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 Friday, 17 January, 2003, 10:16 GMT
Reform 'could hit small pharmacies'
The OFT has recommended greater competition
Many small pharmacies could be left struggling to survive if ministers decide to back radical reforms, it was claimed on Friday.

A report from the Office of Fair Trading said that strict rules governing how many pharmacies can serve a single area should be relaxed, it said.

Any registered pharmacy with qualified staff should be able to dispense NHS prescriptions, it said.

This would save money for customers, the NHS and business, the report claimed.

If the government agrees, this is likely to mean that supermarkets will be able to open more pharmacies as part of their stores.

But groups representing small community pharmacies say this could mean the death knell for many smaller chemists.

A spokesman for the Pharmaceutical Services Negotiating Committee said: "He added: "The OFT's recommendations will create instability in the pharmacy sector, put a blight on the investment plans of pharmacies, frustrate the plans of primary care trusts, and risk reduced access to community-based services."

Marshall Davies, the president of the Royal Pharmaceutical Society, said: "We would be very concerned if any new development were to mean that people who lived in certain areas no longer had local access to pharmacists' skills and expertise."

Liberalisation should benefit consumers, businesses and healthcare provision

John Vickers, OFT

Launching the report, the director general of fair trading, John Vickers, said: "Pharmacies are a vital part of the UK healthcare system - but entry regulations are impeding new sources of supply to the public.

"These regulations restrict competition and choice for consumers, impose a regulatory burden and limit the ability of businesses to respond to evolving customer demands.

"Liberalisation should benefit consumers, businesses and healthcare provision, so we are recommending deregulation to government."

If these proposals go through it could result in the closure of a number of small pharmacies like my own

Mike Williams, Olton Pharmacy, Solihull

Tesco believes that it might double the number of its stores which have pharmacies should the OFT approve this.

Small chemists fear that they could be put out of business if they have to compete directly with supermarkets.

While the price of prescription items will remain the same, regardless of the size of the pharmacy, the report said that customers forced to use small pharmacies were missing out on better prices offered by supermarkets for "over the counter" products such as cough medicine and painkillers.

Deregulation could save them up to 30m a year, it claimed.

The moves could also save the NHS 10m a year, and business 16m a year, it estimated.

Strict rules

Under current rules, anyone interested in opening a pharmacy and dispensing NHS prescriptions must apply for a contract from their local health authority or board.

The price of prescription drugs will remain the same
This process is aimed at ensuring there is a good spread of outlets around the country and pharmacies are not just located in profitable areas.

The OFT launched the inquiry into the sector last year amid fears that the current rules meant consumers were not getting a fair deal.

Ministers will have 90 days to consider the report and to publish a response. They are not obliged to accept the recommendations but must set out what changes are likely to be made.

At the moment, there are more than 12,000 retail pharmacies with NHS contracts in the UK.

Deregulation fears

Boots, which has approximately 10% of the prescription market, welcomed the findings.

Its director Alastair Eperon said: "The issue is how you ensure all parts of the country have adequate representation of pharmacy. The current regulations broadly speaking actually do manage to achieve that.

"In a completely deregulated market there is the possibility that commercial interests may dictate where pharmacies are, and some people may find themselves deprived."

Supermarket chain Asda also welcomed the report.

A spokesman said: "The OFT's investigation of the pharmacy market confirms what our customers tell us - the current system denies them competitive prices and access to pharmacies where they want them."

Mike Williams, who runs the Olton Pharmacy in Solihull, told the BBC: "I'm very concerned. Ultimately if these proposals go through it could result in the closure of a number of small pharmacies like my own.

He said the price of the prescriptions would stay the same, but custom would go to the supermarkets nevertheless.

"The catchment areas for some of the larger supermarkets is far wider than for some of the smaller community pharmacies."

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  ON THIS STORY
  The BBC's Nicola Carslaw
"Ending restrictions aims to deliver more competition"
See also:

17 Jan 03 | UK
16 May 01 | Business
18 Aug 01 | Health
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