Human Medicines (Amendments Relating to Hub and Spoke Dispensing etc.) Regulations 2025
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Baroness Merron
That the Grand Committee do consider the Human Medicines (Amendments Relating to Hub and Spoke Dispensing etc.) Regulations 2025.
Relevant document: 25th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, as I know we all acknowledge, community pharmacies play a vital role in our healthcare system by ensuring that patients have access to medicines and acting as an easily accessible “front door” to the NHS. They dispense around 1.1 billion NHS medicines every single year.
Traditionally, all dispensing processes have been done in a single pharmacy or by a dispensing doctor. In hub-and-spoke dispensing, routine tasks such as sourcing, preparing, assembling and labelling medicines are carried out at a central “hub”, which is separate from the “spoke” pharmacy where the prescription is received. Hubs often make use of automated processes to realise economies of scale and to increase efficiencies. Such arrangements already exist in the UK, but the Medicines Act 1968 restricts their use to community pharmacies that are part of the same legal entity. Not all pharmacy businesses are able to invest in their own hub-and-spoke model, as compared with the larger pharmacy chains.
The Government are committed to supporting the community pharmacy sector and to cutting the red tape that frustrates it. The proposed changes have been a long time coming. If approved today, as I hope they will be, they will allow all pharmacies, including small independents, and dispensing doctors to utilise hub-and-spoke arrangements if they choose to do so.
Staff in hub-and-spoke arrangements report a calmer, more focused environment—I think we would all welcome that. In hubs, there are fewer disruptions and the use of automation reduces the risk of dispensing errors. At spokes, staff have more time for complex cases and patient care, making better use of their skills—something that the Government aim to support. The legislative changes we are debating will help all pharmacies and dispensing doctors realise these benefits, instead of limiting them to a few.
Turning to the details of the SI, we propose to amend the Human Medicines Regulations 2012 and the Medicines Act 1968, using the powers in the Medicines and Medical Devices Act 2021. The proposed changes to the Medicines Act 1968 adjust the definitions of “wholesale dealing” and “retail sale”, and remove the legal restrictions that prevent hub-and-spoke dispensing between different legal entities. The amendments go beyond simply removing the barrier that currently limits hub-and-spoke dispensing to pharmacies within the same legal entity. Noble Lords will, I hope, be pleased to know that the amendments include additional elements to ensure the safe and effective implementation of the policy by putting in place provisions to ensure accountability, governance and transparency for patients.
The proposed changes to the Human Medicines Regulations 2012 create a new model of hub-and-spoke dispensing, establishing a framework for the sharing of patient information between the hub and the spoke, and set criteria for the newly permitted arrangements. These criteria are: that both a hub and a spoke must be pharmacies registered with the pharmacy regulator, unless a spoke is a dispensing doctor practice; that there must be written arrangements between any hub and spoke, which must include a comprehensive statement in relation to their responsibilities, to ensure that each party is clear about the processes and activities for which they are responsible; that the medicine label includes only the name and address of the spoke, so that patients know who to ask any questions about their medicines; and that the spoke must conspicuously display a notice on its premises and online in relation to the dispensing arrangements.
The changes also establish an information gateway. This achieves several purposes, such as the conditions for lawful sharing of the relevant patient data between the different legal entities that operate these arrangements.
On the timescale, it is proposed that all legislative amendments come into force in the October this year across the UK. This will allow time for secondary legislation to be amended, as appropriate, across all four nations, and give the pharmacy sector time to explore the relevance and possibilities of the new hub-and-spoke arrangements to its businesses.
I hope that I have been able to set out what we are proposing and the rationale behind it. I look forward to what will, I am sure, be an informed and constructive debate. I beg to move.
Viscount Stansgate (Lab)
My Lords, I broadly support these regulations. I hope that my noble friend the Minister will not mind my intervening briefly to ask a couple of questions; I have no wish to detain the Committee.
Obviously, I understand that community pharmacies have been playing an increasingly expanded clinical role in treating minor illnesses and improving medicines’ safety and optimisation. To improve the efficiency of dispensing, these regulations will help support community pharmacies in taking on a more clinical role. The purpose of these regulations, which is to free up smaller pharmacies and enable them to undertake hub-and-spoke models, is, I am sure, a good one. First, does my noble friend the Minister have any idea of how welcome this will be to smaller pharmacies? Is it expected that a great deal of them will undertake these new arrangements outwith the previous restriction on being in the same legal entity?
Secondly, having recently been to my local pharmacy and having talked to the pharmacists there, I was struck by the strain that they are under, both in terms of their workload and financially. Am I right in thinking that this hub-and-spoke model, which will be made more widely available, will in some way help smaller pharmacies deal financially with the situations that they face? Am I wrong in thinking that there is a financial dimension to this? If there is, I would be very grateful for any reply that the Minister can give, but, in summary, these regulations are a step in the right direction.
Lord Kamall (Con)
My Lords, I thank the Minister for introducing this statutory instrument in her usual succinct way and all noble Lords who spoke in this debate. We on these very efficient Benches—so efficient that we have only one person here today, which is very good for productivity—recognise the Government’s intention to modernise pharmacy through the introduction of hub-and-spoke arrangements and to increase efficiency and free up pharmacies to focus more on patient care, finally getting away from the 1945 model that we have been stuck with where patients try to get an appointment with their GP in the morning and, if they are fortunate enough to see them, get triaged off to a pharmacist or to secondary care. This is much more efficient, and we welcome it.
I also welcome what many other noble Lords have said about more diagnosis and testing occurring at the level of the pharmacy. As we saw, one of the silver linings of Covid was the fact that people got more used to home testing. If we can see more home testing and more pharmacy testing out in the community, maybe we can reach those communities that we have found very hard to reach until now. We thought about this lots when I was in government; all Governments think about how to reach those hard-to-reach communities.
That said, while the aim is understandable and commendable, we have some concerns. First, the Government have chosen to proceed with only one model—the patient-spoke-hub-spoke-patient model—rather than the two models proposed by the previous Conservative Government, the other of which was patient-spoke-hub-patient. We see this as a significant narrowing of options, particularly when the consultation revealed a divided response from stakeholders. As the noble Lord, Lord Scriven, said, while large pharmacies were very much in favour of the model that the Government ended up choosing, many smaller and independent pharmacies remained opposed, as well as patients and providers who may have benefited from the second model, where patients are dispensed to directly.
In the world that we live in, with Amazon, eBay and the advent of direct-to-consumer online pharmacies, which will dispense only if there is a valid prescription—they are not just selling stuff off prescription—it is really important that we encourage that innovation. It would be wonderful for patients, particularly those with limited mobility who find it difficult to get to pharmacies, to be able to order on the NHS app, have it approved and know it will be delivered to them within so many hours or days. That would be a far more efficient model. I hope that we are not inhibiting online pharmacies with all those safeguards.
I completely understand that there is always a balance between innovation and safety and precautions. Can the Government explain why they chose only one model? Was it because of concerns over safety, good lobbying or the interests of larger pharmacists being heard over the smaller pharmacists? We would be very interested in that. We are concerned about limiting it to a single model, particularly when we know that community pharmacies dispensing for GPs and distance sellers are finding innovative solutions.
Secondly, there is funding and support. The updated impact assessment openly admits that there is considerable uncertainty over the cost of establishing these hubs, their operating expenses and the level of uptake. Once again, there is an impact on smaller pharmacies. How do the Government intend to avoid the risk that smaller providers could be left behind or forced out of the market, reducing choice for patients and challenging the role of small community pharmacists? Are they concerned about this? In addressing that, have they looked at any incentives or ways to help smaller pharmacists who may not have the resources for that upfront investment?
Thirdly, the question of oversight and transparency remains. The Minister will be aware that I ask a lot of questions on patient data and accountability of data. The Government are yet to clarify who will be responsible for collecting and publishing data on the implementation and impact of these new arrangements, particularly in light of the abolition of NHS England. This oversight is crucial not only to ensure patient safety and quality of service but to understand the broader impact on costs and service delivery.
Let me be clear: we support the idea of the single patient record and the federated data platform. One of my jobs when I was a Minister was to make sure that we joined up and digitised the data as quickly as possible. We know what efficiencies that could lead to in our healthcare, but patient safety and data protection must be addressed with rigour. The framework for sharing patient information between hubs and spokes is a key feature of this reform, yet the SI and the supporting documents provide limited detail on how patient confidentiality will be maintained and how the risk inherent in multiparty data sharing will be mitigated.
We do not oppose the principle of modernising pharmacy dispensing through the hub-and-spoke model. We were disappointed that one model was chosen, as we thought we could have some innovation with the other model. Without clearer information and incentives to smaller providers, we worry about smaller community pharmacies being pushed out, particularly in the light of having only one model. How will the Government make sure that that risk is avoided? We urge them to engage more fully with all stakeholders, clarify their plans for funding and data governance, remain open to innovation and not close down other options prematurely. With that, I look forward to hearing from the Minister.
Baroness Merron (Lab)
My Lords, I thank noble Lords on all sides of the Committee for their helpful contributions to today’s debate. I get a sense of support for where we are going and questions about how it will happen, which I completely accept. This instrument is part of a package of measures to relieve pressure in community pharmacy and improve patient care and the ability of the NHS to serve patients, particularly in a community setting—one of the main pillars of change for our NHS fit for the future. It builds on legislation that is already in place to enable pharmacies to increase efficiency by dispensing medicines in their original packs. Pharmacy technicians are now able to act under patient group directions to supply medicines, and the Government will shortly bring forward legislation to enable them to be authorised to do more in the pharmacy.
My noble friend Lord Stansgate raised a number of issues; he asked how it has been received and raised the financial sustainability and attraction of these measures. I reiterate that the changes being introduced are enabling. They are purely voluntary. It is entirely up to pharmacists, which are independent businesses—it is important to remember that—to decide whether they feel that engaging one, two or several hubs is going to be beneficial to their business model. It is up to them to decide.
Lord Kamall (Con)
I appreciate the response from the Minister. She said that she will keep this under review. As part of that review, are the Government or officials looking at ways in which they could mitigate concerns about model 2 in terms of those relationship and safety concerns? That would perhaps enable investigation of a future model 2.
Baroness Merron (Lab)
It would be fair to say that the review will be on how well this is working rather than an attempt to move to model 2. In all the modelling, we believe this is the best way to go. Patient safety is paramount, as it always should be, as is the expansion of services to individuals, but we will keep the whole matter under review.
There were two other questions. The noble Lord, Lord Scriven, asked about the fee structure. The spoke will still receive the fee for dispensing and the paying hub for the services it provides. We are not planning to dictate how the fee structure will work between hubs and spokes, as I said in an earlier answer.
Lord Scriven (LD)
This is an important point. This could create market distortion. If there was a hub with a number of community pharmacies as part of its parent group, is the noble Baroness saying that it could give an advantage to those pharmacies against an independent pharmacy that was not part of the hub group and therefore could charge that pharmacy a higher fee for providing exactly the same service? That could create market distortion. It is important that we understand that that could not happen within these regulations. If the Minister cannot give that answer, I ask her and her officials to go away, think about this carefully and write back. It is an important point.
Baroness Merron (Lab)
The whole point of the regulations, as well as cutting red tape, is about levelling the playing field. I understand the point the noble Lord is making, and I re-emphasise that arrangements between hubs and spokes are for them to make, rather than us to set. I am happy to look at the point the noble Lord makes and to write to him further with more detail.
Baroness Finlay of Llandaff (CB)
I will pick up on this because it is a concern. In her summing-up speech, the Minister spoke about the business interests of the hub and the spoke. A concern is whether you could have a hub, which will be a large, possibly even multi- national, provider that could create a monopoly. As has been recognised during this debate, in rural areas, in particular, dispensing doctors are often a small group. Pharmacy services have a relatively low turnover but are important to such communities that are a long way from other places and where the services provided by the pharmacist are particularly important. Yet, as a small spoke, they may not have the power to negotiate with a strong central hub that may well be driven by shareholders and profit. There is a little bit of me that would really like this to somehow be a not-for-profit arrangement over the whole of it, but I realise that that is not feasible.
Baroness Merron (Lab)
Perhaps it might be helpful to noble Lords if I refer to the Competition and Markets Authority in this regard because it noted that the proposed amendments that we are speaking of today are broadly competitive. It also acknowledged that there could be potential long-term competition risks if the market develops in such a way that pharmacy access to medicines, for example, is through an increasingly limited number of hub suppliers.
As the noble Baroness, Lady Finlay, suggested could happen, we might have only a few larger hubs emerging. I understand the concern that that could affect the availability of medicines for patients and their pricing. However, because of the recommendations from the Competition and Markets Authority, the department has committed to review the impact on competition once the hub market is sufficiently established. We will then assess whether action is needed to alleviate any barriers to the development of what, I believe, we all want to see: a dynamic, competitive hub market.
Lord Scriven (LD)
I am sorry to pursue this, but, in the impact assessment, the Government do not state how many hubs will be created. How can they reassure communities that these regulations will not distort the market? It is a very important issue for community pharmacies, which are dispersed. There is now a genuine concern that the Government do not even know how many hubs will be created—that links to the exact point that the Minister just made on the number of hubs.
Baroness Merron (Lab)
It is not possible to predict—although I do not think the noble Lord, Lord Scriven, is asking me to do so—how many pharmacies will take up this arrangement, because it is an enabling piece of legislation, not a requirement. It is also a matter between those businesses. To remind noble Lords, we already have provision in place for suitable pharmacy provision across the country, whether it is rural or urban, and that sits outside the regulations we are talking about today.
The noble Lord, Lord Scriven, asked about the regulation of hubs, and I can assure him that they will be registered pharmacies regulated by the General Pharmaceutical Council in Great Britain or the PSNI in Northern Ireland. The General Pharmaceutical Council has great experience in inspecting hubs and has substantial intelligence on what practical arrangements have been adopted by hub-and-spoke operators that work well. The pharmaceutical council will also ensure that all standards for registered pharmacies are met and—to the point raised by a number of noble Lords, including the noble Lord, Lord Kamall—that patient safety is protected.
To conclude, I emphasise that hub-and-spoke arrangements are not new, as large companies already operate their own hubs. This is probably a discussion for another day, but some people might suggest that that was an example of some market influence, if I can tactfully put it like that. In the meantime, I thank all noble Lords for their contributions, consideration and questions, and I beg to move.