NHSE urged to end contracts with non-compliant DSPs amid rising pharmacy closures

There is clear evidence that the majority of distance selling pharmacies are operating in breach of their NHS contracts, and a failure to properly regulate 'pseudo' distance selling pharmacies is leading to local pharmacy closures, the Company Chemists' Association has reported.

According to the CCA’s recent findings, 72 per cent of DSPs dispense over 50 per cent of their prescriptions to patients within a single postcode area within 10 miles of the pharmacy.

"Operating within constrained geographical regions, pseudo-DSPs achieve reduced overheads and operational costs by focusing on localised marketing and medicine delivery. They compete against local brick-and-mortar pharmacies, causing them to lose vital trade," the CCA claimed, based on its recent survey – The Impact of Pseudo Distance Selling Pharmacies.

"As per their terms of service, DSPs are obligated to provide prescription delivery nationwide, extending beyond local patients," said the CCA, adding that the financial savings resulting from the lack of patient access are balanced by the necessity to function on a national scale.

Since 2015, there has been a net closure of 720 pharmacies, yet there has been a rise in the number of DSPs. While the CCA has provided evidence of malpractice to NHS England, no definitive actions have been taken to address these unfair trading practices, the CCA said.

Disparities in the framework 

NHS BSA data indicated that by the close of 2022, there were 374 'active' DSP contracts in England. The CCA examined prescriptions dispensed by each to identify the respective GP surgeries that prescribed them.

The CAA investigation revealed these disparities:

• Out of the total, 268 (72 per cent) are failing to adhere to their NHS DSP contractual obligations, with over 50 per cent of their prescriptions originating from GPs in a sole postcode area within 10 miles of the pharmacy.
• 28 (7 per cent) receive over 50 per cent of their prescriptions from GPs within a singular postcode area. However, over 50 per cent of their prescriptions originate from distances exceeding 10 miles from the pharmacy.
• 15 (4 per cent) obtain up to 50 per cent of their prescriptions from GPs within a sole postcode area. Nonetheless, less than 50 per cent of their prescriptions originate from distances exceeding 10 miles from the pharmacy.
• Merely 63 (16 per cent) receive prescriptions from all over the country and deliver the anticipated DSP service.

The CCA has urged NHSE to probe DSPs that appear to lack nationwide service provision, conduct audits for all DSPs, take action against those failing contractual duties, demand proof of nationwide service from DSPs, and revoke contracts of non-compliant DSPs.

"'Pseudo-DSPs' are causing potential barren areas, violating legal agreements, and accelerating pharmacy closures," said Malcolm Harrison, CEO of CCA. "Authentic DSPs provide essential medication access to numerous patients. Patient choice in accessing medicines and adjusting it as per their requirements holds significance. However, 'Pseudo-DSPs' disrupt the market. NHSE must annul contracts of DSPs that persistently fall short of contractual obligations."

"It is NHSE's responsibility to scrutinize, audit, and confront them, ensuring they cease to jeopardize direct access to pharmacy advice," he added.

‘NHSE neglecting self-regulation’

In response to the report, Nigel Swift, Managing Director of Rowlands, commented that the CCA report shows NHSE is not effectively enforcing its own regulations.

“DSPs find it simpler to gain operating permission compared to traditional pharmacies, as they are not required to exhibit a local pharmaceutical presence,” he said. “Although they are theoretically intended to serve the entire nation, NHSE seemingly doesn't verify this in practice. This neglects their duty and goes against government healthcare policy.”

“At a time when most pharmacies in England are facing severe financial pressures and we see hundreds of closures and mergers, unfair competition and a lack of a level playing field simply adds to the woes of the sector. Ultimately, it is patients who lose out if they cannot drop into their local pharmacy for professional healthcare advice and services.”

“If DSPs disregard the rules, NHSE must promptly take action,” Swift added.

Meanwhile, the NHSE Community Pharmacy Workforce Survey 2022 recently unveiled a 6 per cent decrease in the community pharmacy workforce. The survey data further highlighted a 16 per cent increase in pharmacist vacancy rates, signalling an elevated reliance on locum pharmacists who, on average, work fewer hours.