Judge dismisses High Court pharmacy funding cut cases

The judicial review took place in the Royal Courts of Justice from March 21-23
The judicial review took place in the Royal Courts of Justice from March 21-23

The National Pharmacy Association's (NPA) and the Pharmaceutical Services Negotiating Committee's (PSNC) cases against the funding cuts have been dismissed "with regret" by a High Court judge.

Judge Justice Collins said he could “not properly quash the decision” made by the Department of Health (DH) to cut pharmacy funding in England, in his judgment handed down this morning (May 18).

He recognised that “cuts of this nature will inevitably produce some hardships for individual pharmacies”. “But that cannot mean in times of…need for some retrenchment, no cuts can be made.”

However, he did “not doubt” that some criticism of the DH could be made, as “different means might have been better”.

Free deliveries "may have to cease"

Justice Collins recognised the evidence presented by the NPA and PSNC suggests there is a “real risk” there will be “less access because of the inability to keep some pharmacies open for as many hours”. He gave the example of free delivery services, which he admitted may “have to cease”.

“The concern that there will be pressures on GPs in deprived areas – where they are scarcer – and on A&E units in hospitals is a real one,” he said.

DH gave cuts “careful consideration”

However, the DH had produced evidence which showed it had given “detailed and careful consideration” to the way in which the cuts were made, Justice Collins stressed.

He stressed, however, that there had been a “significant” lack of disclosure by the DH of the materials it used to make its funding cut proposals.

Mr Justice Collins added that it was “unfortunate” that the goodwill that had existed between PSNC and the DH “has been lost”.

“Industry insider”

The judge also made reference to the “industry insider”, who provided information about pharmacies’ typical profits in a 2015 meeting with the DH. “The small number of companies involved and the nature of the available data made this exercise less than satisfactory,” he said.

PSNC response

Chief executive Sue Sharpe said the negotiator is “disappointed with this result”.

“Our lawyers felt that we had a good case, and there are serious criticisms of the consultation process and of [how] the Department of Health (DH) made…the judgment.”

“Unfortunately, the fact that the secretary of state has very wide powers to decide what is relevant to his decisions – coupled with the DH withdrawing reliance on analysis they had undertaken – means that we failed to establish that the inadequacies in the process were sufficient to make the process unlawful,” she added.

NPA response

NPA chair Ian Strachan said the judgment “recognises the important role of community pharmacy in primary care, which some ministers and officials have sought to diminish”.

“We have also established an important legal principle, namely that the health secretary must now have serious regard to the duty to reduce health inequalities when making decisions about the NHS.

“This is a watershed moment for pharmacy policy,” Mr Strachan said. “The flaws in the current Treasury-led approach have been exposed. We can now focus on changing the direction of policy going forward, and put the matter of the current funding settlement in its proper context.”

“The new government returned after the general election should seize this opportunity to change course.”

Read the full judgment here.

The Twitter reaction

The pharmacy funding cuts in court: what happened?

The judicial review unfolded in the High Court – located in the Royal Courts of Justice in London – from March 21-23. C+D's live coverage of the three-day hearing can be viewed here.

Who were the key players?

Alison Foster QC made her case for the Pharmaceutical Services Negotiating Committee (PSNC) on the grounds that the secretary of state had not carried out a lawful consultation on the cuts to pharmacy funding in England – which came into effect in December 2016.

David Lock QC argued for the National Pharmacy Association (NPA) that the government had not considered the effect the cuts would have on the disabled, the elderly and those from black and ethnic minority communities.

James Eadie QC, the first treasury counsel (common law), defended the Department of Health (DH) by arguing that the case put forward by the NPA and PSNC was “without merit”.

The Hon. Mr Justice Collins presided over the case.

What did we learn during the hearing?

  • Chancellor Philip Hammond reassured a reluctant Theresa May that the pharmacy funding cuts were necessary, in a letter sent to the prime minister in August 2016.
  • An unknown industry insider told DH officials that some pharmacies were making “40-60% private income on top of NHS income” in a 2015 meeting, revealed in a heavily redacted 53-page document.
  • The DH's lawyer James Eadie told the court that pharmacy staff “do shampoo” and stressed that “Boots in Waterloo sells sandwiches”.
  • PSNC’s lawyer described the government’s plans for community pharmacy as calculated on the back of a “ministerial fag packet”.
  • In 2015, the DH created a list of 10 areas it predicted would be most affected by the funding cuts.
  • Health secretary Jeremy Hunt was warned by the DH in September 2015 that he "should not underestimate" resistance from pharmacists to the funding cuts.
  • The DH acknowledged in an unpublished impact assessment that pharmacy closures would have a “greater detrimental effect” on patients with “protected characteristics”.
38 Comments
Question: 
What do you make of the outcome?

S J- Locum, Locum pharmacist

Great News

Chris Pharmacist, Community pharmacist

What will happen with the govt cuts is that contractors and multiples will continue to profit but staffing will be dramatically cut with possibly the end of supervision of every pharmacy by a pharmacist and the growth of hubs and amazon-style dispensing factories...

...contractor profits will be maintained, excessive profits will still be made if govt changes legislation to permit it. With regards to the growth of enhanced/advanced services to compensate - forget it. Pharmacies will close losing the network of local pharmacies permitting patient contact and the provision of services and even if this were not true, the money isn't there...GPs will continue to control funding to their own favour protecting loss of GP controlled services (and income) despite being overburdened. 

Only the collapse of the NHS with the growth of private healthcare and the concept of patients paying themselves for services (therefore potential sources of income away from the GP controlled NHS) can save community pharmacy as it exists now.

Tom Kennedy, Pharmacy Area manager/ Operations Manager

I've been telling pharmacists for years that we just can't afford to give them more staff even if it's a safety concern, the money just isn't there.  Now they've made the cuts and we're still hugely profitable, I just hope none of them question where all that money has been going for the past decade. 

S J- Locum, Locum pharmacist

Plus out of staffs and locums wage CUTS STRAIGHT into their pockets  Massive profits they have made from the NHS and still will  IT'S PAYBACK?

Sue Per, Locum pharmacist

In your job, you have to speak with a forked tongue., but, when off, speak the truth. All the evidence points to good profits, but the contractors will deny, and the only time when they will be caught with their pants down, is when the DOH makes deep cuts, and pharmacies start shutting down. The DOH needs to deliver the same treatment, that the contractors have delivered to their Employees and Locums for the past decade. DOH, claw back all the excess payments as fast as you can with a single swipe of the sword.We have been through the rough treatment, and know how painful it is., and the contractors, mainly the multiples need to get a taste of the same!!!

 

 

 

 

    

Sau Sheung Yuen, Pharmacy Area manager/ Operations Manager

Pharmacy contractors exist to serve the people, the NHS funds are there for the benefit of the people, not contractors. It is time to develop an income stream which is not dependent on the welfare state. It is useless to cry over this. 

Dave Downham, Manager

Pharmacy contractors do not exist to serve the people, they serve the owners. The NHS uses the contractors to deliver a service that is cheaper and more efficient than what they could deliver themselves, otherwise they would do it themselves. If the money is not there, that service provided will be necessarily diminished.

Sue Per, Locum pharmacist

The facts are that, there is good money, and the sector has enjoyed an increase each year., but the greedy mercenary contractors have refused to pass on these increases to the Employees and Locums, who have helped them to fulfill their contractual obligations, and their coffers. For the past two decades, they have pleaded poverty and mass closures, none of which have matrerialised. The day of reckoning is near, and the DOH needs to slash and burn, until  the contractors, mainly multiples, start closing their sweat shops, and new innovative " New image pharmacy" individually owned, emerge. 

 

lucas perez, Student

i pity the folk that qualify in august, all 3000+ will have to deal this...I think this is just the begining. Multiples will not be affected as much as the small indepedent as they will have a large pool of locums who will happily work for £15 hr and some for even less than that. 

 

 

Sau Sheung Yuen, Pharmacy Area manager/ Operations Manager

For those of you who don't like my comment, please remember the NHS is not a charity for pharmacy contractors, if you built your business to over-rely on one income stream with a monopoly customer, there are things that will become inevitable. Diversify is the answer.

A M , Retail Management

Sue Per - if you read the judgement, you'll see the 15% was such nonsense that DoH actually dropped it from its evidence. Judge said 'any reliance on 15% is not supportable'

S Morein, Pharmacy Area manager/ Operations Manager

Meanwhile in the real world Pharmacy goodwill values maintain their record highs. So much for contractors at the door of financial ruin....

lucas perez, Student

Open up the market.!!!!!!!!!!! and scrap this cartel we have

Niranjan Patel, Community pharmacist

Time to think now how you will vote in the coming general elections

Sue Per, Locum pharmacist

It does not matter which political party wins.The sad fact is that we have as a country overspent and wasted funds, and now nursing a debt which will soon hit 2T and rising.The NHS and other services on offer by any government will need to contract and/or become efficient and all those engaged will need to account for the quality and value of the delivery of services and there must have a percieved benefit to the recepient. In respect of Pharmacy, I think we have focussed and delivered services in an incorrect way., by running production lines producing MDS's and chasing prescriptions to build up volumes with the main aim of accuring turnover and profits. We should have focusssed on delivery of Clinical services or something similar along those lines. Other than financial gain, what is so rewarding with running Pharmacist led MDS assembly lines. This is best left to a few  regional production hubs,

This simply means that role of the pharmacist has to and will change leading to providing advice and clinical services with the application of acquired knowledge skills and experience.

What is so "Pharmacy" or profesionally rewarding with working in dispensing sweat shops, that most pharmacies have now become ????.

 

lucas perez, Student

The large pool of excess pharmacists/pharmacies will mean the profession is an easy target

Sue Per, Locum pharmacist

The C & D article fails to highlight the evidence that was presented by the DOH., and that is the, companies House Data: which indicated a healthy 15% nett Profit Margin, after all the allged feebies on offer if any. This net margin enjoyed by Phrmacies are enviable, when compared to other businesses those enjoyed by other in the Open Market.One also need to look at the quality of "Pharmacy"service on offer, which would exclude the management of MDS, repeat ordering and collections, as these are not part of the contractual agreements.In a typical "dispensing sweat shop", there is very little time for a  truly professional service as most of the time is taken up dealing with all the non-contracted services, haggling for discounts on purchases, Etc...

This is a wake up call to shed the image of "Glorified Shopkeepr"  and start delivering a truly professional  services, which will be of benefit to the receipent and value to paymaster!!.  

Time to embrace the advanced and enhanced services, and innovate more though PGD's!!

 

 

Looking from different angle, the simple question to ask is  what is the quality input

Dave Downham, Manager

There is no reliable Companies House data that supports 15% net margin.

S Morein, Pharmacy Area manager/ Operations Manager

Absolutely correct. The stratospheric levels of goodwill paid for contracts is irrefutible evidence of the excessive profits generated by contractors. The NHS is not an organisation to line the pockets of contractors at the expense of funds that could be far better allocated to patient care.

Dave Downham, Manager

No it isn't. 

Sue Per, Locum pharmacist

Holly Crap., where is your supporting evidence!!

lucas perez, Student

agree...open up the market and let pharmacies stand up on own two feet !!!!!!FREEEEEEEEEEEEEDOM from the abusive multiples!!!!!!!!

Simon MEDLEY, Community pharmacist

stop then free delivery and see your rx's migrate to P2u... at the moment is still just viable to deliver, but if they cut deeper and min wage goes up, then it could all change

 

Duncan Livingstone, Industrial pharmacist

I think a plsin English synopsis would be "the Govt are ignorant and morally bankrupt. They know the price of everything and the value of nothing. Regrettably they have the legal right to make these damaging changes

Pharma Tron , Community pharmacist

Any victory was to be a pyrrhic one anyway... I'll say it again, profit= goodwill= pension. Redistributing the network of Pharmacists into GP land, employed by GPs will surely add to the pension burden of the public purse anyway. Am I right? What a stupid pointless exercise by the government, which will have untold consequence; not least making us take a backwards step in what we offer and therefore a less comprehensive and more unprofessional service. But onwards and upwards, we can only have expected this outcome, surely? 

Gerry Diamond, Primary care pharmacist

Not a surprise, have watched community pharmacy funding reduced by stealth over the past 30 years, blacklist, claw backs, barriers to entry, new contract, dispensing fees stratification, and all comes to nothing. Stop blister packs, free deliveries, and care homes what a shower of s......, Good luck

Seal Patel, Community pharmacist

I think its the right decision, pharmacies will still turn a profit. But they will have to cut back on free services, like deliveries and trays for patients. 

We have nobody but ourselves to blame, also how much of my fee is going to the lawyers for this case?

 

N O, Pharmaceutical Adviser

Time to apply for new licenses and change the name of the Pharmacy to xyz Pharmacy, Bar & Restaurant, Snack Bar, General Store and news agent and One Stop Shop for all your needs ..... Please visit us and we will be able to help with your Health Needs, provided you make atleast £XXX worth of purchase, since the Govt can't support !!!

Benjamin Leon D'Montigny, Non Pharmacist Branch Manager

It was almost certain that challenging the cuts legally in this way was always going to turn out with this decision, even a successful appeal would have resulted, as quite rightly said, a stay of execution.

I do think however, the NHS provides a lot of value for the individual patient, often unbeknownst to them. I'd like to personally create a more open environment where the patient can see exactly how much their treatments have cost, if only to provide some enlightenment. Basic idea, put drug prices on prescriptions or yearly invoices with "Paid for by the NHS" at the bottom.

If even argue that pharmacy can still make a load of savings. For example, generic only prescribing, deleting and removing more zealously medicines with limited therapeutic benefit, and blacklist any OTC medications such as paracetamol and aspirin. 

Meera Sharma, Community pharmacist

I think main learn from this - stop all the free stuff! As pharmacists, why should you keep doing things for free when no one is appreciating it. Charges for deliveries, MDS and do away with repeat prescription management. Balance your business with activities that are being paid for, these are good but there's no value or appreciation. Equally, most of these activities will come under scrutiny when medicines waste get looked at - so pre-empt it.

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