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06 July 2017

How the pharmacy cuts court appeal could begin

In view of the impact on community pharmacy of the remuneration cuts, it is not surprising that the Pharmaceutical Services Negotiating Committee (PSNC) and the National Pharmacy Association (NPA) want to appeal against the decision of Mr Justice Collins that the cuts were not unlawful.

There is no automatic right of appeal, so both organisations needed the judge’s permission to appeal against his judgment. Judges normally refuse permission, because they are expected to have confidence in the judgments they have given. If permission to appeal had been refused, PSNC and the NPA would have had to seek permission from the Court of Appeal itself.

The judge had expressed regret that he was upholding the Secretary of State’s right to determine remuneration. When granting permission to appeal, he said:

"While naturally I am not persuaded that I failed in any of the respects alleged… I recognise the real effect of the cuts on pharmacies and the apparent reliance on the 15% and the non-disclosure."

Ministers must make decisions that are rational. The decision to cut remuneration was underpinned by an impact assessment that suggested pharmacies were profitable enough to withstand the cuts. Reference was made to an “indicative analysis [which] suggests community pharmacies run a 15% operating margin”.

This “analysis” was demonstrably dodgy. The Department of Health (DH) only avoided losing the case because its barrister, James Eadie QC, told the court that the DH had not relied on it. Instead, Mr Eadie revealed in court that the DH had relied on input from an “industry insider”. This was something that the DH should have disclosed months earlier.

In giving the NPA permission to appeal, the judge additionally referred to the impact of section 1C of the National Health Service Act 2006. This says:

“In exercising functions in relation to the health service, the Secretary of State must have regard to the need to reduce inequalities between the people of England with respect to the benefits that they can obtain from the health service.”

The NPA had argued that the Pharmacy Access Scheme might mitigate the effect of the cuts in rural areas, but the DH had failed to take into account that there is likely to be an increased need for services in deprived urban areas.

These issues are likely to form the key battleground when the appeals are heard by three judges in the Court of Appeal later this year.


This article was written by David Reissner and published by Chemist and Druggist on 4 July 2017. For more information, please contact David on +44 (0)20 7203 5065 or at david.reissner@crsblaw.com

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