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PNAS and Market Entry

28 July 2014

Since 2012 the grant of NHS pharmacy contracts has been linked to the contents of Pharmaceutical Needs Assessments. These PNAs were drawn up by PCTs.

Unfortunately, PNAs have generally not proved fit for purpose because most of them failed to identify any need for pharmaceutical services, reflecting a determination on the part of PCTs not to grant any applications for new contracts. The result is a system stifles that innovation and competition.

The Local Area Teams of NHS England that now maintain pharmaceutical lists and make initial decisions on applications for new contracts seem just as keen as PCTs to refuse every application, and the Chief Pharmaceutical Officer, Keith Ridge, said earlier this year that there were too many pharmacies in some areas, But, things may soon change.

The Department of Health tweaked the market entry Regulations on 1 April with the express intention of encouraging the grant of more applications in cases where a PNA had not identified a need, if granting the application would secure improvements or better access to services.

I expect Health and Wellbeing Boards (HWBs) are already working on new PNAs for each area, because they are required to publish new PNAs by 1 April 2015. Of course, we cannot know whether the final product will be any better than the PNAs prepared by PCTs.

However, in contrast to the current arrangements under which PNAs were prepared by the same people who make the decision whether or not to grant an application, the role of NHS England should change to an administrative and judicial one: determining applications based on PNAs they have not written themselves.

Who is on the HWBs that will be responsible for PNAs? HWBs include a minimum membership of one local elected representative, a representative of local Healthwatch, a representative of each local CCG, the local authority directors for adult social services and children’s services, and the director of public health for the local authority.

The elected representative, often the Leader of the Council, usually chairs the HWB. The inclusion of elected representatives could give PNAs a political dimension, which may be a good thing, as councillors respond to what voters tell them on the doorstep.

Market entry arrangements are at a tipping point. The entire market entry system will be reviewed by the Department of Health by August 2017. If HWBs do not get their PNAs right next year, 2018 may bring more upheaval.

This article was written by David Reissner.

For more information please contact David on +44 (0)20 7203 5065 or david.reissner@crsblaw.com.