Distance Selling Pharmacies and Some Predictions for the Future
We do not often update on distance selling pharmacy applications where we act for clients as it is something that we are doing nearly every day. However, we have had a number of interesting applications and worked with a lot of new clients in the last year and we just wanted to mention some of them here and also update you on our view of what might be in store for the future.
Everyone will know Lloyds Pharmacy and we were pleased to work with them all the way through to their successful appeal. I am fairly sure there was not a single line of their SOPs that we did not discuss at some stage!
Another pharmacy operator that might not be as well known at the moment (even though they are now the second largest pharmacy after Pharmacy2U) is ECHO (www.echo.co.uk). We were delighted to work with the ECHO team all the way through their application and we were pleased to see it approved without any appeal of the London Area Team decision.
We also worked with Co-op Ventures on their return to the pharmacy market via distance selling, including the appeal, and then Co-op Ventures announced their acquisition of DIMEC for a price rumoured to be a bit under £10 million, which puts them in a very interesting position for the future.
As well as acting for many new independent pharmacy operators who were seeking to secure new distance selling pharmacy contracts and maintianing our 100% success rate from 2017, we were also approched by an interesting pharmacy operator currently based in the United States, so it would appear that despite doom and gloom in the sector their is still significant interest in new models of prescription delivery using distance selling pharmacies and apps.
Predictions for the Future
2019 promises to be an even more interesting year and we see the market hotting even as remuneration remains a challenge. One obvious thing that the DoH might consider at some stage is to pay distance selling pharmacy operators in a different manner from the standard bricks and mortar operators. In fact, just after I finished the draft of this article the government published its “NHS Long Term Plan”. In the plan there wasn’t much to be said for the future of the pharmacy sector, but one part that really caught our attention here was this statement;
- NHS England and the Government will explore further efficiencies through reform of reimbursement and wider supply arrangements
I have no doubt that there is some intense lobbying going on in the pharmacy sector to overhaul the current remuneration structure and have a different structure for distance selling pharmacies. Given that the DoH seems to approve of distance selling and wants to close down a lot more traditional high street pharmacies, it doesn’t take a genius to work out that the easy way to achieve these goals is to make distance selling more attractive and take more money away from traditional models. Contractors and the PSNC often complain that the DoH appears not to understand community pharmacy and the financial pressures it faces. The reality might be the very opposite and the DoH must be aware that if they keep changing the remuneration structure they will achieve their goals by default.
The DoH doesn’t like ot be accused of springing changes on unsuspecting private sector operators, so they often provide vague mentions of making changes (that nobody can really understand) even though they already have a clear idea of what they want to achieve. I suspect we will see the above comment rolled out again in the future as and when changes come through. The mention of “wider supply arrangements” could mean a number of things, but two things jump out in particular;
- “Supply” could mean the physical supply of medicines to patients, or
- “Supply arrangements” might mean that the government is considering central puchasing for pharmaceuticals so that contractors do not benefit from what the DoH sees as excessive profits through careful buying.
A centralised purchasing strategy would be complex to administer and one really has to wonder if the government will do a better job than the private sector at driving down drug prices, but we are already seeing many CCGs agree pricing deals with branded generic suppliers and effectively force surgeries in their area to prescribe these branded generics rather than simply writing generic prescriptions. This policy has undoubtedly cost pharmacies in affected areas a lot of lost profit and shows a direction of travel within the sector that might be hard to reverse.
We anticipate an interesting year and will update when we can, but want to thank all of those who used our services in 2018. Thank you!
(Our involvement with all clients listed here was notified to LPCs, local pharmacies and / or published on the Primary Care Appeals website.)