My Lords, I am pleased to move Amendment 23, in the name of my noble friend Lady Thornton, and to support Amendment 29, in the name of the noble Lord, Lord Clement-Jones.
Our amendment is a probing amendment, which has two aims. First, it provides us with the opportunity to hear from the Minister why the Government consider that the extensive delegated powers on the hub and spoke model for pharmacies are needed at this present time under the Bill, rather than ensuring that any such proposals are instead contained in future planned and well-thought-out primary legislation—properly consulted on and worked through—that amends existing legislation and regulations.
Secondly, we understand that there has been some discussion with key stakeholders in the pharmacy industry since the Government’s intentions were revealed in the nine short paragraphs on dispensing medicines in the impact assessment for the Bill—as we know, hub and spoke dispensing centres are not referred to on the face of the Bill. Today is an opportunity for the Minister to update us on the Government’s response to the concerns and issues raised by MPs in the Commons and by noble Lords during the Bill’s Second Reading, and in representations from leading industry organisations, including the National Pharmacy Association and the Pharmaceutical Services Negotiating Committee.
We need far greater clarity on what exactly is proposed, how the Government intend to take all this forward and how the very limited proposals that we have heard so far fit into the NHS long-term plan vision for the transformation of community pharmacy as an integral part of local primary care. How will pharmacists’ enhanced role in the future limit the number of people who will not have to see their GPs, in the way that the Government envisage?
Amendment 23 would amend Clause 2, on the “Manufacture, marketing and supply” of human medicines, and would delete the Secretary of State’s power to make provision for the distribution of human medicines by wholesale dealing, as is proposed for hub and spoke dispensing in the delegated powers proposed in the Bill. I have deep concern about the extensive range of delegated powers proposed under the Bill, and I support the decisive views of both the Delegated Powers Committee and the Constitution Committee on this matter, which have been made crystal clear by my noble friend Lady Thornton at all stages of the Bill. Major changes such as those envisaged for the community pharmacy sector through the extension of hub and spoke dispensing should be on the face of the Bill, with appropriate safeguards on their development, including a full public consultation.
The impact assessment tells us that
“dispensing needs to become more efficient to free up pharmacists’ time for other activities”
and that this will be achieved if all pharmacies have access to more efficient hub and spoke dispensing. We strongly support the aim of freeing up pharmacists’ time, better use of the skill mix in pharmacies, extending prescribing duties for pharmacists and a greater role in
clinical service delivery. We also fully acknowledge the work, expertise and development of the hub and spoke models, including automated prescription assembly facilities—PAS facilities—operated by the large pharmacists, such as Lloyds Pharmacy, within their community retail pharmacy operations.
The impact assessment acknowledges the scale, substantial up-front and running costs and slow timetables of setting up and then operating hub and spokes efficiently and effectively, which are in reality way beyond local groups of pharmacies not part of nationwide businesses to fund and operate. In a moment of understated frankness, the IA admits:
“The costs and benefits remain uncertain, as do some details around the policy design, and the changes would be provided for by regulations made under the Bill.”
The Minister will know that the NPA has serious doubts about the suggested economic efficiency of the hub and spoke model, particularly in light of the impact assessment’s uncertainty. Under the five-year community pharmacy contractual framework agreement, the PSNC is tasked with the role of agreeing hub and spoke models which will allow the sector to benefit fairly. Can the Minister explain to the Committee how it is envisaged that hub and spoke models will be able to operate to ensure that the arrangements are fair to all pharmacies?
The NPA has stressed that, without a level playing field, competition and choice in the pharmaceutical wholesale market could be reduced by the pressure to set up or join hub and spoke arrangements. The resilience of the medicines supply system could be impacted, and medicine prices could rise as a result. As the NPA says, huge barriers will need to be overcome to make any model fair and appropriate for independents, including the risk of introducing new process errors, lack of clarity on the ownership of problems between the hub and spoke, longer lead-in times and impact on procurement margins—essentially, a reduction in system resilience and problems caused by restrictive distribution arrangements.
The impact assessment stresses that the proposed regulatory change is intended to be entirely permissive, with pharmacy businesses developing hub and spoke arrangements only where they deemed it would be
“beneficial for them to do so”.
Paragraph 255 sets out three types of hub and spoke arrangement that could be entered into, underlying the complexity of the range of models and reinforcing the need for greater consideration and thought to be given as to how further hub and spoke models could be introduced.
The Company Chemists’ Association, the trade body for large community pharmacy operations, which include Boots, Lloyds, Asda, Morrisons, Tesco and Superdrug, has expressed particular concern at hub and spoke models being introduced through secondary legislation and stressed the importance of extensive consultation with the industry—in fact, the consultation on the future of the industry began in 2016 but has yet to be concluded. When and how will consultation on this vital matter, which sees the most significant changes to pharmacy in decades, commence?
The Minister has rightly praised the contribution of independent pharmacies, particularly during the Covid pandemic. However, we know that, before Covid, more than half reported operating at a loss, a situation greatly exacerbated by Covid and extra costs, which led to their income decreasing while their role in the community became more important than ever, working long hours with often reduced staffing numbers, providing advice and support and supplying medicines. In rural areas, such pharmacies have always played a key role as often the only source of information and advice as well as of prescriptions and medical equipment. During Covid, in many areas they were and are the only primary healthcare professionals that patients can still see in person. What progress has been made in the discussions with the sector about additional funding on Covid costs? The £370 million provided in July was an advance payment to an already struggling industry rather than new money. Can the Minister place on record how much additional funding has been provided? My noble friend Lord Hunt will expand on this issue of funding community pharmacies and the wider pharmaceutical industry in relation to the price regulation scheme.
I want briefly to express support for Amendment 29 in the name of the noble Lord, Lord Clement-Jones, which would place a duty on the Secretary of State to consult the pharmaceutical, wholesale and pharmacy sectors and their regulators on an agreed framework for the safe transfer of patient data, prescription information and dispensed products between separate hubs and spokes. This and other provisions in the amendment would provide some vital safeguards if hub and spoke models are developed in future secondary legislation. We strongly support the noble Lord’s approach.
As I stressed earlier, the nine paragraphs of the impact assessment do not represent a strong or coherent case for moving forward at this time under the secondary legislation enabled by the Bill. Instead, they demonstrate the need for more thought, analysis and development of proposals for the future delivery and transformation of pharmacy services, with full involvement of and consultation with the industry, including on extending hub and spoke models. That would ensure a fair and level playing field and the survival of the independent local community pharmacies so valued by patients and their families and carers. I beg to move.