DoH Consultation: Market entry - our response

Department of Health Consultation: Market entry by means of pharmaceutical needs assessments and quality and performance.

Introduction

Numark is a symbol group that provides professional and commercial support to the independent community pharmacy sector. We have in voluntary membership the owners of 2700 pharmacies in the UK.

Numark's role is to work with its members to develop profitable and sustainable independent pharmacies that deliver exceptional standards of care to local communities. It does this by:

• Providing leadership and support for independent community pharmacy
• Securing strong commercial terms on all aspects of pharmacy business
• Providing learning and development for pharmacy teams
• Equipping pharmacists with the tools and knowledge to deliver services which enhance patient loyalty and customer experience
• Promoting and providing a brand for independent pharmacy

Numark welcomes the Department of Health's proposals to update the market entry regulations. We are pleased to have the opportunity to respond to this consultation.

Confidentiality of information

We agree that our response to this consultation may be shared and published.

General comments

The current regulations, whilst working reasonably well to control entry on to the pharmaceutical list (although the exemptions - particularly the 100 hour exemption - are  seriously  undermining this proposition) - they are not sufficiently  conducive to encouraging additional improvement to meet the needs of a local population.

Having said this, whilst innovation and competition should be encouraged, existing contractors must be afforded a level of confidence to invest in their premises and people.

The proposals to replace the current "control of entry" system with one based on the needs or improvements identified in a Pharmaceutical Needs Assessment (PNAs) are in principle, good ones. However, concerns for the robustness of PNAs need to be raised. There is no definition of a PNA which in itself presents difficulties in its interpretation for PCTs and contractors.

Our experience of PNAs is that there is considerable variability across PCTs on the quality, accuracy and relevance of the information contained within them. Since their publication, there have been very few, if any, situations where PNAs have identified pharmaceutical services which are required over and above what has already been commissioned. This does not provide us with much confidence and thus we request that this is addressed as a matter of urgency.

The capacity and capability of PCTs to administer PNAs given the reforms that are taking place in the NHS is a concern to us. We request that there is sufficient guidance to support PCTs in implementing the new system that is transparent and consistent until the transfer of undertaking to the NHS Commissioning Board is made.

The newly formed Health and Wellbeing Boards will be instrumental in the development and improvement of PNAs which must be integrated into their overall Joint Strategic Needs Assessments (JSNAs).

Whilst there is a need to drive the quality and standards of pharmaceutical services such that patient safety is assured, we request that the new powers given to PCTs to deal with poor performance is fair and proportionate.

PCTs must communicate and co-operate with contractors to address poor performance before sanctions are imposed. And affected contractors must be given support and sufficient time to embrace and implement any identified areas of improvement. 

We are aware that there has been a rush of new applications for 100 hour pharmacies during this consultation period. This further puts strain on existing contractors and on PCT resource. As such we request that the Department seriously considers an interim measure to counter act these applications whilst it considers its recommendations.

Response to consultation questions

Q1 Do you agree the draft regulations enable market entry to be based on identification of current and future needs?

Yes

In principle, we agree to the new market entry test to be based on PNAs. Our concern however, is the robustness of PNAs as historically these have been prepared by PCTs in a substandard and inconsistent manner and have not identified pharmaceutical needs.

Pharmacists have considerable skills in medicines optimisation, management of long term conditions and in public health. These have not been utilised by PCTs in considering the needs of the local population and in the commissioning of new services.

Q2 Are there any other matters which you feel need to be included in or omitted from the draft regulations which deal with applications based on current or future needs?

Yes

We request that the new regulations state that the Health and Wellbeing Boards, who take over PCTs in the development and delivery of PNAs, must integrate the PNAs into the JSNAs. We also request that commissioners give serious commitment to commissioning new services which is fairly funded where a need has been identified.

Q3 Do you agree the draft regulations that enable market entry in respect of applications offering to meet identified "current or future improvements" or "better access to pharmaceutical services" are applied?

Yes

Q4 Are there any other matters which you feel need to be included in or omitted from the draft regulations which deal with applications for "current or future improvements "or "better access to pharmaceutical services"?

No

Q5 Do you agree with the draft regulations that enable market entry in respect of "unforeseen benefits"?

Yes

In principle, we agree that there may be a need for a degree of flexibility in the market entry test to accommodate for "unforeseen benefits" which the PNA has not identified. (This is only acceptable if the PNA has been shown to be robust).

However, this needs to be clearly defined and consistently adopted and not be left to the discretion of PCTs. The needs of patients must be at the heart of the decision.  Existing contractors should be given the opportunity to be invited to provide for this unforeseen need. We would not wish to see this flexibility of approach to create a loophole within the new system.

The consultation document states that to be granted, any application should confer "significant benefits" to the local population.  PCTs will need detailed guidance on what constitutes "significant benefit" to ensure that affected applications are granted in the spirit intended - in extremis.

Q6 Are there any other matters which you feel need to be included in or omitted from the draft regulations dealing with "unforeseen benefits"?

No

Q7 Do the draft regulations provide a solution to the current difficulties dispensing appliance contractors (DACs) are facing in applying for entry to a PCT's pharmaceutical list?

We have no response to this question.

Q8 Do they provide an appropriate balance between enabling an improvement in the provision of appliances to patients whilst ensuring the NHS does not incur additional costs for little or no perceived benefit?

We have no response to this question.

Q9 Do you agree with all the proposed exceptions to the new market entry test listed in paragraph 1 of chapter 5? If not, please tell us which types of application should be excepted from the new market entry test and the reasons why.

No

From the list of six types of excepted applications, the only one we do not agree with is the distance-selling pharmacies. This type of application should be subject to the new market entry test.

The consultation document states (Chapter 5, paragraph 6) that the new market entry test will not apply to distance-selling pharmacies because applications for such pharmacies can "face obstacles in proving a need for their services within a locality".  Their inability to prove a need suggests they are not needed. 

It is contradictory and illogical therefore to continue with this exemption which cuts across the fundamental principle of market entry based on a pharmaceutical needs assessment.

Q10 Do you agree that distance-selling applications should not be subject to the new market entry test?

No

We do not agree that distance-selling pharmacies should be excepted from the new market entry test. We do not believe that these pharmacies would address a pharmaceutical need that the existing pharmacy network could not provide.

In addition, many existing pharmacies offer some level of distance-selling as part of their offering.  It would still be open for a distance selling applicant to apply for a contract and in doing this, in keeping with other applicants, to make the case for why it is needed.

Q11 Under the current 2005 regulations, an application for one of the four exemptions is refused if the neighbourhood in which the premises will be located is designated for LPS. Do you consider PCTs should continue to have the safeguard of being able to refuse distance-selling premises applications in an area where there is a LPS designation?

No - see responses to Q9 and Q10

As the consultation points out, LPS are "protected" to allow time for a proposal to be worked up and procured.  LPS are a useful model for trying new approaches to services and therefore an important component of innovation. 

We have already said that we do not believe the distance selling exemption should continue.  But even if it does, it should not be allowed to apply in areas designated as LPS.

Q12 Will the introduction of a "no significant change relocation" make relocating or administering relocations of pharmacy premises within a PCT's area easier than the current "minor relocations" provisions?

Yes

In principle, an application for relocation which does not involve a significant change to pharmaceutical service provision should be granted without the need to apply the new market entry test. However, we would want more clarity on what the criteria will be for approving these applications to ensure that leapfrogging of contracts does not happen.

Q13 Are the conditions relating to "no significant change" applications clear? Do you have any comments about the new "no significant change or detriment" test?

No

We agree that the new market test should not apply to relocations that do not result in "significant change" to pharmaceutical services provision.  The concept of "significant change" is something that has been a factor of the guidance on minor relocations since control of entry was introduced in 1987. 

However PCTs will need detailed national guidance on what is meant by "significant change" to assist them in determining applications.

Q14 Do you consider the notifications and appeals procedures in the draft regulations adequate?

Yes

However, we would like to address the issue of speculative applications with recommendation to shorten the time in which pharmacies must open.

Q15 Do you consider the notification and appeal procedures in draft Schedules 2 and 3 clear?

No

The proposal that objectors will only have a right to appeal against a grant if the PCT decides objectors satisfy complex criteria is unreasonable, unclear and illogical.

Q16 Are the draft regulations sufficiently clear about how and under what criteria PCTs can initiate measures to deal with performance matters for chemist contractors?

No

Although the principle of setting up a new quality and performance regime which provides incentives for contractors to improve and sanctions for PCTs to use for poor performance, is a good one, we wish to raise the following concerns.

From experience, we know that contract monitoring visits performed by PCTs are inconsistent across the country leading to variations in the quality of service delivery. We therefore insist on a national approach which is clear, consistent and objective for PCTs to follow with respect to monitoring and sanctions.

The role of the PCT should be supportive and contractors must be given an opportunity to address any shortcomings before sanctions are prescribed. The right to appeal against a PCT's decision must be unequivocal and not be burdensome for the contractor.

The role of the General Pharmaceutical Council is to regulate pharmacy premises and pharmacy professionals. The duplication of work by PCTs must be avoided. There must be a joined up approach to deal with performance matters.

The use of a third party assessment service like the National Clinical Assessment Service may be more appropriate to ensure consistency and unbiased monitoring.

Q17 Are these proportionate and reasonable?

No

We are concerned with how the performance related sanctions are administered and question the fairness and transparency of the system. PCTs must be issued with clear guidance on what constitutes as failure and what sanctions would apply. There has to be consistency in approach across all PCTs.

We are also concerned with the sanction of withholding payments and how the amounts are determined. We do not agree with using the size of the contractor's NHS business as one of the parameters.  There must be absolute clarity on the powers and limitations given to PCTs.

Q18 The intention of the Advisory Group has been to transfer the 2005 Regulations and amendments agreed by the Group since relating to rural dispensing without any significant change, but taking the opportunity to make the regulations clearer and make some agreed minor modifications. Do you agree with what has been done? If not, please tell us why not.

Yes

Q19 Does the information which accompanies the regulations including the draft guidance adequately clarify the requirements and procedures set out in the draft regulations? If not, please tell us why not.

Yes

Q20 If Ministers were to proceed following consultation, do you have a view on whether the regulations should be implemented by PCTs or the NHS Commissioning Board, subject to Parliamentary process?

Yes

We would wish for the new regulations to be implemented as soon as possible following consultation to end the speculation on market entry. Recognising that the NHS reforms will further see the demise of PCTs as the NHS Commissioning Board is set up, we request that a transitional arrangement is put in place to accommodate this.

Q21 Do you wish to make any other comments outside of the above questions?

No

Q22 Do you have any comments on the draft impact assessment?

Yes

The Department estimates that PCTs will withhold funding from 140 pharmacies a year and delist 72. In addition, it predicts 10 per cent of all contractors will receive a warning. It is not clear how these figures have been derived but we would question the quantum and would appreciate more information on the process used here so as to understand how this impact assessment has been quantified.

Q23 Are there matters not included in the draft equality impact analysis which should be?

No

Conclusion

We welcome the Department's consultation to market entry by means of PNAs and to market exit by means of quality and performance indicators.

With respect to market entry, in principle we agree to the new test based on PNAs. However, we request that there is an obligation by PCTs to ensure that PNAs are accurate, robust and fit for purpose due to the degree of reliance placed on them.

We agree to the removal of the current three exemptions of 100 hour pharmacies, pharmacies at one-stop primary care centres and large retail parks. However we believe that, in addition distance selling pharmacies should be removed from the list of exemptions.

With respect to market exit we request that the new system for dealing with poor performance is clear and transparent for the PCT and the contractor. The contractor must have a right to reply to a PCT's decision before sanctions are prescribed. In short, any procedures or processes adopted should be proportionate and fair and strike the appropriate balance between the needs of pharmacy contractors, PCTs (or their successors) and patients.