Community Pharmacies

David Mowat Excerpts

Wednesday 2nd November 2016 Commons Chamber

[The Parliamentary Under-Secretary of State for Health (David Mowat)]

I beg to move an amendment, to leave out from “NHS services” to the end of the Question and add:

“welcomes the Government’s proposals to further integrate community pharmacy into the NHS, including through the Pharmacy Integration Fund, and make better use of pharmacists’ clinical expertise, including investing £112 million to deliver a further 1,500 pharmacists in general practice by 2020; supports the need to reform the funding system to ensure better value for the taxpayer; and welcomes the establishment of a Pharmacy Access Scheme which will ensure all patients in all parts of the country continue to enjoy good access to a local community pharmacy.”.

I welcome the opportunity to set out again the Government’s approach to pharmacy in general and community pharmacy in particular over the next few years. I will also address some of the points that we just heard, which were, frankly, alarmist scare-mongering.

The proposals I announced two weeks ago are directed at four main areas: first, the need to better integrate pharmacy with GPs, primary care and the NHS more widely; secondly, the need for the existing community pharmacy network to move from a dispensing-based model to a value-added services-based model; thirdly, the need to continue to work with NHS England to ensure value for every penny we spend on the NHS; and fourthly, the need to ensure that, as we undertake these reforms, everybody in the country continues to have ready access to a community pharmacy.

First, on integration with the NHS, especially in general practice, over the weekend Simon Stevens, the NHS England chief executive, again reiterated the importance of that and why he supports this process. We know we need to expand the number of GPs, and by 2020 we will have a further 5,000 doctors working in this area, but as well as recruiting and retaining more doctors, we need to provide them with further support. The “General Practice Forward View”, published by NHS England, has set out fully costed plans to recruit a further 1,500 clinical pharmacists into GP practices by 2020. By then there will be one pharmacist working within a GP practice for every 30,000 of population. Most of these will be prescribing pharmacists, and all will have a role in performing medicine reviews and leveraging GP time. This is a major investment and it is already happening.

[Huw Merriman]

The point I wanted to make when trying to intervene on the hon. Member for Leicester South (Jonathan Ashworth) was that I recently went to a pharmacy in my town of Bexhill, and it is making deliveries to every single customer who asks for a delivery, not just the vulnerable and the elderly. It does so because if it did not Lloyds would put it out of business. Does the Minister agree that that shows that there are efficiencies to be made, and the fact that those efficiencies are recycled in the health service has got to be good for all our constituents?

[David Mowat]

It does show that. This is a competitive business. My hon. Friend mentions Lloyds; it is one of the two big players in this industry, in which two players own 30% of all pharmacies.

[Graham Jones (Hyndburn) (Lab)]

The Minister talks about moving away from a dispensing model to a value-added model. I shall say something about healthy living if I get the opportunity to speak in the debate, but in relation to that shift, what is his view on warehouse pharmacies?

[David Mowat]

Our view on the structure of the industry is that it is up to individual companies within the sector to organise themselves and to provide their services as efficiently as possible. It is true that 70% of all pharmacies are either chains, multiples or public companies, and I will address that point later.

[Several hon. Members rose—]

[David Mowat]

I want to make some progress.

Secondly, we want to see an enhanced role for the community pharmacy network in providing value-added services. This is an aspiration that we share with the network and its representatives. To that end, NHS England has commissioned Richard Murray of the King’s Fund to produce an evidence-based report to determine which types of primary care services are best done by pharmacists over the next two or three years. The report, which will be published later this year, will inform NHS England’s decisions on how to use the integration fund of £42 million that I announced two weeks ago. There are many candidate areas, including long-term conditions, minor ailments, better care home support and more medicine reviews, as well as the work that pharmacists do in public health.

[Maria Eagle]

Many of the pharmacies in my constituency already provide such services, but they are now threatened by the Government’s proposals. Does the Minister not realise that, according to research carried out by Pharmacy Voice, in a constituency such as mine, which is No. 20 on the list of deprived areas, four in five people who cannot see a pharmacist will end up going to their GP? Does he not agree that that will achieve exactly the opposite of what he wants?

[David Mowat]

The impact review, which was published at the same time as my statement two weeks ago, estimated that the amount of extra time that people would have to spend going to a pharmacy would be a matter of seconds, even if we had, say, 100 closures. The impact review sets that out in some detail. Did someone sitting behind me wish to intervene?

[Mr Speaker]

Perhaps the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile) could detach himself from his device for a matter of seconds. It is very good of him to drop in on us and to take a continuing interest in our proceedings. They certainly interested him greatly a few seconds ago.

[Oliver Colvile]

Thank you, Mr Speaker. I was just trying to find something that was going to inform my intervention. Is my hon. Friend the Minister aware that in Devon, about £5.5 million is wasted on unused medicines? We need to do something about that.

[David Mowat]

I do realise that, and I mentioned the fact that the King’s Fund is looking into medicine reviews.

As I have said before in the Chamber, the model that is adopted for pharmacies in Scotland has a lot to commend it, even though we might not adopt it in its entirety. I hope that we will get a chance to discuss that later.

[Several hon. Members rose—]

[David Mowat]

Before I give way, I should like to quote the chief pharmacist himself. Dr Keith Ridge has confirmed that the review

“will support community pharmacy to develop new clinical pharmacy services, working practices and online support to meet the public’s expectations for a modern NHS.”

Two weeks ago, I announced two initiatives that will proceed in advance of the King’s Fund report. From 1 December, phone calls made to NHS 111 for urgent repeat prescriptions will be directed not to an out-of-hours GP service as at present but to a community pharmacy. This will amount to some 200,000 calls a year, resulting in further revenue streams, for the consultations and for supplying the medicine. NHS England has also committed to encouraging national coverage of a locally commissioned NHS minor ailments service. Some areas, including West Yorkshire, already do this, and we will roll it out to the whole country by April 2018. Both those initiatives will relieve pressure on surgeries and emergency care centres. Both will result in additional incremental revenue for pharmacies, but they are very much only the start.

[Norman Lamb (North Norfolk) (LD)]

Does the Minister accept the view expressed in the impact assessment that independent pharmacies, which are often micro-businesses, and small chains of up to 20 pharmacies will be at a higher risk of closure than the larger chains?

[David Mowat]

In terms of these proposals, we have to be blind to the ownership of pharmacies. The fact is that the average pharmacy sells for something like £750,000. I do not accept that the proposals will cause closures in those segments, if that was the thrust of the right hon. Gentleman’s question.

[Several hon. Members rose—]

--- Later in debate ---

[David Mowat]

I want to continue.

The third area I wish to address is value for money, and I make no apology for doing this. According to recent OECD analysis, the UK now spends above the OECD average on healthcare, but however much money we spend, every penny needs to be spent as efficiently as possible. If that does not happen, waiting lists can become too long, treatments can be denied to patients and drugs might not be available. We also know that efficiency savings are required of every part of the NHS, and community pharmacy must play a role in contributing to the £22 billion of savings that we need to find. I do not apologise for that.

[Dr Murrison]

I certainly support the amendment on the Order Paper today, but does the Minister agree that, in relation to efficiencies, the issue of category M clawback is an important one? I tried to extract an answer to that question from the hon. Member for Leicester South (Jonathan Ashworth) earlier. Also, I ask the Minister to think again about the ownership-blind point that he just made. There is not an equal playing field at the moment, and there is a real risk that small independent pharmacies will continue to be done in.

[David Mowat]

I do accept that point. We are working on the category M clawback, and I hope to be able to make some progress on that matter soon.

[Claire Perry (Devizes) (Con)]

If anybody can square this circle, it is the Minister, given his extensive experience in this area. I genuinely believe that we have to sort out this issue. I am not happy to subsidise large private companies through the system—some of the chains have already been mentioned—so it is right to look at where the clusters occur. The Minister is well aware of the Kennet pharmacy in my constituency, and we all have really value-added pharmacies that are doing very valuable work. How can we help him, over the review period, to identify and support the services that those pharmacies provide? They must not be allowed to close as a result of this policy.

[David Mowat]

I agree with my hon. Friend. I have set out the work that we are doing, and the fact that we are providing more money for services, over and above all the money involved in the cuts and efficiency savings that we have had to make, will help that process.

[Dr Sarah Wollaston (Totnes) (Con)]

Further to that point, the Minister knows that our pharmacists are a highly skilled and professional resource that has long been underused in the NHS. He has mentioned the ongoing Murray review, and a sustainability and transformation plan process is also going on around the country. My concern is that the closures will come about in a random way, rather than through a planned process based on identifying skills in particular areas. Will he consider delaying them until we have all the reports in place and we can consider the matter on an area-by-area basis?

[David Mowat]

The access scheme is the device that will ensure that pharmacies are not closed in a random way. I want to address the point about closures head on. It is my belief that there will be a minimal number of closures. The impact analysis talks about 100 and it models 100. The average pharmacy has a margin of 15%, and the amount of efficiency savings that we are asking pharmacies to make over two years is 7%. In addition, the average pharmacy is trading for £750,000 when it closes or merges, even after we announced these efficiency savings a year ago. That value is being retained.

[Jonathan Ashworth]

The previous Minister put a figure on this. Will the hon. Gentleman tell us what he means by a “minimal” number of closures? What is the number?

[David Mowat]

These are private businesses, each with a different business model and a different amount of income from the NHS, from other retail activities and from services. Each is financed in a different way. Indeed, 30% of them are owned by two public companies, and 70% of them are multiples.

[Victoria Borwick (Kensington) (Con)]

Can reassurance be given that local pharmacies are the frontline of primary care? Will the Minister extend the work and responsibility of those local pharmacies, particularly in deprived areas, and reassure us that that is the focus of this debate?

[David Mowat]

I spoke to 500 pharmacists this morning and gave them that precise reassurance. The changes that we are making to transform the sector into a service-based, not dispensing-based, economy will do just that. That is where pharmacies need to go and it is where they want to go. Frankly, it has taken too long.

[Several hon. Members rose—]

[David Mowat]

I need to make some progress. I will give way in a moment.

At present, the average pharmacy receives NHS income of £220,000 a year, which is based on throughput of £1 million from the NHS. That translates into a value of the order of £750,000 for each pharmacy. When pharmacies merge or are sold, that is what they are traded for and the changes will not make a significant difference.

Returning to an earlier point, 40% of all pharmacies are located within a 10-minute walk of at least two others. Instances exist of a dozen or more pharmacies located within half a mile of each other. As I noted earlier, each one will most likely be receiving £25,000 a year just for being there.

[Jonathan Ashworth]

Has the Minister been to Leicester?

[David Mowat]

I was brought up on the outskirts of Leicester, so I am delighted to tell the hon. Gentleman that I have indeed been there. Giving all these clusters £25,000 of national health service money is not the best way to spend precious resources.

In addition, the extra services that pharmacies will choose to provide, such as winter flu jabs and public health services, are commissioned separately and will be unaffected by the reset. For example, 600,000 flu jabs have been given in community pharmacies this year—more than all of last winter.

[Several hon. Members rose—]

--- Later in debate ---

[David Mowat]

I need to make progress.

[Mr Speaker]

Order. I think it is fair to say that the Minister is being what I would call—if it does not sound a contradiction in terms—courteously harangued to give way, but it is perfectly evident to me that he is not giving way at the moment. Members will therefore have to exercise their judgment as to the frequency with which they make further attempts.

[David Mowat]

I will continue to make some progress and then give way towards the end of my remarks.

I do not want to downplay the impact of the change on the private businesses that own and operate the network. The pharmacy sector is a mixed economy with 70% of the market made up of multiples and chains and 30% owned by independents. It is hard to accurately predict the impact of the changes on those individual business models. What I can say, however, is that the savings we are making will be entirely recycled back into the NHS. Every penny of the efficiency savings that we are asking of community pharmacies will be spent on better patient care, better drugs and better GP access.

[Norman Lamb]

I am grateful to the Minister for giving way. I totally understand the importance of trying to get as much bang for your buck from pharmacy services, but does this not actually amount to a significant cut in spending on preventive services? That seems completely counter to the Government’s aim.

[David Mowat]

When one takes into account the £112 million that we are spending on getting more pharmacists into GP practices, the right hon. Gentleman’s point is incorrect.

[Luciana Berger]

Will the Minister give way?

[David Mowat]

I will give way to the hon. Lady in a moment.

Finally, I want to talk about the work that we are doing to ensure that everyone in the country has access to a community pharmacy. We have developed a scheme with two components. First, all pharmacies that are more than 1 mile from another pharmacy will be eligible for additional funding, which will almost entirely mitigate the impact of the changes. That component is specifically designed to protect areas where current provision is quite spread out. In total, it will apply to around 1,400 locations—roughly half urban and half rural. Pharmacies that are in the highest 25% by prescription volume, and therefore most profitable, will not be eligible for the scheme. Secondly, there is a near-miss scheme under which pharmacies that are located up to 0.8 miles from each other and in the 20% most deprived areas in the country can apply to be reviewed by NHS England as a special case. The final safeguard is that NHS England has a continuing duty to ensure the adequate provision of services. Its role is to commission a new pharmacy in any area where it believes access is inadequate. That duty will continue.

[Luciana Berger]

I thank the Minister for very kindly giving way. Will he correct the record on something? Pharmacies are not all private enterprises. Many co-operatives across our country provide community pharmacies, often in rural and isolated areas. For the purposes of this debate, will he clarify his understanding of the distinction between a community pharmacy and a GP pharmacy? That has not been clear in his remarks so far.

[David Mowat]

The distinction is that a community pharmacy is part of a privately owned business that dispenses and is paid in that way. The ones that we are hiring into GP practices will leverage GP time and do medicine reviews, and I expect them to enable the pharmacy network in an area to work more cohesively. It is a welcome and, frankly, overdue step forward.

[Several hon. Members rose—]

[David Mowat]

I need to continue.

Taken as a whole, I am confident that the three measures I have talked about for protecting access will ensure that everyone has access to a community pharmacy in much the same way as they do at present. The future for pharmacy is bright. The change we are implementing of a 7.4% efficiency requirement over two years is proportionate and will continue to orientate the profession towards services and—for the first time—quality and away from a remuneration model based on dispensing.

I will finish by again quoting the chief pharmacist, who said:

“The public can be reassured that while efficiencies are being asked of community pharmacy just as they are of other parts of the NHS, there is still sufficient funding to ensure there are accessible and convenient local NHS pharmacy services across England. The NHS is committed to a positive future for pharmacists and community pharmacy.”

Every penny that we save as a result of the efficiency reviews will be spent within the NHS on better care, better drugs and on quicker treatment. I urge Members to support the amendment later today.