Take hub and spoke to the competition watchdog, says NPA
01 Sep 2021
The National Pharmacy Association (NPA) wants the competition watchdog to look into hub and spoke dispensing, to ensure the system can operate without undermining choice in the medicines supply chain and disadvantaging independent pharmacies.
The NPA says that there needs to be a dynamic and competitive market in which hubs compete on the basis of quality of service and price for the custom of pharmacies that want to operate this model. Its board has suggested five tests for maintaining fair competition and choice within hub and spoke dispensing:
- Hubs must be registered pharmacies and meet all GPhC/PSNI standards.
- Hubs must be prevented from using their trusted position in the supply process to try to circumvent the relationship between the spoke and the patient, for example by using patient dispensing data for other commercial reasons or inserting branding or advertising material into packs to be supplied to a patient.
- The current barriers to entry for a hub provider presented by the direct to pharmacy (DTP) and limited wholesaler schemes must be removed so that any registered provider meeting standards can operate and compete in this market.
- A common set of standards should set out the duties and accountabilities of a dispensing hub and professional metrics which must be collected and published by the hub to assist the spoke in selecting a potential provider.
- Any mechanism which is designed to prevent a pharmacy from easily switching hub provider should be prevented, thus ensuring that pharmacies can drive competitive pressures in this market.
To achieve the third test, the Human Medicines Regulations 2012 would need to be updated to put an obligation on all manufacturers to supply the reasonable needs of all registered holders of a wholesaler dealer’s licence or a registered pharmacy.
The NPA wants the Department of Health and Social Care (DHSC) to ask the Competition and Markets Authority (CMA) to look into the matter. The Association recommends that the DHSC seeks a market review both before and after implementation of ‘inter-company hub and spoke’, whereby a pharmacy can outsource elements of its dispensing to a third party (the hub).
NPA vice-chair, Nick Kaye, said:
“If the government believes that hub-and-spoke dispensing is the future for pharmacy, it must do more to allow independents to engage with the model on a level playing field and to prevent unintended consequences. This includes ensuring that pharmacies that do not have access to hub services, or choose not to use hub services, are not disadvantaged.
“The government should also ensure that manufacturer-controlled supply restrictions, which stifle competition along the supply chain, are swept away.
“The CMA is an obvious place to start for scrutinising the matter and achieving a competitive environment that works for independents and the NHS.”
The Medicines and Medical Devices Act, which became law in February 2021, paved the way for regulations to legalise ‘inter-company’ hub and spoke dispensing.