This chapter is concerned mainly with the provisions governing the opening of a pharmacy and the application for an NHS contract in an urban area. The rural dispensing arrangements are dealt with in Chapter 4.
Legislation places an obligation on the NHS Commissioning Board (NHS CB) to put arrangements in place so that drugs, medicines and listed appli- ances ordered via NHS prescriptions can be supplied to persons.
However, as noted below, pharmacies have no automatic right to supply prescriptions through the NHS. Applications to do so must be made according to the rules, and contracts are only granted when certain criteria are met.
Neither this chapter nor the one on rural dispensing arrangements is intended to give a step-by-step set of instructions on how applications should be made or how they are processed. Instead we aim only to outline the procedures.
The opening of a new pharmacy is subject to a number of controls. The law on the subject is complex and contained in Acts of Parliament, Regulations and case law from the courts.
PROFESSIONAL AND MEDICINES ACT CONTROLS
One set of controls relate to professional matters. They derive from the Medicines Act 1968 and from the law governing the profession of pharmacy.
These are dealt with in Chapter 9.
NHS CONTRACT CONTROLS
The other set of controls relate to the granting of an NHS contract. A phar- macy may open without an NHS contract although such pharmacies are few in number.
HISTORY OF CONTROL OF ENTRY TO NHS PHARMACEUTICAL LISTS
Until 1983 an application to dispense NHS prescriptions in a pharmacy was auto- matically granted. Since 1983 there have been a number of restrictive measures.
In 1987 amending regulations introduced a system of control to link the number of persons included in a pharmaceutical list as closely as possible to the need of the local population for reasonable access to the full range of NHS pharmaceutical services (PS). A new contract was only to be granted if it was
‘necessary or desirable’ to secure adequate provision in the neighbourhood.
In 2003 the Office of Fair Trading published a report ‘The Control of entry regulations and retail pharmacy services in the UK’ which recommended abo- lition of the statutory controls on entry in order to increase competition.
The government decided not to implement the proposals in full, but intro- duced a package of changes in the 2005 Regulations designed to increase com- petition whilst retaining controls on entry.
THE 2013 CHANGES
In 2012 the rules for entry and for making applications were changed again.
The old test has been replaced by a new one based around needs or benefits identified in the relevant ‘pharmaceutical needs assessment’ (PNA).
The test is set out in s129 of the NHS Act 2006 (as amended) and the details of how this is to work are in the NHS (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013SI No. 349. These Regulations replace both the 2005 Regulations and their amendments and the short-lived NHS (Pharmaceutical Services) Regulations 2012 which took no account of the passage of the NHS and Social Care Act 2012.
The new Regulations came into force on 1 April 2013. They run to 227 pages. Their predecessor Regulations had 15 sets of guidance to accompany them. New guidance was not available at the time of writing this section.
PROBLEMS WITH TERMINOLOGY
The 2012 Regulations were published after the Health and Social Care Act 2012 had been passed by Parliament. However, they came into force prior to most of that Act taking effect. The 2012 Act changes the structure of the NHS in a number of ways. As a consequence there will need to be legislation amending terms in several Regulations.
We have endeavoured to anticipate those changes to make it easier for this textbook to remain useful for some time. In particular an assumption has been made that the NHS CB will take over certain duties assigned to the Primary Care Trust (PCT). According to the Department of Health, from 1 April 2013, the NHS CB is expected to take over administration of the NHS (PS) Regulations 2012 as part of the implementation of the Health and Social Care Act 2012. The exception to this is that responsibility for the development and updating of PNAs transfers to local authority Health and Wellbeing Boards.
With the passing of the 2013 Regulations we have attempted to correct the text to match the 2013 Regulations.
EXERCISE OF FUNCTIONS BY THE CB
By virtue of the new section 168A of the NHS Act 2006:
(1) The Secretary of State may direct the NHS CB to exercise any of the Secretary of State’s functions relating to services that may be provided as PS, or as local pharmaceutical services (LPS), under this Part.
The amendments to Subsection (2)(c) provide that the NHS CB is to be responsible for determining applications for market entry in England (inclu- sion in the pharmaceutical list or additional premises) in line with the relevant PNA as prescribed in regulations.
THREE TYPES OF PROVIDER
There are three types of ‘contractor’ who may provide NHS PS.
● Firstly, and in the great majority of cases, these services are provided by
‘pharmacy contractors’.
● Secondly, a more limited range of PS may be provided by ‘appliance con- tractors’ who may only supply appliances (e.g., incontinence aids, dress- ings, bandages) but not medicines.
● Thirdly, ‘dispensing doctors’ are authorised to dispense to patients who live in designated rural areas a distance away from pharmacies.
They have to be on a dispensing doctor list kept by the CB.
Most NHS community PS in England are provided by pharmacies on the basis set out in the 2012 Regulations and are referred to as PS.
‘LPS’ are now governed by the NHS (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013 (the 2013 Regs).
THE PHARMACEUTICAL LIST
The NHS CB must keep ‘pharmaceutical lists’ of persons who undertake to provide PS. The lists are of:
(a) those who provide drugs (pharmacies) (b) those who provide appliances.
Each list contains the name and address of the contractor and the hours at which the service is provided. The list of pharmacies must also indicate whether or not the pharmacy has undertaken to provide ‘directed services’.
CONTROL OF ENTRY TO LISTS
The 2012 Regulations make new arrangements to control the entry of con- tractors or additional contractor premises onto pharmaceutical lists. The
‘control of entry’ test as set out in the 2005 Regulations, which was based on whether new premises were ‘necessary or expedient’ to provide services for a
particular neighbourhood, has been replaced by a new market entry test. This is based around needs or benefits identified in the relevant PNA.
PHARMACEUTICAL NEEDS ASSESSMENT
A PNA is the statement of the assessment each Health and Wellbeing Board must make of the needs in its area for community PS provided as part of the NHS by all types of contractor. The PNA must describe the population profiles and local characteristics as well as providing an assessment of unmet needs for, and possible improvements and better access to, PS provision in the area.
This will enable the CB to determine applications for new entries (or cer- tain other applications such as subsequent relocations) to the pharmaceutical list by reference to the relevant PNA.
Inevitably, it will not have been possible during the formulation of the PNA for every need and benefit to have been foreseen.
Therefore, the Regulations also allow for applications to be approved where applicants can demonstrate, in specified circumstances, that their appli- cation will bring ‘unforeseen benefits’.
A successful applicant will need to show that the application will meet a gap in services identified in the PNA for the area.
Alternatively the applicant must demonstrate that its pharmacy would secure improvements or better access to services listed in the PNA or which were not foreseen when the PNA was drafted.
Detailed Information in the PNA
The detailed information which must be in the PNA is set out in Schedule 1 of the 2012 Regulations:
It must relate to all the PS that may be provided under arrangements made by the NHS for:
(a) the provision of PS (including directed services) by a person on a phar- maceutical list;
(b) the provision of LPS under an LPS scheme; or
(c) the dispensing of drugs and appliances by a person on a dispensing doctors list.
The statement must:
● identify the current provision of services which are necessary to meet the need for PS in its area, and
● list the gaps in provision.
It must also
● identify services which have secured improvements to or better access to PS in that area.
Such services may not have been necessary to meet the need for PS in the area. Such services may be provided inside or outside the area.
There must be an explanation of how the assessment has been carried out, and a map of the area must be included.
Each Health and Wellbeing Board must include a map in its PNA and, in so far as is practicable, keep it up to date.
New Market Entry Test
The market entry test describes the system whereby the NHS CB assesses an application that offers to:
● meet an identified current or future need or needs in the PNA;
● meet identified current or future improvements or better access to PS in the PNA; or
● provide unforeseen benefits, that is applications that offer to meet a need that is not identified in a PNA but which the Board is satisfied would lead to significant benefits to people living in the area.
Exceptions to the Market Entry Test
The main control of entry test is subject to exemptions in respect of new own- ership of existing pharmacies and ‘distance selling’ pharmacies, referred to as
‘excepted applications’.
APPLICATIONS TO NHS CB
Anyone who wishes to operate an NHS pharmacy, to open additional or new premises or to change the services which are provided must apply to the NHS CB.
Applications are divided into two categories:
(1) Routine applications (2) Excepted applications.
Routine Applications
Routine applications are defined in Regulation 12. A ‘routine application’ is any application, other than an excepted application, by a person:
(a) for inclusion in a pharmaceutical list who is not already included in it; or (b) who is included in a pharmaceutical list and who is seeking:
(i) to open, within the area of the PCT whose list it is, additional prem- ises from which to provide the same or different PS;
(ii) to relocate to different premises, and at those premises to provide the same or different PS;
(iii) to provide, from the person’s listed chemist premises, services that are in addition to those already listed in relation to that person.
Information to Be Given in the Application
Any application must contain the information which is set out in Schedule 2 of the 2013 Regulations.
● PNA in whose area the proposed premises will be;
● the type of application being made;
● a statement of whether the application is a routine or an excepted application;
● the name and address of the applicant;
● GPhC registration number if the applicant is a sole trader;
● GPhC number of each partner if the applicant is in a partnership;
● GPhC registration number of the superintendent pharmacist for a body cor- porate applicant;
● the address of the premises or the best estimate of where the proposed premises will be;
● whether the applicant is currently in possession of the premises;
● the proposed core opening hours for the premises; and
● the total proposed opening hours for the premises (i.e., both core opening and supplementary opening hours);
● details of the directed services to be provided;
● confirmation that the applicant is accredited to provide the services, where the PCT requires such accreditation;
● confirmation that the premises are accredited in respect of the provision of services, where the PCT requires such accreditation;
● where relevant, a floor plan showing the consultation area where the appli- cant proposes to offer the directed services, unless one cannot be provided for reasons that the PCT accepts as good cause, for example the premises are not in the applicant’s possession.
The applicant must confirm whether the application is a routine or an excepted application (paragraph 1(3) of Schedule 2). The applicant can- not switch between the two types of application once it has been made to the NHS CB. Should the applicant wish to change the type of application, the first application must be withdrawn and a second application submitted, along with the relevant fee.
Fitness to Practice Information
Applicants not already on the list are required to provide information to enable a decision on fitness to practice to be made. It includes information on:
● the individual making the application; or
● where it is a partnership, each partner; or
● where it is a body corporate, the director(s) and any superintendent pharmacist.
Specific Grounds for Refusal or Deferral of Routine Applications (1) Fitness to practise grounds (Regulation 33(i))
(2) Failure of European Economic Area (EEA) qualified pharmacist to meet required language ability (Regulation 30)
(3) Where the relevant premises are designated under Regulation 4 of the LPS Regulations or are located within a designated area (Regulation 32) (4) Where the premises to which the application relates are already on the
list (Regulation 31)
Granting a Routine Application to Meet Current Need
A successful applicant will need to show that the application will meet a gap in services identified in the PNA for the area (current need).
Current Need
Routine applications to meet current need may only be granted if the NHS CB determines that granting it, or granting it in respect of only some of the ser- vices specified in it, would meet a current need:
(a) for PS, or PS of a specified type, in the area; and
(b) that has been included in its PNA in accordance with paragraph 2(a) of Schedule 1 of the 2013 Regulations.
Matters to Be Considered
Where the NHS CB receives a routine application to meet the current need identified within its PNA and:
● granting it would meet that current need for PS in general or specific PS in particular; or
● granting it in respect of some of the PS that the applicant is offering to provide in order to meet that current need for PS in general, or specific PS in particular.
Section 129 (2A) of the 2006 Act requires the Board to consider and be sat- isfied about certain matters set out in Regulation 13.
The NHS CB must have regard to whether it is satisfied that it would be desirable to:
(a) consider all current need applications together; (Regulation 13(2)(a)) (b) consider another current need application at the same time; (Regulation
13(2)(b))
(c) await the outcome of a pending appeal; (Regulation 13(2)(c)) The NHS CB must also have regard to whether:
(d) there have been changes to the needs since the publication of the PNA such that refusing the application is essential in order to prevent signifi- cant detriment to the provision of PS in its area; (Regulation 13(2)(d))
(e) granting the application would only meet the current need in part, and if the application were granted, it would be unlikely, in the rea- sonably foreseeable future, that the remainder of that need would be met; (Regulation 13(2)(e))
(f) granting the application would only meet the current need in part; but it considers that, if the application were granted, it would not be unlikely, in the reasonably foreseeable future, that the remainder of that need would be met; (Regulation 13(2)(f))
(g) the current need was for services other than essential services, and grant- ing the application would result in an increased availability of essential services in the area; (Regulation 13(2)(g))
(h) since the publication of the PNA, the current need has been met, or is due to be met, by another person providing services from listed chemist prem- ises or LPS premises; (Regulation 13(2)(h))
(i) the application needs to be deferred or refused by virtue of any provision of Parts 5–7. (Regulation 13(2)(i))
Part 5 of the 2013 Regulations sets out specific grounds for refusal or defer- ral of applications under Parts 3 and 4 which are not linked to fitness grounds.
Part 6 sets out specific grounds for refusal, deferral and conditional inclu- sion in pharmaceutical lists of chemists on fitness grounds.
Part 7 sets out specific rules for governing areas that are controlled locali- ties and reserved locations and for determining applications for new pharma- cies within them.
When Is a Need Due to Be Met A need is due to be met if:
(a) the person undertaking to meet that need is entitled to give a notice of commencement, as a consequence of which he or she will be able to com- mence the provision of services to meet that need, but has not yet given that notice; or
(b) the person has entered into an LPS scheme, as a consequence of which he or she will be able to commence the provision of services to meet that need, but has not yet done so.
Granting an Application to Meet Unforeseen Benefits
Inevitably, it will not have been possible during the formulation of the PNA for every need and benefit to have been foreseen.
The Regulations therefore allow for applications to be approved where applicants can demonstrate that their application will bring unforeseen bene- fits. The applicant must demonstrate that its pharmacy would secure improve- ments or better access to PS which were not foreseen when the PNA was drafted (unforeseen benefits).
The NHS CB may grant an application if it is satisfied, having regard to the PNA and to any matters prescribed by the Secretary of State in the regulations, it is satisfied that to grant the application would secure improvements or better access to PS in its area.
Refusal of Routine Applications That Are Based on Neither a PNA nor an Unforeseen Benefit
A routine application to which Regulation 19(6) does not apply can only be granted if that would:
(a) meet a current or future need for PS, or PS of a specified type, in its area that has been included in its PNA; or
(b) secure (including in the future) improvements, or better access, to PS, or PS of a specified type, in its area that have or has been included in its PNA.
The application may also be granted notwithstanding that the improve- ments or better access were or was not included in its PNA, provided the pro- posed service would confer significant benefits on persons in its area which were not foreseen when it published its PNA.
Notification of Application Which Has Not Been Summarily Refused
The Board must notify a list of persons (Schedule 2):
● the relevant LPC;
● the relevant Local Medical Committee (LMC);
● any person in the pharmaceutical list whose interests might be significantly affected if the application were granted;
● any person whose application has been granted but is not (yet) included, and whose interests might be significantly affected if the application were granted;
● any LPS chemist in the area whose interests might be significantly affected if the application were granted;
● any LINk for the area, and any other patient, consumer or community group in the area (e.g., Parish and Town Councils) which has a significant interest in the outcome of the application;
● any dispensing doctor in a controlled locality within 1.6 km of the prem- ises who the PCT believes has a significant interest in the outcome of the application.
Excepted Applications
The main control of entry test is subject to exemptions, particularly in respect of existing pharmacies and ‘distance selling’ pharmacies. Excepted applica- tions do not have to be assessed in the way that routine applications are: