3. Potential effects of the OFT proposals
for deregulation of pharmacies
7. The OFT report focused on consumer access (both
geographical accessibility and opening hours), prices of over-the-counter
(OTC) medicines (encompassing both pharmacy-only (P) medicines,
and general sales list (GSL) medicines[9]),
and also the cost of implementing the current regulations.
8. We received a large number of submissions, from
a broad spectrum of interested parties ranging from the Patients'
Association through organisations representing Community Pharmacists
to large pharmacy chains, which were highly critical of the recommended
deregulation of pharmacies. In the main, supermarkets have responded
positively to the recommendations of the OFT, but only one company,
ASDA, fully endorsed the proposals of the OFT report.
9. One of the key criticisms of the OFT analysis
and proposals is that they are based on issues of competition
but that they neglect the healthcare perspective. Several critics
argued that it was inappropriate to treat pharmacy provision in
the same manner as any other retail sector, as community pharmacies
are part of the provision of healthcare through the NHS, and as
such, fulfil a public service function.[10]
As the British Medical Association put it:
Other commercial outlets do not rely on 80% of their
income flowing from what is, essentially, a state-funded public
service. They do not educate the public and improve their health.
Neither do they work with members of the local primary health
care team to ensure the effective co-ordination of services to
patients.[11]
10. This view was echoed by several witnesses at
our oral evidence session.[12]
11. Much of the debate generated by the OFT recommendation
to scrap the control of entry regulations for pharmacies hinges
on predictions about their likely impact on the structure of the
pharmacy market. The OFT argued that deregulation would provide:
· Savings for
consumers of £25-£30 million per annum (around £20-25
million on P-[Pharmacy-only] medicines, and a further £5
million on GSL [General Sales List] medicines).[13]
· Savings for
taxpayers of £26 million per annum (around £10 million
in NHS administration costs, and nearly £16 million in compliance
costs to business).[14]
· Improved service
quality resulting from increased competition.[15]
· Improved access
in terms of opening hours.[16]
12. The OFT maintained that the scrapping of entry
regulations would not lead to a substantial overall reduction
in the number of pharmacies, and that there would be zero impact
in terms of access for the elderly and low income groups.[17]
However, this conclusion was strongly contested by the overwhelming
majority of submissions and evidence put to us.
9 Pharmacy only-or P medicines-do not require a prescription
but a pharmacist must supervise their sale. This can be because
of the active ingredient involved, the strength of the drug, the
instructions for use or its pack size. For example, Nurofen tablets
(200 mg) are classified as 'P' in a pack of 24 but in a pack of
12 are available as a General Sales List medicine. Other P medicines
include many of the stronger cold and flu medicines. General Sales
List medicines are medicines that do not need to be sold in pharmacies
but do need to be sold in a lockable shop. They are commonly found
in supermarkets, convenience stores and petrol stations. GSLs
are listed on 'The Medicines (Products other than Veterinary Drugs)
(General Sale List) Order 1984' and include such medicaments as
cough mixtures and paracetamols. Back
10
See for example comments by Lord Clement-Jones, HL Deb, 25 February
2003, col. 122; Ev 1-2 (Pharmaceutical Services Negotiating Committee);
Ev 3 (National Pharmaceutical Association); Ev 54 (Lloydspharmacy) Back
11
Ev 57 Back
12
Q94 (Mr D'Arcy); Q124 (Ms Colling) Back
13
OFT609 (2003), para. 1.12 Back
14
OFT609 (2003), para. 6.2 and 6.31 Back
15
OFT609 (2003), para. 1.13 Back
16
OFT609 (2003), para. 1.17 and 1.20 Back
17
OFT609 (2003), para. 1.18 and 1.19 Back
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