Community Pharmacies

Philip Dunne Excerpts

Wednesday 2nd November 2016 Commons Chamber

[The Minister of State, Department of Health (Mr Philip Dunne)]

It is a pleasure to follow the hon. Member for Burnley (Julie Cooper). I was interested to learn of her personal experience in the sector. She gave a well-informed speech that was in stark contrast to that of her boss, the hon. Member for Leicester South (Jonathan Ashworth). She was generous to contributions from Opposition Members, but it is only fair to say that Members on both sides of the House expressed considerable support for the work done by community pharmacies up and down the country. There is unanimity in the House on the importance of not only pharmacies’ current work, but their increasing role in supporting the NHS and providing services in future.

I am grateful for the contributions made today by 24 hon. Members, in addition to the Front-Bench speakers. I wish to start my remarks by referring to the impact that these proposals will actually have on the typical pharmacy, because I am sorry to say that there has been considerable confusion, mostly among Opposition Members, about what the proposals deliver. The average pharmacy will see a reduction in taxpayer subsidy of £16,000 a year. The largest element of that is a reduction in the establishment payment, which is a fixed payment of between £23,000 and £25,000 that most pharmacies receive just for being there. It will be reduced by 20% from 1 December, which equates to a reduction of just over £400 per month, or £100 a week. From April, it will decrease by a further £400 per month, to £200 a week. Those are not huge reductions for private businesses. This element is a 40% reduction in the only fixed taxpayer subsidy that I am aware of that is paid to private businesses up and down retail high streets in England.

Meanwhile, pharmacies will still receive £1.13 for every prescription item they dispense, with the average pharmacy dispensing 87,000 items a year, as was said by the hon. Member for Liverpool, Wavertree (Luciana Berger), who is, sadly, not in her place.

[Luciana Berger]

I am here.

[Mr Dunne]

Oh, she is—I apologise. We are also introducing a new quality payment scheme worth up to £6,400 a year, so that the amount of NHS funding community pharmacies will be receiving will remain very significant.

In addition to payments from the NHS, pharmacies can earn extra income from a range of sources other than dispensing fees. About half the clinical commissioning groups in England already commission minor ailment services from pharmacies. These services include: flu vaccinations, which are topical today; stop-smoking schemes, which were topical last month, in Stoptober; and emergency hormonal contraception. All of those provide an additional source of income for community pharmacies. I believe the right hon. Member for North Norfolk (Norman Lamb) referred to healthy living pharmacies, and they will now qualify for this new quality payment, whereas they have not in the past—I hope he will welcome that. The Local Government Association’s briefing ahead of this debate echoed that fact, saying that

“there are significant opportunities for councils to commission public health services from community pharmacies as a key element of their health improvement strategies.”

In addition to those two alternative sources from NHS and non-NHS public bodies, in many cases pharmacies get a whole section of private sector income from non-publicly funded elements. That has not been referred to at all, but it is a significant element in the profitability of many pharmacies.

The Government’s vision in these reforms is to bring pharmacy into the heart of the NHS. The Opposition spokesman, the hon. Member for Leicester South, gave what appears, from his early outings at the Dispatch Box, to be becoming a trademark speech in his new role, seeking to scare the public about the proposals without demonstrating a genuine understanding of how community pharmacies are funded or owned, or of what is proposed by the measures. Since 2005-06, there has been an 18% increase in the number of pharmacies, so that today some 1,800 more operate in England than did so 10 years ago. Next year, pharmacies in England will receive £2.6 billion in funding from the NHS. NHS England supports the developments that we are proposing. The suggestion is that we will decimate NHS services because we will push a large number of people out of community pharmacies to their GP, but that is not the belief of NHS England. This is not about pharmacy closures—the point made by almost every Opposition Member who spoke—but about securing better value from the funding that we provide, modernising the way in which we do it so that pharmacies are not the only sector in the country that receives direct taxpayer subsidy for opening premises on the high street, and encouraging them, through increasing payments in the future, to provide more services to help patients in every community.

Community pharmacies are already much more than the place to which we go to get our medicines. They are an essential front-line service, providing care direct to patients and increasingly advising on a wide range of public health issues, for which, as I have indicated, they are paid separately from their dispensing fees. In doing so, they can relieve, and are relieving, pressures on other parts of the NHS.

Our package of reforms are about advancing that agenda, by rewarding quality for the first time, and moving to an enhanced role for the community pharmacy network in providing value-added services, as well as dispensing prescriptions. Yes, it does include making efficiencies in the way that these pharmacies are funded—I am talking about a reduction of £200 a week from next April—but those savings can be made within community pharmacies without compromising the quality of services or the public’s access to them. A key element of our proposals is that we will protect those pharmacies on which communities depend the most through the pharmacy access scheme, which has been supported by many hon. Members. A review of eligibility will assess the impact on those pharmacies in 20% of the most deprived areas, close to the one-mile test. That review opened yesterday and lasts for six weeks.

The hon. Member for Sedgefield (Phil Wilson) referred to the pharmacy access scheme. He admitted that, by his calculation, 40% of the pharmacies in his constituency will benefit from the scheme. I can update him on that. Nine out of the 20 pharmacies—or 45%—in his constituency will benefit. Indeed, his constituency will be one of the biggest beneficiaries of this scheme.

In summary, the reforms are what the NHS needs and what patients and taxpayers expect. I am confident that we will see a community pharmacy sector that is more efficient and better integrated with the rest of the healthcare system and delivering better services for patients as a result. I urge colleagues to support the amendment to this motion.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.