2. Background
3. The current regulatory framework for pharmacies
dates from 1987.[3]
Since then, this policy area has been devolved, but so far the
regulations remain more or less the same throughout the UK. Under
these regulations, it is possible to open a pharmacy anywhere,
but the granting of contracts to dispense NHS prescriptions is
regulated. Given that approximately 80% of the turnover of an
average pharmacy tends to originate from NHS prescriptions, regulation
of NHS contracts in practice amounts to full regulation of market
entry. This is borne out by the fact that only 1% of all community
pharmacies, some 130 pharmacies across the UK, operate without
an NHS contract.[4]
4. Local Primary Care Trusts are responsible for
granting contracts to dispense NHS prescriptions, and in doing
so, they have to be satisfied that a pharmacy is 'necessary'
or 'desirable' for a particular neighbourhood.[5]
As a result, a new pharmacy is not normally granted a contract
if the area already has one or more pharmacies catering adequately
for local needs.
5. There are approximately 12,250 community pharmacies
dispensing NHS prescriptions in the UK.[6]
Pharmacies are currently fairly evenly distributed in the country,
with 79% of the population in Great Britain living within one
kilometre (0.62 Miles) of a pharmacy. Also, 98% of GPs' surgeries
are within one kilometre of a pharmacy. Nonetheless, in the view
of the Department of Health, the current distribution of pharmacies
is not perfect.[7]
6. The current pharmacy framework is a constraint
on change in the numbers and locations of pharmacies, and as a
result, the net annual increase in the number of pharmacies has
been four per year in the 1991-2001 period.[8]
3 OFT 609 (2003), para. 3.9 Back
4
OFT 609 (2003), para. 1.5 Back
5
OFT 609 (2003), para. 3.11 Back
6
OFT 609 (2003), p. 1 Back
7
See comments made by Lord Hunt of King's Heath, Parliamentary
Under Secretary of State, Department of Health; HL Deb, 25 February,
col 123 Back
8
OFT609 (2003), para. 3.27 Back
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