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Lawyers: Sector could legally challenge government cuts

Noel Wardle: Four areas where sector could challenge government

Several contractors have contacted healthcare lawyer Noel Wardle for advice on the legality of the funding cuts

Pharmacists could legally challenge the government over its cuts to pharmacy funding, leading lawyers have advised.

The sector has grounds to bring a judicial review against the government, but needs to act quickly if it wants the best chance of success, according to healthcare lawyer Noel Wardle, partner at law firm Charles Russell Speechlys.

There are four areas in which the sector could challenge the government through the High Court, Mr Wardle said:

  1. Whether the government is engaged in a genuine consultation over the extent of the cuts, or whether it has already made up its mind to reduce funding by 6% in October
  2. Whether the proposed new global sum of £2.63 billion will provide "fair and reasonable remuneration" for contractors
  3. Whether the government decided that hub-and-spoke dispensing will help contractors survive the cuts before it has consulted on whether the model will work for independents
  4. Whether funding cuts are an "appropriate tool" to reduce the number of pharmacies in England.

"Individually, they are all appropriate concerns to be raised. Cumulatively, I think they suggest that what’s happening is arguably unlawful," Mr Wardle told C+D.

Pharmacists should act "now" if they want the best chance of success in any legal action, he said. The government plans to announce its final plans for pharmacy funding in April, and after that it will be "much harder" to take action, he stressed.

"Now is the time to do it. It isn't a situation that is going to get better the longer it's left," he said.

Interest across the sector

A single contractor could challenge the government, but "ideally" any legal action would involve a representative body for the sector, Mr Wardle said. "[PSNC] would be the obvious person to pursue [it]," he said.

There has been a "lot of interest" from the sector on the issue of legal proceedings, Mr Wardle said. "I have been approached by many people, from [smaller] multiples to individuals. They have expressed significant concern about what could be done [about the cuts]," he said.

Mr Wardle has not been instructed by anyone in the sector to pursue legal action, he added.

David Reissner backs action

Mr Wardle's comments followed those of his colleague David Reissner, who last week said there is "some scope" to legally challenge the funding cut.

The government could not do “whatever the hell it likes”, Mr Reissner told the Sigma conference in Jamaica last week (February 16).

“There is an issue about whether the consultation is a genuine one because everything that’s coming across at the moment is that [Jeremy Hunt] has already decided what he’s going to do,” said Mr Reissner, senior healthcare partner at Charles Russell Speechlys.

A High Court judge would have powers to rule on whether pharmacy funding had been decided fairly, but would not be able to decide the appropriate level of remuneration, Mr Reissner added.

 

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35 Comments

Aryan Butt,

What I found distasteful about pharmacy2u is some of their mailshots that I have seen are a bit misleading and could confuse members of the public 

M Yang, Community pharmacist

Their mailshots were made to look like official documents, which fooled a great many people into thinking they had to switch their pharmacy and have their prescriptions sent to pharmacy2u.

Sajid khan, Community pharmacist

The biggest failure in this whole saga has been the PSNC, a toothless organisation. Surely Sue Sharpe and rest of the team cannot have been that naive to know of what was to come.

We should definitely opt for a judicial review and also attempt some lobbying.

The Multiples seem to have kept quite on this so far, has a back door agreement been reached with them to protect their purses.....

Farm Assistant, Community pharmacist

I wonder who let Mr P know in advance so that he could offload Boots? This has to be one of the most corrupt countries in the world.

Aryan Butt,

 

Having given the matter of judicial review some thought I am coming to the conclusion that it would most likely be a futile exercise. The govt has the power to amend statute to suit its purpose. Even if such an action was successful it would merely delay the inevitable. Some might thing that any respite is positive but then what if the government decides to say make deeper than six per cent.

 

In a time of austerity I don’t have issue with some cuts. You can hardly say pharmacy is being singled out. What I have issue with is the way it is being done. It seems someone has just decided they want to reduce funding by some £170 million and not based on reason rational or indeed evidence based. I mean what evidence is there that the internet is cheaper after all I don’t see pharmacy2u the leaders in this model posting profits. I can’t see taking into account postage how that could be made to work. Internet penetration may be higher say in America but there the public have to pay for medicines. Has the hub and spoke model really been piloted and positive results seen? 

M Yang, Community pharmacist

With all due respect, Pharmacy2u was placed under investigation and found to have carried out shady activities, including selling patient data. Not to mention failure to deliver medication to 5000 or so patients. The precedence we have for internet pharmacy is not a good one. Boots, the biggest multiple in this country, is now hesitant about hub & spoke and questions are being raised about how profitable or cost effective it can be across the sector. This won't be the only judicial review we have (junior doctors) and the publicity generated by it could be more potent than the review itself.  The current government is being assailed on all sides and hasn't got long left before election time.

A Hussain, Senior Management

I see that the BMA have shown their intent by launching a Judicial Review into the governments action over the imposition of the junior doctor contract.  How brave is pharmacy?

Hemant Patel, Community pharmacist

Are they just slightly ahead of us? There is a process before loading the gun: persuasion, political pressure and then in desperation, bang! Once the trigger is pulled you will feel the recoil before you see the result. JR does not guarantee success, does it? But, I'm sure PSNC lawyers earning a pretty penny would advise on the matter of law. 

A Hussain, Senior Management

You're correct and I'm sure that the government will have the best lawyers OUR money can buy.  I just feel (hope) that they have been so cock sure that they have not followed due process in trying to achieve what in all honesty a very unsavoury outcome.  Maybe even the threat of JR will ensure that they take us more seriously, which may mean that we fare better in the future.

Philip Caton, Community pharmacist

Dear Mr Wardle,

As a Charles Russell client myself I have no doubt your firm are the right ones to lead a legal challenge. However, as a single independent my company could not afford to take the Government on. How about letting us all know how much you think such a challenge is likely to cost and then we can discuss as a profession whether that is affordable, if we act collectively. The more pharmacies that sign up the less each will have to contribute. Obviously multiples would be expected to contribute in proportion to the number of branches.

Dear Pharmacists,

Surely this approach would be more effective than a strike which would play right into the governments hands. Come on fellow pharmacists just for once unite and do something collectively. 

Noel Wardle, Senior Management

Philip.  We can't respond in an open forum, but anyone who wants to discuss the suggestion privately is welcome to email [email protected]

Hemant Patel, Community pharmacist

I'm not privy to PSNC's thinking but I would be gobsmacked if they are not considering this. I guess the management process is about discussion and persuasion, then applying political,pressure and then eventually the reluctant last choice of a court action. But, even if you win the legal battle, the war might not be won so need to adjust the signal steps. There is still time. Do not be panicked and keep considering the options. I wonder whether a representative action on behalf of the contractors by a small loss making or low profit pharmacy might get legal aid. Not sure but worth exploring.

 

Marc Borson, Community pharmacist

Hemant please can you expand on your comment about unconvenated profits. I believe this is the crux of the matter and the government are simply tied of so called professionals being untrustworthy.

On another note the criminal law association just won their battle with MoJ on contract closures and funding cuts via legal challenge.

Each pharmacy group should conduct their own separate challenge

 

Hemant Patel, Community pharmacist

Uncovenated profits are simply those over and above the agreed margin which is negotiated each year. It is alleged that Some of these are clawed back but some parts of the system are able to protect them by using devices. I never understood this stuff but like to think I know a thing or two about professional services.

 

Aryan Butt,

I cant see how it is a consultation on the level of funding. The decision that there is to be a cut has been made the only consultation as per doh letter is on how they are to be made.

Would be interested as to reasons why the PSNC are not challenging it.

Hemant Patel, Community pharmacist

Perhaps not. A department that looks after medicine, pharmacy, dentistry, and opthamics is asked to save money by the treasury. Where the axe falls is entirely in the hands of the Sec  of State and his ministers. Do not listen to those who could be seen to be speaking on behalf of the minister or are simply quoting without questioning what the civil servants are saying. That is their BLOODY job and they are doing it well because we have people who accept readily what they are being told. Negotiation is about playing poker and bluffing to a certain extent. Negotiation is a matter of questioning and reflecting to guess a probable position beyond which it would not be helpful to push. So far, there has been no perceptible push from RPS. I do not agree with PSNC like RPS does with DH but those who underestimate PSNC's will to fight when pressed in a corner will be surprised. PSNC is fighting for its life. I am surprised people have not picked that up. But, Keith will win on the question of a new contractual framework. No evolution, just a Big Bang.

Marc Borson, Community pharmacist

Hemant our customer is the Nhs Doh like you say negotiation is the key, we can convince  our customer that we offer better value on health care distribution than alternative forms, we just need to prove it with an acceptable scientific study. It's our duty to save the Nhs money by making sure they do not head down the wrong road. Which is what they are about to do.

Harry Tolly, Pharmacist

They are protecting the multiples.

A Hussain, Senior Management

Nice of them to offer.  Mates rates please!! Joking aside, I hope that something can be done.  Judicial Review is all about whether a correct process has been followed to arrive at a desired result.  How can this process be correct in any way, shape or form as they don't even have a clue what the results will be?

Harry Tolly, Pharmacist

Spot On. If the Government wants the market to decide who lives and who dies than the distribution of the Global Sum has to be fairly spread out and then its down to the best businessmen to win. The multiples know they would not have a chance in hell and thus they WILL ENSURE that their lackeys in the PSNC agree to a distribution model that kills of small independents and leaves the multiples with NHS monopolies in every town (many are already !)

Umi Mistry, Community pharmacist

Lawyers will get their cut not sure how much we will benefit

Hemant Patel, Community pharmacist

Sure, but what if they get what they deserve and we get a better deal? I see a glass half full.

I personally believe that we must try everything including a legal challenge to show our distress. We have worked hard to make the profession more clinically based and we are still the final check to make the medicine we dispense safer for the patient. After opening the contract to supermarkets to then say 3000 should close and probably independents - we have  leases, employment contracts, suppliers, computer support and these are all put at risk. I would like to set up a social enterprise model for my staff as I am due to retire. All my shops fall into the at risk category. I feel over the years I have done everything I can for the profession- and this is my reward!!!

 

I personally believe that we must try everything including a legal challenge to show our distress. We have worked hard to make the profession more clinically based and we are still the final check to make the medicine we dispense safer for the patient. After opening the contract to supermarkets to then say 3000 should close and probably independents - we have  leases, employment contracts, suppliers, computer support and these are all put at risk. I would like to set up a social enterprise model for my staff as I am due to retire. All my shops fall into the at risk category. I feel over the years I have done everything I can for the profession- and this is my reward!!!

 

Hemant Patel, Community pharmacist

This is a powerful voice and it saddens me to read the ending. There has to be a glorious scenario provided we do not go down the route of you lose, I win. DH/NHS humiliated PSNC and in the process the profession. But, whilst disagreeing strongly with the comments about 'Treasury wants the money' and Minister's hands are tied, we need to find a way to work with the Minister and Keith. That means viable solution taking account of the political and financial reality on both sides.  Patricia, you may have done everything for the profession and you did more for the community. The sense of betrayal therefore is totally justified but whilst the burden falls on you, you are not resposnibile got the system. Those who designed the system of living on uncovenated profits (some call it thieving) have a lot to answer for. I am concerned about the axe falling and the slow bleeding but my gut feel is that pharmacists are survivors and will find a way to adapt and prosper again. Believe!

 

C A, Community pharmacist

I was working in a Well pharmacy the other day and on the wall it said they employ nearly 8000 people... and that chain is what 800 odd shops? Imagine the impact closing 3000 shops would have on so many people and families?

Harry Tolly, Pharmacist

I have posted on numerous occasions that what the Gov has proposed needs to go to Judicial Review. The BIGGEST grounds for this is that there is no impact assessment and that certain demographics within pharmacists are affected more than others. This is blatant and illegal.

 

The distribution of the Global Sum CANNOT be carved up in private as it has been in the past as there is a public interest in ensuring that those vertically integrated multiples that pay virtually the same level of Corporation Tax as a small contractor are not allowed to cream NHS funds away.

Hemant Patel, Community pharmacist

Could legal action include failure to consult the employees and contractors? Should the employees be consulted? The DH proposals are not about 6% and distribution of monies. More serious is the re-positioning of community pharmacy and creation of a surgery based pharmacy workforce (which is not necessarily a threat). The contractors would need to rely more on employees pharmacists knowledge, skills and ability to build and maintain relationships with the communities. A lot of the comments are based on past relationships. The future will be different with greater respect, recognition and reward for the income generators and relationship builders. More of that a bit later. We must look at the opportunities for liberating the profession from an outdated model to a new model. 

 

 

 

 

Harry Tolly, Pharmacist

The matter is much simpler for legal proceedings. This policy, clearly stated by a minister, that the cuts will lead to pharmacy closures, has an impact. Thus, an impact assessment MUST be conducted and must be placed in the public domain. This has clearly not been done. The grounds for a Judicial Review are clear.

Hemant Patel, Community pharmacist

Agreed and in any consultation the right people need to be consulted so we are agreeing that both need to happen.

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