By Outsider

When was the last time you read Scottish philosopher Adam Smith’s 1776 treatise The Wealth of Nations? What about the riposte by English economist and philosopher William Forster Lloyd in his 1833 essay The Tragedy of the Commons? Never read the recommendations of Jerome Weisner and Herbert York, two of the scientific advisers to Presidents Eisenhower and Kennedy at the height of the Cold War?

Have I gone mad? Possibly, but that’s not my story to tell. Having had the good fortune not to work Maundy Thursday I decided to broaden my reading, and my interest in root cause analysis took me on a philosophical route.

The Pharmaceutical Services Negotiating Committee and the Government recently announced that they have finally entered negotiations around the funding and framework of the community pharmacy contract. This can only be a good sign, given recent history.

You only need to read the news to understand that community pharmacy could help fix a lot of primary care’s capacity issues – along with contributing more to the wider NHS strategy.  

In its announcement, PSNC stated that it expects a referral to pharmacy scheme for minor ailments to feature heavily in the negotiations, something that comes as no surprise with the pilots of DMIRS ongoing. But it takes a lot of minor ailments consultations to replace lost dispensing revenue, so what about the financial meat of the contract – dispensing?

And so to philosophy. The Wealth Of Nations brought to widespread prominence the collected theories of free market trade and minimal regulation. Smith reasoned that the self-interests of those in the market meant that they wouldn’t abuse their position and break it, as to do so would lead to self-ruin. As a counter, Lloyd argued that any community with open and unregulated access to a common resource will soon realise that the individual has no disincentive to take more than their fair share, resulting in over exploitation and tragedy as the system breaks down.

It’s 2019, and we find ourselves struggling with a contract negotiated and agreed in 2005. In the 15 years since, a lot has changed for our sector and in its relationship with the wider NHS.  No longer do we operate in a world of competitive full-line wholesaling and plurality of supply. The widespread consolidation of the medicines manufacturing and supply chain since 2005 has fundamentally changed the market economics. The commissioning of services has fragmented. Yet we see unprecedented demand for our services. In 2018, prescription volume was more than 50 per cent higher than in 2005, while retained margin per item was down to 70 per cent of the level when the model was agreed.

Lloyd reasoned that without regulation or other form of restriction, a truly free market is always open to abuse due to free will. It seems we have reached that point now. With supply chain issues leading to exceptional levels of concessionary pricing, this breakdown in free market competition cost the NHS in excess of £165 million last year.

And that brings me back to our two presidential advisors – how do you solve the problem? At the height of the Cold War, the USSR and the USA engaged in a heated arms race, building bigger and smarter bombs. But at each advance, instead of finding their security increased, they realised it was diminished. In a highly controversial move, Weisner and York recommended the USA support the proposed ban on nuclear arms testing. They realised that the underlying cause of the Cold War would never be solved by trying to get bigger and better than your rival. To chase that end, would, as Lloyd had earlier reasoned, result in tragedy for all. A technical solution wasn’t possible. The resolution lay only in a fundamental change in attitude.

That type of change is what we need to embrace as a sector, with PSNC at the vanguard. The existential crisis we face with increasing volume and decreasing remuneration can’t be solved by a communal race to the bottom. Endlessly chasing lower costs or higher volumes will end with us in our own tragedy of the commons. There is no technical solution. Yes, automation, scale and efficiency have their place, but the resolution lies elsewhere. In a change of mindset. A change in philosophy, if you may.

Outsider is a community pharmacist