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Pharmacy applications dry up after 100-hour exemption scrapped

Business Pharmacy contract applications have slowed dramatically under new control-of-entry rules, as prospective contractors struggle to identify a gap in the market, property and legal experts have reported.

Pharmacy contract applications have slowed dramatically since the government scrapped the 100-hour exemption in September and placed the onus on pharmaceutical needs assessments.

Property and legal experts told C+D that few PCTs had identified an unmet need in the needs assessments for their areas. This had left applicants with little option but to prove they could offer an unforeseen benefit.

Six months on from the change in regulations, the success rate of these applications is yet to be seen. Insiders reported that PCTs had struggled to approve new pharmacies while juggling the demands of the NHS reforms.

Many PNAs, which form the basis of contract application decisions, have identified no gap in services

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Pharmacy brokers Hutchings Consultants said the new system represented a dramatic departure from the old regulations, when the company could see two or three contract applications made in the same area in "a matter of weeks". 

Noel Wardle, partner at law firm Charles Russell, also reported a noticeable drop in applicants compared with levels under the previous control-of-entry rules.

"We've dealt with a few distance-selling applications, but there are fewer new pharmacy applications than previously," he explained. "The applications that we've seen have almost entirely been ‘unforeseen benefits' applications – presumably because there are very few PNAs that identify an unmet need."

Hutchings forecast that the tough environment would continue. "I think that... we will see very few pharmacy applications being approved and those that are will be where there is a real need or benefit perceived for those services," said Hutchings Consultants pharmacy consultant Scott Hayton.

Applications that had been made were still hanging in the balance, Hutchings added, because PCTs faced the "huge strain" of market-entry powers being transferred to the NHS Commissioning Board.

Mr Wardle agreed that applications were "taking a while" under September's regulations and he had yet to hear of a PCT making a decision.

Brokerage group Christie+Co stressed that concrete applications would still stand a chance. "We anticipate that genuine applications will be successful but applications from those seeking to challenge the new regulations and looking for chinks in the wording may not be," argued Christie+Co director and head of pharmacy advisory services Matthew Williamson.

Control-of-entry regulations changed on September 1 last year, after the government scrapped the 100-hour exemption and put a new onus on PNAs. To open a pharmacy successfully, applicants must now demonstrate that they will address an unmet need identified in the PNA or provide unforeseen benefits not anticipated at the time of the assessment.

At the time, the changes were widely welcomed by pharmacy because, pharmacists and MPs argued, 100-hour pharmacies had flooded the market.

What do you make of the new control-of-entry rules?

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A.S. Singh, Community pharmacist

Thats like saying ice melted in the sun after it was left there. Fairly obvious really. 100 hours have damaged or killed a lot of pharmacy businesses. The good news is that, from my calculations about 7000-8000 items a month would have to be dispensed to stay in business or have very deep pockets

Kevin Hope, Pharmacist Director

Great news, also like to see a few more closed too, bet most don't have Pharmacists present for the 100 hours, hasn't affected Wales though Globall sum available will affective grow with their demise :-))

Tom Jerry, Community pharmacist

I think they should just make it a free for all that will really clear up the money grabers from the professionals and get pharmacy set in the right brave Mr Cameron abolish the application process and see the economy pick

Kevin Hope, Pharmacist Director

Tom Jerry we have been through that process or have you forgotten may be you're too young!!
There was a time pre 1986 when there were Pharmacies in the backrooms of most corner shops, the government at the time made a decision and paid these "Pharmacies'" money to close, they were not financially viable and the extra work for the Health Boards at the time just wasted NHS money policing them. What would be the point of a backward step for Pharmacy?

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