Plainer, Locum pharmacist

But it's ok for GPhC to bang up premises registration fees by 40% - what a duplicitous joke!

Sean Whelan, Information Technology

Retail price regulations were always in force until the 'big boys' of pharmacy pushed to allow promotions on medicines and effectively contribute to the lowering of retail prices of OTC medicines. The fact that this has now gone in reverse and has allowed pharmacies (and others) to sell Calpol at £20 a bottle and suddenly the CMA is up in arms. Whilst I think it is the underhand and there is no excuse for it, the CMA have got what they asked for.....

In addition, I think this is nothing to do with the GPhC remit....

Michael Mustoe, Community pharmacist

There is little or no doubt that Pharmacy, and, in particular, Community Pharmacy, has been amazing through the pandemic. Patient focused and service beyond the norm. Really really great, and Pharmacists using all the tools at their disposal to help their patients
Just deal with the, no doubt, small number of idiots who let the vast majority down. But don't tar us all with that 'brush'!!!

Watto 59, Community pharmacist

GPhC should refrain from comment.  If I want to sell Calpol at £19.99 a bottle I will suffer the ill will and bad PR that would accompany it, though I would defend in gereral the right to do so .  A member of my staff was spat at for selling a bottle of paracetamol liquid for under £3 when the wholesale price had rocketed in early April so I would tread carefully in any case.  The audacity of GPhC is staggering considering their extraordinary proposal to extortionately increase the already unreasonably high registration fees. 

Soon-To-Be Ex-Pharmacist, Superintendent Pharmacist

Why are pharmacies being singled out for this? Supply and demand is a mainstay of retail.

Chris Locum, Locum pharmacist

Community pharmacy is at the end of the chain and is not the instigator. Sure, a small number may have acted less than gracefully but is this a surprise?

Advance funding is not a gift. Teams might have well donated their blood, bone marrow, along with stress, tiredness and abuse. What kind of  'price' is this to pay that the GPhc has absolutely no interest or concern?

The central government neither understands nor appreciates what we do.

They view ANY profit on dispensing as uncovenanted. While there is certainly enough of it historically, the present state of affairs will mean fewer pharmacies on the high street to bully.

Greatly Pedantic and Highly Clueless, Senior Management

Shame the CMA didn't get off their ring sooner and investigate the ramp up in prices in phenytoin, diltiazem, carbimazole etc. Still, go after the small fry when the bigger sharks might bite back. 

On Break, Community pharmacist

I hope they have looked at this through the whole supply chain. There are many other products that have gone up in price including ibuprofen, paracetamol and aspirin. Most pharmacies will/should add their normal markup on these products.  Unfortunately this makes them double the price in some cases as the trade price has more than doubled, which is not the pharmacies fault but I can see why customers are unhappy.  

At some point regulators, the public and the NHS need to understand that as a business we have to make a profit on our goods and services. We could not absorb the elevated trade price. Im not making excuses for the minority who are being investigated.

 

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