The National Pharmacy Association met with the Competition and Markets Authority (CMA) this week to discuss the potential competition impacts of hub and spoke dispensing.
A public consultation is currently under way on government plans to enable ‘inter-company hub and spoke’, where a pharmacy outsources elements of its dispensing to a third party.
The NPA told senior officials at CMA that a fair and competitive market for hubs would be essential to avoid unintended consequences such as price rises and poor service.
NPA vice chair, Nick Kaye, who attended the meeting, said:
“It is highly likely only a few companies in the market will be able to provide fully comprehensive external hub dispensing services to pharmacies, at least initially. This would put pharmacies in a weak position as customers and might also lead to a rise in medicines prices for the NHS, the taxpayer and the public.
“If pharmacies are truly to benefit from hub and spoke dispensing, there needs to be a dynamic and competitive market in which hubs compete for the custom of pharmacies on the basis of quality service and price.
“Significant capital investment is necessary to set up a hub as well as ongoing costs. This, together with the current restrictive wholesaler distribution arrangements, presents a formidable barrier to market entry.”
The NPA has asked the CMA to consider the matter prior to commencement of the policy and also to commit to a post implementation market review.