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12 January 2017

Does Hunt think establishment payments are 'subsidies'?

I read that the secretary of state for health has said in the House of Commons that the NHS should not "continue to subsidise pharmacies that are very close to other pharmacies".

It's all in the choice of words. What does Jeremy Hunt mean by "subsidise"? What does he mean by "cluster"? He told the House: "Our reforms are designed to ensure that where there is only one local pharmacy that people can access, that pharmacy is protected."

What does he mean by "protect"?

I doubt that pharmacy owners would recognise the establishment payment as a subsidy. After all, the secretary of state has a legal duty to pay fair and reasonable remuneration for the NHS services pharmacies provide.

Mr Hunt condemned three or more pharmacies located close together, but this is normal in suburban high streets, where local people exercise the choice of provider the NHS Act is designed to guarantee.

Last October, the pharmacy minister told the House of Commons that no community would be left without a pharmacy. Mr Hunt presumably believes the new Pharmacy Access Scheme (PhAS) will provide remote pharmacies with the protection he refers to. Pharmacies will receive PhAS payments if they:

  • Were on a pharmaceutical list on September 1, 2016
  • Are more than a mile away from the nearest pharmacy by road
  • Are not in the top 25% largest pharmacies by dispensing volume.

Where is the forward-thinking? In 2012, Mr Hunt's government required health and wellbeing boards to publish pharmaceutical needs assessments (PNAs). If a PNA identifies a need for a pharmacy, NHS England must grant the application. Similarly, if granting a pharmacy application would secure improvements or better access to services, a new contract must be granted.

The rigid PhAS criteria takes no account of new pharmacies, however badly they may be needed. Even if the application for a new pharmacy had been made before the PhAS was announced, the new pharmacy won't get PhAS payments, because they will not have been on the pharmaceutical list by the cut-off date.

It's just one example of the muddled-thinking that underlies the pharmacy cuts. I look forward to learning how the secretary of state tries to justify his position in court when the judicial review of the cuts is heard.

For more information please contact David Reissner on +44 (0)20 7203 5065 or at

This article was first published in Chemist and Druggist, 12 January 2017.