Community Pharmacy in 2016-17 and Beyond

Baroness Chisholm of Owlpen Excerpts

Thursday 20th October 2016 Lords Chamber

[Baroness Chisholm of Owlpen (Con)]

My Lords, with permission, I will repeat a Statement made by my honourable friend the Parliamentary Under-Secretary of State in the other place on community pharmacy in 2016-17 and beyond. The Statement is as follows:

“In December 2015 the Government set out a range of proposals for reforming the sector. Our intent was to promote movement towards a clinically focused community pharmacy service that is better integrated with primary care and makes better use of pharmacists’ skills. I now wish to update the House on the outcome of this consultation and the measures we intend to take forward.

Let me be clear at the outset. The Government fully appreciate the value of the community pharmacy sector. There are now over 11,500 pharmacies, up by over 18% over the last decade. Indeed, the overall pharmacy spend has increased by 40% over the last decade and now stands at £2.8 billion per annum. However, we do not believe that the current funding system does enough to promote either efficiency or quality; nor does it promote the integration with the rest of the NHS that we, and pharmacists themselves, would like to see.

The average pharmacy receives nearly £1 million per annum for the NHS goods and services it provides, of which around £220,000 is direct income. This income includes a fixed-sum payment—called the establishment fee—of £25,000 per annum for most pharmacies, regardless of size or quality. This is an inefficient allocation of NHS funds when 40% of pharmacies are now in clusters of three or more, which means that two-fifths are within 10 minutes’ walk of two or more other pharmacies. Instances exist of clusters of up to 15 pharmacies within 10 minutes’ walk.

At a time when the overall NHS budget is under pressure and we need to make £22 billion in efficiency savings, it is right that we examine all areas of spend and look for improvements. The measures we are bringing forward today have at their heart our desire to be more efficient and spend precious NHS resources properly. Community pharmacy must play its part as the NHS rises to this challenge.

I am today announcing a two-year funding settlement. In summary, contractors providing NHS pharmaceutical services under the community pharmacy framework will receive £2.687 billion funding in 2016-17 and £2.592 billion in 2017-18. This represents a 4% reduction in 2016-17 and a further 3.4% in 2017-18. Every penny saved by this reset will be reinvested and reallocated back into our NHS to ensure the very best patient care. Furthermore, separately commissioned services by NHS England, clinical commissioning groups and local authorities will not be affected by this change. I want this commissioning of services to continue to grow.

From December 1 2016, we will also simplify the outdated payments structure and introduce payment for quality so that, for the first time, we will be paying pharmacies for the service they provide, not just the volume of prescriptions they dispense. We will also relieve pressure on other parts of the NHS by properly embedding pharmacy in the urgent care pathway.

As we continue the path of reform, we will be informed both by the review of community pharmacy services being carried out by Richard Murray of the King’s Fund and stakeholders such as the Royal Pharmaceutical Society. NHS England is investing £42 million in a pharmacy integration fund for 2016-17 and 2017-18. This will facilitate the faster movement of the sector into value-added services.

As an example, last week, I announced two additional initiatives to improve our offer to patients. First, those who need urgent repeat medicines will be referred by NHS 111 directly to pharmacies, not out-of-hours GPs, as at present. Secondly, NHS England will encourage national roll-out of minor ailment schemes already commissioned by some CCGs. This is expected to be complete by April 2018.

We are confident that these measures can be made without jeopardising the quality of services. In fact, we believe that the changes will improve them. To safeguard patient access, we will be introducing a pharmacy access scheme in areas with fewer pharmacies and higher health needs. We are today publishing the list of pharmacies which will be eligible for funding from this scheme. Copies are available on gov.uk and from the Vote Office. This list includes all pharmacies which are more than one mile from another pharmacy. These pharmacies will be protected from the full impact of the reductions.

In addition, we will have a review process to deal with any unforeseen circumstances affecting access, such as a road closure. We will also review cases where there may be a high level of deprivation but where pharmacies are less than a mile from another pharmacy, if that pharmacy is critical for access. This will cover pharmacies that are located in the 20% most deprived areas in England, are located 0.8 miles or more from another pharmacy and are critical for access. Additional funding over and above the base settlement will be made available as needed.

We have already announced NHS England’s proposal significantly to increase the number of pharmacists working directly in general practice, with a budget of £112 million to deliver a further 1,500 pharmacists in general practices by 2020.

Colleagues will be aware that the Government consulted the Pharmaceutical Services Negotiating Committee and other stakeholders, including patient and public groups. I am grateful for the responses received, which reinforced the value of community pharmacy and confirmed its front-line role at the heart of the NHS. The consultation also confirmed that there is potential for the sector to add even more value. However, we are disappointed by the final response from the PSNC. We endeavoured to collaborate and listened to its many suggestions over many months. Sadly, we were unable to reach agreement. Its role is, in the end, to represent the business interests of its members, and I respect that. My role is to do the right thing for the taxpayer, the patient and the NHS.

I close by setting out my firm belief that the future for community pharmacy is bright. These vital reforms will protect access for patients, properly reward the quality of services delivered by pharmacists for the first time, and far better integrate care with GP and other services. That is what the NHS needs, what patients expect and, I believe, what the vast majority of community pharmacists are keen to deliver. I commend this Statement to the House”.

[Lord Kennedy of Southwark (Lab)]

My Lords, first, I thank the noble Baroness, Lady Chisholm, for repeating the Statement made by her honourable friend in the other place. Community pharmacies play a huge role in our health and social care system. It is estimated that 80% of patient contact in the NHS is with community pharmacies. Elderly people and those with long-term conditions, in particular, rely on the service provided by their community pharmacy.

For all the warm words and reassurance from the noble Baroness, nothing in the Statement gives comfort to anyone. It confirms, despite concerns raised in this House and the other place and the concerns of the pharmacy sector, patients and the general public, that the Government are carrying on as before. Policy option 2 in the impact assessment, the Government’s preferred policy option, states that,

“there is no reliable way of estimating the number of pharmacies that will close as a result of this policy”.

So we have spending cuts—12% for the rest of this year, 7.4% for next year—and an impact assessment in which the Government admit that they have no idea how many pharmacies will close, but we are supposed to accept the claim at the end of the Statement, that

“my firm belief that the future for community pharmacy is bright”.

To make that claim have an ounce of credibility, the Government will have to do a lot better than the Statement produced today for the House.

We face unprecedented demand on health and social care services, and the importance of local pharmacies is greater than ever. When I go to my GP or my local pharmacy, there are always posters up telling people to go to their local pharmacy for a variety of conditions, not the GP or A&E.

Can the noble Baroness tell the House what she estimates the effect of the spending cuts will be on GP services in general, the out-of-hours service in particular, and on pressure on A&Es, where there is already a problem with people seeking treatment who should really be dealt with by other parts of the NHS?

There is very little information about the effect of these cuts, but some research has been commissioned on the effect of cuts to the pharmacy sector. The results are staggering: 36% of pharmacies could be forced to reduce their opening hours; 76% might have to limit currently free services, such as deliveries to housebound patients; 52% could reduce access to the pharmacist; and 76% could reduce staffing levels.

That does not sound like a bright future for community pharmacies to me; that sounds more like putting patient safety and welfare at risk with ill-thought-out plans. Can the noble Baroness say more about the effect of the Government’s plans on areas of greatest deprivation? Has she come across the pharmacy care law, a product of research undertaken by Durham University, considering the relation between community pharmacy distribution, urban areas and social deprivation in England? What evidence can she provide that the targeting of clusters in areas of the highest deprivation will not affect people who need healthcare services the most, and potentially further widen healthcare inequalities?

Can the Minister tell the House about the effect of the measure contained in this Statement on rural areas? We have heard the statement from the Government that no community will be left without a pharmacy. So can the noble Baroness, Lady Chisholm, give a commitment today that no rural area will lose its pharmacy as a result of these measures and tell us what specifically the Government will be doing to deliver on that commitment, as we need more than warm words? Has the Minister considered the impact that these measures could have on other NHS services? How does she square the desire from the Government for community pharmacies to do more to relieve pressure on GPs and A&E services when, as a result of these actions, opening times, services and the viability of these pharmacies could be put at risk?

In conclusion, if in the time allowed the Minister cannot answer all the points that I have raised today, I hope that she will give a firm commitment from the Dispatch Box to write to me and place a copy in the Library.

[Baroness Chisholm of Owlpen]

I thank the noble Lord for his questions. These reforms will make the necessary modernisation to provide the best possible service for the patient. He mentioned the problems with pharmacies closing and asked where that was going to leave us. We are investing £112 million to deliver a further 1,500 pharmacies in general practice by 2020. The NHS England pharmacy integration fund will be focused on the deployment of clinical pharmacies and pharmacy services in the community and primary care settings, including groups of general practices, care homes and urgent care settings, such as NHS 111. This will improve access for patients, relieve the pressure on GPs and A&E departments, ensure optimal use of medicines and derive better value, improving outcomes for patients.

The noble Lord also asked about pharmacies in deprived areas and rural communities. That is why we are setting up the primary access scheme and are today publishing the list of those pharmacies that will be eligible for funding from the pharmacy access scheme. These pharmacies will be protected from the full effect of funding reductions, and the scheme will include a review process to deal with any inaccuracies in calculations or any unforeseen circumstances. I hope that that answers the noble Lord’s questions.

[Lord Rennard (LD)]

The noble Baroness said in answer to my question on Tuesday:

“We are not suggesting that any pharmacies close”,—[Official Report, 18/10/16; col. 2225.]

but then went on to imply that some of them would be closed. Does she agree with the former Health Minister, Anna Soubry? She said in the House of Commons on Monday that,

“there is great concern about the proposals”,

and that if,

“there was ever a time to argue to increase the role of pharmacies, it is now”.—[Official Report, Commons, 17/10/16; cols. 593-94.]

Does the Minister accept that it will often be the smaller, independent pharmacies that will be under threat of closure and that closing them will reduce competition, restrict choice and increase prices? Can she say a little more about the integration fund? I understand that it was originally announced as being worth £300 million over five years, but it now seems to be worth £42 million in the next two years. Has the promised cash disappeared?

Will the Minister confirm that the access fund is largely coming out of the general pot to support pharmacies and that most of the expenditure through it will therefore be at the expense of support for other pharmacies? When local authority funding is being reduced for public health projects as a result of cuts in funding from NHS England, is not this another example of a false economy—making short-term savings that will lead to greater costs and pressure on the health service in future, in particular on GP surgeries?

[Baroness Chisholm of Owlpen]

It is important that we offer a level of certainty and stability to pharmacy businesses and contractors providing NHS pharmaceutical services under the community pharmacy contractual framework, which will receive £2.687 billion funding in 2016-7 and £2.592 billion in 2017-8. The pharmacy integrated fund, as I said earlier, will make a huge difference to the NHS integrated fund, which will focus on the deployment of clinical pharmacy services in the community and primary care settings.

[Baroness Seccombe (Con)]

My Lords, as a great supporter of pharmacies, especially in rural areas, may I draw my noble friend’s attention to one rural area where a pharmacist wished to open a pharmacy, but it was objected to by doctors, because they had their own pharmacies in their practice? That is a great disservice to the community, which had to go six miles to find a chemist’s shop.

[Baroness Chisholm of Owlpen]

That is why the pharmacy access scheme is very much there to make sure that pharmacies in these rural areas will be fully protected from any funding reductions. But the competition is there. Pharmacies on the whole are privately owned. It is important and only fair that, in these strapped times for the NHS, private companies should in some way also help the publicly funded NHS.

[Lord Lea of Crondall (Lab)]

My Lords, my question is in the same territory as the previous question. It is not just the nomenclature but the knock-on effects between this Statement and GP dispensaries that is concerning. Have I understood this correctly? On the one hand, the Government expect more traffic to be diverted into GP dispensaries but, on the other hand, people will ultimately pay more—someone is paying—through a mixture of pressure on the big chains, supermarkets and, of course, A&E.

--- Later in debate ---

[Baroness Chisholm of Owlpen]

The point about the pharmacy integration fund is that we want to think up more joined-up ways in which we bring everything together. That is why we very much focus on the deployment of clinical pharmacies and pharmacy services in the community and primary care settings. It will include groups of general practices, but it also includes care homes and urgent care settings, such as NHS 111.

[Lord Lansley (Con)]

I am grateful to my noble friend for repeating the Statement. She has rightly highlighted that over recent years the number of community pharmacies has increased—indeed, by more than 1,000 pharmacies in the last five years. That is welcome, because it is a means by which there is a reach into the community that is unparalleled elsewhere in the health and care services. But it is about how we go about diversifying pharmacy income. For a long time, it has been clear that it should not be wholly reliant on dispensing fees and the global sum, as it has been in the past. We need additional services, enhanced and locally commissioned services, to grow. My noble friend’s Statement said exactly that, but the question is how we do it. By and large, it will not be done out of the public health budget of local authorities, although some will be. It is potentially mainly out of things such as the better care fund, enabling us not just to have pharmacies embedded in GP and other health services but using the community pharmacies’ reach in the community to deliver support to people with chronic conditions. Will my noble friend say that there will be an effort to promote this? At the moment, we have no good data from the past two years on local commissioning of those enhanced services. Can we get those data sorted out so that we can see whether pharmacies are being used as they should be and diversifying their income?

[Baroness Chisholm of Owlpen]

I agree with everything that my noble friend has said—data are extremely important. Of course, with those new reforms we will have the opportunity to make changes and be absolutely sure that the integrated services are working as we want them to work.

[Baroness Donaghy (Lab)]

My Lords, this is beginning to sound like the fate of the post offices. In my local urban chemist—as we still call it; I have not quite got used to calling them pharmacies—I do not think I have ever seen anybody pay for their prescription, because the area is poor and has a high proportion of elderly and long-term disabled people. It already performs a very good public service in an integrated way as far as it possibly can. It seems to me that it is being asked to do even more. My concern is that none of the questions asked by my noble friend on the Front Bench was answered by the noble Baroness. She also did not give any assurance that she would answer his questions in writing. I am particularly concerned about the comments that he made on the impact assessment—it seems that it is not just the data that are very woolly, but the government thinking.

[Baroness Chisholm of Owlpen]

As I said, the impact assessment was published today. I think that I did answer the noble Lord’s questions. He asked how pharmacies were going to be looked after in deprived areas and I explained about the pharmacy access scheme and how these pharmacies will indeed be protected. He also asked about the integrated pharmacies and as I said there would be £112 million to deliver a further 1,500 pharmacies. They will be integrated into general, joined-up practices within the NHS. This has to be the way to go—multidisciplinary areas where we will be focused on the deployment of clinical pharmacies and pharmacy services in the community and primary care settings. This will make a difference to groups of general practices, care homes and urgent care settings that all have pharmacies within them.

[Baroness Masham of Ilton (CB)]

My Lords, how will the community pharmacies be saved in rural areas? The numbers are very small but the people—such as elderly and disabled people who may not drive—are absolutely stuck. As it is, the pharmacies in my local villages are not open on Saturday afternoons or Sundays, which makes things very difficult, particularly in the summer when there are tourists around. As the surgeries are shut as well at weekends, the only alternatives are the A&E departments.

[Baroness Chisholm of Owlpen]

Pharmacies are privately owned and there is competition among them. On the whole, it is beneficial for them to provide the necessary services but, as I said earlier, as far as keeping pharmacies open in rural areas is concerned, we are absolutely committed to that with the pharmacy access scheme.