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Health Bill

My Lords, before I deploy my argument, I have a terrible feeling that I may not convince the noble Earl. However, I will attempt to go through this in a bit more detail, in the hope that I can persuade him that we are behaving reasonably. When determining chemist applications to provide NHS pharmaceutical services, legislation means that primary care trusts cannot take into account any additional services that the chemist might offer. The Government committed to changing this as part of their balanced package of measures responding to the Office of Fair Trading’s report into retail pharmacies. That is how we came into this issue. Until recently, NHS pharmaceutical services, as defined under the National Health Service Act 1977, primarily comprised the supply of drugs, medicines and listed appliances. It is important to hang on to the fact that we are changing the range of services which can be taken into account in the kind of situations under discussion. However, with the introduction of the new contractual framework for NHS community pharmacies in April 2005, pharmacists are required to provide other essential services, such as promoting healthy lifestyles and support for self-care, linked to the dispensing of medicines. It is an additional range, but, inevitably, some of that continues to be linked to the dispensing of medicines. These new changes aim to improve choice and convenience for patients and help reduce reliance on NHS services. Sales of over-the-counter medicines and other related healthcare products have been estimated to account for 10 per cent of a typical pharmacy’s turnover, compared with 80 per cent derived from NHS prescription business. Important though over-the-counter medicines are, they are a relatively small proportion of the turnover of the business in this context. Although I accept that the range of medicines available over the counter is being significantly extended—so one would possibly expect that balance to change—it is still a relatively small proportion of the total income of a typical pharmacy’s turnover. Such sales are, of course, private transactions and, as such, do not come under the requirements for pharmaceutical services under the NHS Act. Nevertheless, as services, they are closely related to other services we are interested in, particularly the requirement on pharmacies to support patient self-care as an essential NHS service. I fully accept that over-the-counter medicines are an important part of helping patients to take more responsibility for self-care. I am not dismissing their role, but putting it into context: they are a relatively small proportion of the total turnover. We therefore consulted further on this complex issue last summer, on the proposal to enable primary care trusts to consider, in their assessment of chemist applications, what improvements they could bring to the provision of, or access to, over-the-counter medicines and other healthcare products. Expanding consideration in this way would, for the first time, capture this aspect of a chemist’s activity within the primary care trust’s overall assessment of chemist applications. Appropriately in Wimbledon week, the noble Earl talked about tie-breaks. I emphasise that this new provision will come into play only where a primary care trust is assessing two or more applications together. They must all pass the ““necessary or desirable”” test, but it would not be necessary or desirable to grant them all. This will occur in a competitive situation when applications take place at the same time. This amendment would enable primary care trusts to consider only the range of over-the-counter medicines and other healthcare products each applicant sells and the advice it gives. As I understand the noble Earl, his point was that it would remove the ability of primary care trusts to consider price or discounts. I stress that our proposal is not simply about cheaper or cut-price medicines and that primary care trusts’ considerations in these matters will not be solely financial, for the reasons I have given. While price can obviously be a factor, it is not, nor will it be, the primary determining factor. Our proposal goes much wider. It centres on improvements in access to a wide range of health-related products, including medicines, and the support and advice available to the patient to go with that supply. The primary care trust will take account of that wider range of considerations in deciding between rival applications. Our proposal is not about comparing the discounts that companies can gain from wholesalers but about trying to get the best range of services available to patients in a particular set of circumstances. With consultees’ indication that discounts would also be open to smaller pharmacies through access to larger wholesale-buying groups, it is about patients’ access to over-the-counter medicines and healthcare products—and access also means affordability. We cannot get away from the fact that the price of a product has some impact on its affordability and its accessibility to patients. Primary care trusts therefore need to be able to take into account prices of products when assessing applications. I again emphasise that a wide range of considerations will be made, not just the price of over-the-counter medicines, and that that consideration will happen in the limited set of circumstances when rival applications are being determined at the same time. I do not accept the noble Earl’s essential that the price of over-the-counter medicines will be a dominating factor. He is implying that that will skew the decisions. Price is just one factor, not necessarily the main one, in determining which application a PCT will accept. It is worth putting on the record that the National Assembly for Wales, while it did not accept the recommendations in the Office of Fair Trading report and has not introduced the regulatory reforms now in place in England, has decided to implement this proposal for NHS pharmaceutical services. The clause therefore contains an equivalent provision for Wales. I am still slightly unclear whether the noble Earl is on the side of a free and open market, in which case the PCT’s ability to take price into account is surely important, or whether he is concerned about patients, in which case price remains important but should not be the only factor. I say that price is one factor among many others. We think that our clause strikes the balance between price, which is good for patients, and wider support services, which are also good for patients. It is a balanced judgment, and we think our proposal is balanced. I hope that I have given some comfort to the noble Earl and the noble Baroness, Lady Barker.