Hub and spoke was, and still is, a dangerous idea

07 Mar 2017

It is a year since the NPA published the report of its hub and spoke task group – An Evidence Based Policy Review. The report concluded that hub and spoke between different companies is fraught with difficulties for independents and presents dangers for the sector when set in the context of the government’s current cost-focused (rather than value-focused) policy approach

‘Hub and spoke’ is a phrase that covers a range of models – not all of them unworkable or undesirable. But in the current climate, the models most likely to gain momentum, if they are permitted to start rolling, are completely at odds with the interests of independents and ultimately our patients.

Elements in Government, especially the money men at the Treasury, want a hollowed out local pharmacy service, and hub and spoke fits into their plans nicely.  It is a necessary element of large scale automated dispensing and distance supply, which would be at the expense of locally based provision.  A race to the bottom which ultimately impacts on patient care. The Government consultation said one thing while doing another – allowing collection from surgeries, hospitals and other locations – bypassing the ‘spoke’ altogether.

Therefore hub and spoke was, at the time of our report, and still is, a dangerous idea – particularly when propagated by those with only a part of the overall picture.

On the whole, NPA members are highly sceptical about hub and spoke. Yes, pharmacies must always look to become more efficient and to create headroom for services, but grand infrastructure schemes like hub and spoke are not the way – massive infrastructure costs and unproven benefits. The reality is that pharmacies could ultimately be fatally undermined by a dangerous experiment.  Whatever happens, we can’t risk the established, trusted service model of community pharmacy – namely convenient, face-to-face care from health care professionals, locally responsive and community based.

What’s more, hub and spoke would lead to even more market power for the major wholesalers at the expense of regional wholesalers and independent pharmacy contractors. With DTP schemes so firmly embedded, hub and spoke will only really work for vertically integrated companies. So, it’s not only about centralising the supply of medicines, it’s also about centralising market power. Hub and spoke arrangements could only ever deliver efficiencies to pharmacies if they include the majority of medicines – and this would drive purchasing from the big three wholesalers, further weakening the buying power of independent pharmacies. The Government really didn’t understand the model it was promoting, which if it had been allowed to proceed could ultimately have increased, rather than reduced, costs to the tax payer.

Partly in response to our report last year, the Department of Health shelved plans for legislative changes that would extend hub and spoke to independents without their own distribution infrastructure.  Note: the plans are on the shelf, not in the bin, so we should all remain vigilant.

 

Author Mike Hewitson