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Supply, demand, consequences

Pharmacies shut when they should be open. Patients in tears. It’s time to serve Breach Notices on repeat offenders

By Outsider

I went for a walk this morning before settling down to write this. I walked for two miles then did a rough circle of about six miles. Within that six mile circuit sat nine community pharmacies: two supermarkets, five vertically integrated multiples (of two different flavours), one mid-sized multiple and an independent. 

It was a weekday morning. Two of the nine were providing no service because they had no pharmacist. One was a multiple with a late sickness call, waiting for an emergency locum to arrive; the other was a supermarket pharmacy that had not been open for a week. 

There has been noise on social media and in the trade press of a dispute between the PDA and some CCA companies about pharmacists being booked and then the rate being renegotiated down prior to the shift, or the booking being cancelled. That’s up in the clouds somewhere. I’m on the ground. 

I spent years working for a vertically integrated national multiple. I loved it, until I didn’t. It’s a structured environment, with rhythms and beats, like a familiar tune. You soon learned that after Christmas, about a week into the January sales, someone at head office would figure out if it was going to be a good year or a bad year. If it was a good year, there would be a stern message sent out. You must not spend anything else on overtime, expenses, that sort of thing. If it was going to be a bad year, the message was harsher – much harsher. 

Financial controls are important in any organisation, and when they’re breached, remedial action needs to be taken.  On one side of this current spat, we have business owners – pharmacy contract holders – who argue that the cost of locum cover is excessively expensive. Some appear to have taken a hard line and ‘reset’ the locum rates they are prepared to pay. 

“My six mile circuit is not unique. You can see this situation repeated across the country”

Inflation has two sides – supply and demand. The CCA would argue that there isn’t the cash on the demand side of the community pharmacy economy to cover these inflated rates. If this is true, we’re experiencing a supply shock – similar to what has happened with high end computer chips and car manufacturers. Sit tight and it will rebound to normal. Contractors will be able to pay the rates they think are right in a few weeks or months. 

Pharmacists clearly think differently. They’re a valued commodity and they can get better money elsewhere. The ‘reset’ pay rates are 30 to 40 per cent less than they perceive the market rate to be. Stuck in the middle is a community pharmacy service failing its patients. Patients with half-dispensed controlled drug prescriptions. Patients whose prescriptions have been downloaded but can’t be returned to the spine. Patients in tears. 

NHS England – the commissioner – has a responsibility to sort this out. When a community pharmacy is not very good at providing CPCS or flu vaccinations, NHS England might serve them with a Remedial Notice – a warning, with action points to improve. When the pharmacy fails to provide any service at all, that can’t be remediated, they are simply in breach of their NHS contract. 

What then for the two pharmacies on my walk this morning? The one that was closed because of a short notice cancellation had the defence that it was outside its control. It had scrambled to provide cover and presumably paid through the nose. NHS England may do an informal investigation and if it doesn’t appear to be a symptom of a wider issue will leave it at that. 

For the other pharmacy, the one that looks like it’s refusing to pay market rate, things are different. It should be given a Breach Notice. It’ll cost the contractor about £300 and comes with a threat that if it repeats the same failure, it could lose its NHS contract. This contractor is repeatedly choosing to breach its contract by not paying market rates. Where is NHS England? 

My six mile circuit is not unique. You can see this situation repeated across the country – but I bet you’ll find the same two or three contract holders responsible for the majority of breaches of contract. It’s inconceivable to think that they have not already been through some process for breach of contract. NHS England now needs to test where the real inflationary pressure sits.  

This circuit of nine seems perfect – there will be no patient access issues.  Even where there is, the regulations allow for re-provision through a new provider.

It’s time to take these repeat offenders to market exit. A breach costs £300 and is a little embarrassing for those that care to notice. Remove their NHS contracts – an asset worth six figures on their balance sheets – and we’ll see whether it really is a supply side issue or a demand side one. 

Outsider is a community pharmacist

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