Medicines and Medical Devices Bill

Lord Lansley Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Wednesday 28th October 2020 Grand Committee

[Lord Hunt of Kings Heath (Lab) [V]]

My Lords, I am glad to add my name to Amendments 23 and 29. I am a strong supporter of community pharmacies. Over the past few months, they have done magnificent work. They stayed open, took pressure off the rest of the NHS, and are a central part of community resilience. We cannot take them for granted. They face a number of extra costs at the moment: increased prescription numbers, extra staff costs from the increased demands for advice and medicines, covering for sickness and the rise in locum rates, and one-off costs such as decontaminating pharmacies when someone infected has visited. Before Covid-19, the community pharmacy network was already pretty vulnerable.

I am glad that, at the end of March, the Government agreed to inject £300 million-worth of advance payments into community pharmacy. A further £50 million was paid in May, followed by £20 million in June. That £370 million cash advance was of course very welcome, but it will not relieve the ongoing financial pressures because it is set against future income. Instead of this being treated as a loan to be repaid, there should be a recognition of the extra costs that community pharmacies have had to carry since Covid-19. Will the Minister consider that? I also ask her to consider what further financial support needs to be given to the sector over the next few potentially very difficult months.

That is the background to the debate about hub and spoke. As the noble Lord, Lord Clement-Jones, pointed out in previous debates, we have to go to the impact assessment to find any reference at all to hub and spoke. Clearly, it could offer many advantages. Mobile deliverers will be able to partner with dispensing pharmacies to deliver their prescriptions; he spelled out the key advantages. Equally, there are fears that it could undermine the whole community pharmacy network. My concern is about the impact on smaller pharmacy groups and individual companies and shops.

The Minister in the other place, on Third Reading, said that she intended

“to give smaller community pharmacies the same opportunity that large pharmacy businesses already enjoy.”—[Official Report, Commons, 23/6/20; col. 1239]

That is a good statement, but I say to our Minister that Governments often make statements about the importance of small businesses and, when it comes to the actual arrangements, those business often struggle to compete. I hope that this is not being done to try to rationalise the community pharmacy network, because it is a great strength that we have so many pharmacies on our high streets, where people can walk in and get immediate access to health advice and help.

The amendment is very reasonable. It simply asks that the Government consult the sector again on their plans. A previous consultation, started in 2016—two Parliaments ago—has never been concluded. Given the impact on the sector and on patients, surely the Government should undertake a proper consultation, to make sure that any legislation follows that rather than the anticipatory approach referred to by my noble friend Lady Wheeler. I hope that the Government will signal their support for the community pharmacy sector as a whole.

[Lord Lansley (Con)]

I thank the noble Baroness, Lady Wheeler, and the noble Lord, Lord Clement-Jones, for tabling their amendments, which allow us to have a useful debate; we might not otherwise reach into what some implications of the use of these powers might be. I particularly thank them for the way in which the amendments were introduced, which set out clearly and fairly the context and facts with which we need to work.

I recognise that Amendment 23 is a probing amendment. I am sure that the noble Baroness knows that, if she actually wanted to remove the capacity for legislating to introduce hub and spoke models, Clause 2(1)(g) would have to go as well as paragraph (c) to make that effective, but I do not think she wants to do that; I do not either. We all want to express our support for the pharmacy sector. In my view, the Government’s proposals in the Bill will allow that support to be given additional expression; they seem a positive step to have taken.

As someone who was shielded earlier in the year, about the only place I ever visited in April and May was the local pharmacy—not that often, but the fact that it was there and working, and the way in which it worked, was immensely impressive. Over the years, I have had a great deal to do with the pharmacy industry. In some cases, I am not sure that it was altogether happy about that. The noble Lord, Lord Hunt of Kings Heath, may remember that I worked with the National Audit Office in about 2008, when I was shadow Secretary of State, to establish the extent to which the pharmacy sector benefited through the category M reimbursement system by hundreds of millions of pounds more than it was supposed to. Those large-scale additional funds that were going into the sector had to be clawed back, as happened in the early part of the decade that we have just gone through.

That led to considerable turbulence in pharmacy incomes and values. They were overinflated and the incomes were higher between about 2015 and 2018, and the considerable clawback had a negative impact. Most recently, it is telling that the value of pharmacies—and the price increase—has gone down. It is also interesting to read the commentaries that say that pharmacy in Scotland attracts greater value because the flow of resources into it there is regarded as more stable than in England.

That is a great pity, because we have reached a point where there should be more stability and funding for pharmacies, and I want to pick up a point made by the noble Lord, Lord Hunt of Kings Heath. He suggested that the Government consider turning the advance payment into not a loan but a grant. It is a large sum of money, so it is not as easy as that. However, whereas earlier this year the global fund for pharmacies was set at about £2.6 billion and was going to be retained at that level in cash terms over five years, we have to think hard about whether that is reasonable under the circumstances. There is a good case for recognising additional costs met by pharmacies this year, and potentially into next year, and for reimbursing them perhaps through a change to the establishment fee before it disappears, with a considerable sum to recognise that.

We must also recognise that pharmacies will need real-terms increases in their resources—much as other parts of the NHS-related system are seeing real-terms increases in resources—and not to stand still in cash terms. Over the next four years, that might be something like £130 million extra.

All the way through, we have never achieved as much as we should in terms of pharmacies delivering additional services, particularly clinical services. It is partly because clinical commissioning groups have never quite recognised the flexibility they have in budget terms to use pharmacies. The noble Lord, Lord Clement-Jones, referred, quite rightly, to medicines use reviews—which are being phased out—new medicine services, nicotine-replacement services, sexual health services, minor illness services and so on. A wide range of additional services can be provided by pharmacies. If they can do it, frankly, the GPs, as those at the heart of the clinical commissioning groups, will find that it benefits them directly in reduced demand on their surgeries, which is of course one of their principal stresses at the moment. I hope that the Government will think about all that.

In this context, with these powers in the Bill, the Government do not need to know whether a large number of independent pharmacies will take advantage of the hub and spoke model. It is entirely permissive; they can choose to do so or not. The fact that they cannot at the moment is a significant potential constraint on the ability of independent pharmacies to access the benefits of automation in their sector. I am absolutely clear that we ought to give them access to this potential benefit. I do not know how many would take advantage of it or to what extent the large company chains would make their hub and spoke model available to allow independent pharmacies to get the benefits of that automation. It seems to me that they should, because there are many parts of the country that they do not reach and where they are not in competition. It is perfectly reasonable for them to allow them to access to it, particularly in some of those more remote parts of the country where dispensing is more difficult.

Many of the concerns raised about this in the debate seem to come down to the separate question that I can remember debating on legislation 15 or more years ago about whether we retain the role of the responsible pharmacist. This does not change that. The responsible pharmacist will remain as is; I do not see any plan to change that part of the pharmacy regulation. The change to hub and spoke seems potentially desirable.

While Amendment 29 does not need to be in the Bill, it makes a very good point, which is that there should be consultation and an agreed framework with the industry, and we should ensure that the framework is one that is seen to link resources and changes in the regulations, to enable it to compete more effectively. To that extent, I hope the Minister will take on board and support the intentions of Amendment 29.

[Baroness Jolly (LD) [V]]

My Lords, I thank noble Lords for their kind words and messages. I now have a tentative diagnosis and when I get my medication I hope to be functioning at 100% soon.

These amendments are on hub and spoke dispensing, where a hub pharmacy dispenses medicines on a large scale, often by making use of automation, preparing and assembling the medicines for regular spoke pharmacies that supply the medicines to the patient. My noble friend Lord Clement-Jones has given a detailed account of how hub and spoke works.

When the five-year funding contract for pharmacy in England was announced, the Government also pledged to change legislation so that independent pharmacies could operate this hub and spoke dispensing model. My noble friend tabled Amendment 29, which would ensure that the Government consult stakeholders on how hub and spoke is used and agree a framework with the support of the relevant sectors. This will ensure that the expected savings and efficiencies, and new healthcare services via pharmacies, can be delivered.