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MODERNISING NHS COMMUNITY PHARMACY IN SCOTLAND

SECTION 8: PARTIAL REGULATORY IMPACT ASSESSMENT

Purpose and intended effect

8.1 To modernise and redesign community pharmacy services in Scotland with an overarching aim to improve patient care and the health of the public and to better utilise the skills of community pharmacists and their support staff to meet locally identified needs.

8.2 The objective is to secure a legislative framework that will support implementation of the community pharmacy issues detailed in the Executive’s strategy for pharmaceutical care, The Right Medicine. Legislation is required to enable implementation of New Contract arrangements for community pharmacies and address associated issues around the planning and delivery of pharmaceutical care services.

Risk Assessment

8.3 The Executive’s strategy The Right Medicine called for a range of actions with specific regard to community pharmacy, many of which are expected to be delivered within the context of the New Contract that is currently being discussed. The current legislative framework (see Section 1) can accommodate some but not all of the required changes. The risk of not securing the necessary legislative framework is, therefore, that the sought for service benefits that the strategy seeks for patients and community pharmacists alike will not be fully deliverable.

Options

8.4 Three options have been identified:

• Option 1 – do nothing, i.e. maintain the current system
• Option 2 – implement changes in so far as they can be accommodated within the current legislative and administrative framework
• Option 3 – amend the current primary and secondary legislation to allow full implementation of the policy proposals

Benefits

8.5 Option 1: No change. Under this option the status quo continues with the skills of the pharmacist remaining under utilised and with little or no opportunity to secure added patient benefits. Whilst 90% of the public find the location of their pharmacy convenient²¹, there remains an issue of under-provision of services in areas of high deprivation and in rural and isolated communities.

8.6 Option 2: Change within existing legislation. Until the service terms of the New Contract (Section 2) are clearly established it is difficult to state how far the existing legislative framework will provide for the policy proposals listed in the preceding sections. However, as currently envisaged, the Chronic Medication and Minor Ailments Schemes will possibly require further legislation. To different degrees it is intended that these schemes will provide (amongst other things) for serial dispensing, medication reviews and health checks, e.g. blood pressure, by the community pharmacist.

8.7 A recent public survey undertaken by the Scottish Consumer Council²² found 61% would like to see community pharmacists being able to authorise repeat prescriptions. The levels of support for medication reviews and health checks were 41% and 26% respectively. It follows that any inability to implement these services, either fully or in part, will be to the detriment rather than the benefit of patients.

8.8 Legislation is likely to be required for the service planning and delivery proposals (Section 3) and the cross-boundary and distant dispensing proposals (Section 6). These proposals are targeted significantly at ensuring ready access to the full range of core community pharmacy services in all areas of Scotland, and ensuring that people with special needs, e.g. drug misusers, also have ready and appropriate access to the services they require. Here too, ‘no change’ would mean losing potential benefits to patients.

8.9 Option 3: New legislation. This option addresses the lost benefit (to patient) issues above and in summary would provide Ministers with powers to secure:

• ready access to pharmacies for medicines, both prescribed and over the counter, and advice in deprived, rural and isolated communities
• improved access to healthcare services for people with special needs
• a wider and higher quality range of services
• closer working between community pharmacists and other NHS professionals, in both the primary and secondary care sectors

8.10 Overall these will contribute to the delivery of the Executive’s commitment in Our National Health that it would work with the NHS and professional bodies to ensure patients in every part of Scotland can get access to an appropriate member of the primary care team (not just GPs) in 48 hours.

8.11 The proposals to extend the pharmaceutical list arrangements (Section 4) will place community pharmacists on the same footing as other primary care contractors and so strengthen their clinical governance and quality assurance to patients.

Costs

8.12 The proposals in the preceding sections of this document are primarily about putting in place a legislative framework that will enable implementation of a New Contract for community pharmacists and associated elements of the strategy aims in The Right Medicine.

8.13 With discussions on the final content of the New Contract still to be completed it is not possible to quantify the financial consequences to any great degree. Nevertheless, the following paragraphs are provided to give an indication of the possible financial implications for each of the preceding sections.

New Contract (Section 2)

Policy Costs

8.14 As previously stated the financial consequences or requirements of the New Contract itself are a matter for consultation between the Executive and SPGC and, as such, fall outwith the scope of this consultation paper (but see paragraph 8.30).

Implementation Costs

8.15 Otherwise, the financial consequences relate to the cost of administering the revised arrangements. Boards already meet the cost of administering community pharmacy services and the expectation is that the New Contract will add little to that existing commitment. At present Boards are using resources to support the development of initiatives that facilitate implementation of The Right Medicine strategy. As those initiatives come to fruition, the resources for their development could, if necessary, be used to off set any additional administrative costs stemming from the New Contract.

8.16 Changes to either the community pharmacists’ fee structure (under New Contract arrangements) or the payment processing arrangements could have financial implications for the Common Services Agency, who currently provide those services for Boards. Financial provision already exists for the development of e-pharmacy initiatives, which would cover the development of e-payment systems for community pharmacy, and the expectation is that any such development would result in revenue savings.

Planning & Provision of Services (Section 3) & Cross-boundary and Distant Dispensing (Section 6)

Policy Costs

8.17 Pharmacy contractors who secure a ‘new’ Pharmaceutical Care Services Plan (PCSP) contract would, as now, be remunerated in accordance with both nationally and locally negotiated fees and allowances. Pharmacies with a ‘holding’ PCSP contract, which implies that their services are in excess to NHS needs would for a set period of time, continue to be remunerated at the nationally/locally agreed rates. During that period of time their Board would, where possible, offer the pharmacy contractor a service contract elsewhere in the Board’s area, or facilitate possible partnership working with other local pharmacy contractors.

8.18 Expenditure by Boards on providing incentives for service change would be an additional call on their resources but, where over provision exists initially, there should be savings in the longer term as services are reconfigured in line with the lower level of need. At this stage, where the correlation between current service requirements and provision is not known, it is not possible to estimate the financial implications of this policy.

8.19 Boards will incur additional expenditure where there is an under provision of services and they are gradually expanded to meet required need. Similar to above, it is not possible to put a cost estimate to this consequence. However, as explained at Section 7, it is proposed that the way in which Boards are funded for the provision of community pharmacy services will in future more accurately reflect needs at an individual Board level.

Implementation Costs

8.20 It is estimated that the cost of administering the current control of entry arrangements in Scotland are just under £1.3m²³ per annum as follows:

8.21 Under the proposed new planning arrangements Boards will have a new responsibility in the shape of producing a pharmaceutical care services needs plan for their area and thereafter ensuring that, over a period of time, service provision on the ground aligns to those needs. However, this will effectively replace their existing responsibilities and, therefore, is not expected to add to the costs identified above. The proposals at Section 6 (Distant Dispensing) extend the options for Boards to secure required service provision and, therefore, should not result in additional administrative costs.

8.22 Businesses wishing to apply to provide services in identified areas of need would continue to have associated administrative costs but these would probably be in the same order as those under the present arrangements. It is envisaged that there will be less need for appeals under the new arrangements but, in any event, the cost implications for business and the NHS overall would remain relatively insignificant.

Listing (Section 4)

Policy Costs

8.23 The policy will require existing ‘principal’ contractors to provide additional information to support their pharmaceutical list entry, and introduce a new requirement on ‘non principals’ to meet the same information requirements as principal contractors. No costs attach to this policy proposal.

Implementation Costs

8.24 Boards, and possibly the Common Services Agency (CSA), would incur limited additional costs as the new listing arrangements are put in place but once established the administrative costs should differ little to those at present.

Supervision of Pharmaceutical Services (Section 5)

8.25 None

Community Pharmacy Funding (Section 7)

8.26 Nationally the proposals would be cash neutral. Payments would still be measured and managed against the set ‘global sum’ and contractors would continue to be remunerated in accordance with nationally agreed or set rates.

8.27 On the other hand, the proposals would see funds currently managed centrally being passed to Boards in a way that may not match current payment patterns for community pharmacy. The allocation formula has yet to be developed so there is currently no indication of the financial variations that might result. However, the intention would be to phase in the allocation process over a period of time that will allow Boards to manage the change accordingly.

Business sectors affected

8.28 There are approximately 1150 community pharmacies and 14 appliance suppliers providing NHS pharmaceutical services in Scotland. The large chain, small chain and independent sectors account for 30%, 11% and 57% of numbers respectively. Supermarkets account for the remaining 2%. Typically, for the small chain and independent community pharmacy contractors the NHS pharmacy business accounts for approximately 80% of their total business turnover.

Compliance Costs for a typical business

8.29 As the above paragraph indicates, the businesses fall broadly into 4 categories. To varying degrees within each band there will be a considerable variation in the size of the NHS business governed, in the main, by the ‘catchment’ area in which the business is located. This is because, under the current remuneration structure for community pharmacists, payments are driven largely by prescription volume, i.e. through the dispensing fee. And the greater the number of prescriptions dispensed, the greater the turnover for the reimbursement of drug costs.

8.30 As previously stated, the New Contract is expected to include a revised remuneration structure, the financial envelope for which has still to be discussed. It is, therefore, not possible at this stage to provide a meaningful illustration of the overall compliance cost of the proposals listed in this document, which are essentially about ensuring that the legislative framework can support the agreed changes to service practice and delivery. However, it has been agreed between SEHD and SPGC that any new fees/allowances structure will be subject to impact analysis and that any significant changes in remuneration levels will be managed in over an agreed period of time.

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