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Pharmacy and the Law

A selection of articles for the pharmacy sector written by Richard Hough, a Partner and pharmacist in the commercial team, which are printed in pharmacy sector publications.

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Parallel worlds

Monday 22nd May 2017

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Independent Community Pharmacist magazine article - May 2017

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

The United Kingdom’s vote to leave the EU last June and Theresa May’s recent decision to trigger Article 50 will, to put it mildly, create one or two legal issues for the UK, or to put it more accurately, will create the mother of all legal messes.

Good news, at least, for the lawyers, you might say. However, one such legal issue, which pharmacy proprietors might need to consider, is the potential impact that Brexit will have on the parallel import of pharmaceutical products.

The dispensary shelves of community pharmacies up and down the country contain numerous parallel import products. The business of buying and selling parallel imports, insofar as it relates to community pharmacy, encompasses the trading of genuine pharmaceutical products at the different prices that can be obtained in the different Member States of the EU.

A manufacturer of a particular pharmaceutical product will be prepared, for economic, commercial, business or other considerations, to put its product on the market of one Member State at a materially lower price than it is prepared to do so in another. The price differential, together with the fundamental principle of free movement of goods within EU Member States, creates a demand from purchasers within territories where the prices are set high, which can be met by sellers located in territories where prices are set low.

Trade mark law

European trade mark law is central to the business of parallel imports. Parallel imported products of the type that are commonly found in community pharmacy dispensaries are all protected in some way or another by trade mark rights.

Trade mark rights are territorial in nature, affording the trade mark owner the exclusive right to commercially exploit its products under that brand within a particular territory. So, if another trader attempts to commercially exploit a trade mark owner’s product (using it in the course of business) by trading it under the owner’s brand, it would, but for the doctrine of “exhaustion”, as provided for in Article 13.1 of the European Trademark Regulation, be in breach of the trade mark owner’s rights. Article 13.1 states: “A Community trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community under that trade mark by the proprietor or with his consent.”

Therefore, once a product labelled with a trade mark has been sold by the trade mark owner or with its consent, the trade mark right is said to be “exhausted” and can no longer be enforced by the owner.

However, the effect of exhaustion of trade mark rights is limited to such goods that were first distributed to the market within the EU and also Iceland, Liechtenstein and Norway, together the EEA. Therefore, any imported pharmaceutical product from outside the EEA, which is put on the market within the EEA without the consent of the trade mark owning pharmaceutical company immediately constitutes trade mark infringement.

So, the future availability of parallel imports of pharmaceutical products will depend on the post-Brexit trade model with the EU adopted by the UK, the three main contenders being:

  • “Norwegian model”. Norway has full access to the European Single Market. In return, it is obliged to make a financial contribution and accept a whole range of EU regulations. If the UK adopts a similar model, it will stay closely connected to the EU with the advantage of full accessibility to the European Single Market. Choosing the “Norwegian model” would imply that the doctrine of exhaustion would continue to apply to the distribution of parallel imports in the UK.
  • “Swiss model”. Switzerland’s relationship with the EU is governed by numerous bilateral treaties, under which Switzerland has achieved broad access to the European Single Market and is able to trade in most goods. In the event that the UK re-joins the European Free Trade Association (EFTA), it would still have partial access to some elements of the Single Market but also have the freedom to independently reposition its own free trade policy to focus on non-EU countries. Therefore, in order to allow parallel imports from the UK, it would also have to negotiate separate bilateral agreements with the EU on the treatment of trade mark rights, including the scope of the exhaustion of such rights for cross-border trades.
  • “Hard Brexit”. The current Tory government favours a “hard” Brexit – leaving the Single Market and trading with the EU as if the UK were any other non-EU country. If the UK leaves the EU without joining (or re-joining) associations such as EFTA, the doctrine of exhaustion will cease to apply, as would therefore the legal basis for both parallel imports into and out of the UK. Brexit negotiations will no doubt begin in earnest after the outcome of next month’s general election, pursuant to which, depending on which model we end up adopting, legal parallel imports may no longer be found on UK pharmacies’ dispensary shelves and further impacting contractors’ profit margins.

For more information please contact: 

Richard Hough
Partner and Head of Healthcare at Brabners LLP
Tel:  0151 600 3302


Bullying in the workplace

Tuesday 31st January 2017

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Independent Community Pharmacist magazine article - January 2017

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

According to a 2015 report by the Advisory, Conciliation and Arbitration Service (ACAS), workplace bullying is on the rise, with about 20,000 calls relating to bullying being made each year to ACAS alone. Regrettably, bullying of staff members by pharmacy owners, managers, supervisors and work colleagues also occurs in community pharmacies.

Pharmacy owners should not underestimate the impact that workplace bullying can have on their businesses. Bullying and harassment can, if left unchecked or badly handled, create serious problems for the pharmacy, including poor morale and poor employee relations, loss of respect for managers and supervisors, poor performance, absence, and damage to the business’s reputation.

In addition, pharmacy owners should be aware that workplace bullying can result in an employment tribunal claim or court cases, and payment of unlimited compensation to victims. It is therefore in your interests to promote a safe, healthy and fair environment in which your staff can work.

Bullying defined

Bullying may be characterised as offensive, intimidating, malicious or insulting behaviour, an abuse or misuse of power through means that undermine, humiliate, denigrate or injure the recipient.

Behaviour that is considered bullying by one person may be considered firm management by another. Most people will agree as to what constitutes extreme cases of bullying and harassment but it is often the grey areas that cause the most problems. It is good practice for employers to provide their staff with examples of what constitutes unacceptable behaviour, including:

  • Spreading malicious rumours, or insulting someone by word or behaviour
  • Ridiculing or demeaning someoneExclusion or victimisation
  • Unfair treatment
  • Overbearing supervision or other misuse of power or position
  • Deliberately undermining a competent worker by overloading and constant criticism
  • Preventing individuals progressing by intentionally blocking promotion or training opportunities.

Unless bullying amounts to conduct defined as harassment in the Equality Act 2010, it is not possible to make a complaint to an employment tribunal. The Act uses a single definition of harassment to cover the relevant protected characteristics. Employees can complain about behaviour that they find offensive, even if it is not directed at them.

Harassment is defined as: “Unwanted conduct related to a relevant protected characteristic, which has the purpose or effect of violating an individual’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for that individual”. The relevant protected characteristics are age, disability, gender reassignment, race, religion or belief, sex, and sexual orientation.

An employee can make a complaint against their employer if they are harassed by someone who doesn’t work for that employer, such as a customer. As an employer, once you are aware of this unwanted behaviour, you should take reasonable and proportionate action to address it.

Pharmacy owners owe their employees a ‘duty of care’. If the mutual trust and confidence between employer and employee is broken, for example, through bullying and harassment, an employee can resign and claim constructive dismissal at an employment tribunal on the grounds of breach of contract.

Breach of contract may also include failure to protect an employee’s health and safety at work. Under the Health and Safety at Work Act 1974, employers are responsible for the health, safety and welfare at work of all employees.

Employees can also bring a negligence claim on the grounds that their employer has failed to protect them from bullying, which has led to personal injury (normally in such cases, psychiatric illness).


Addressing bullying in the workplace can be difficult. However, making a grievance procedure or dignity-at-work policy accessible certainly helps; employees will know what to do if they think they are being bullied, which, in most instances, is to bring it to the attention of their managers.

Policies for owner-managed or small- chain pharmacies do not need to be over elaborate, and might be included within other personnel policies, but a checklist for a specific policy on bullying and harassment could include:

  • A statement of commitment from senior management
  • A clear statement that bullying and harassment is unlawful and will not be tolerated
  • The steps which the organisation takes to prevent bullying and harassment
  • Responsibilities of supervisors and managers
  • Confidentiality for any complainant
  • Reference to grievance procedures (formal and informal), disciplinary and investigation procedures including timescales for action, and counselling and support availability
  • Training
  • How the policy is to be implemented, reviewed and monitored.

Good practice requires that all allegations of bullying are investigated thoroughly and impartially. The investigation should include interviewing the employee who raised the allegation, the alleged perpetrator, and any possible witnesses to the alleged events, who would normally be co-workers. Having done so, you should report back to the employee on your findings. You should establish with the employee what steps can be taken in the future to ensure that they are supported and comfortable at work.

A proactive approach helps protect your business from problems in this area. Setting a good example and disseminating clear guidance communicates to all staff that bullying and harassment are unacceptable.

For more information please contact: 

Richard Hough
Partner and Head of Healthcare at Brabners LLP
Tel:  0151 600 3302

Pharmacist work place pressure

Tuesday 13th December 2016

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Independent Community Pharmacist magazine article - November 2016

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

Negative publicity surrounding pharmacy in an article published by the Guardian earlier this year has prompted the General Pharmaceutical Council to look into issues of workplace pressure which affect pharmacy professionals.

The Guardian article restricted its findings to the practices of one particular pharmacy chain but a survey undertaken by the Pharmacists’ Defence Association’s survey, and reaction to it, indicates that the issue of workplace pressure suffered by pharmacy professionals is widespread.

For a number of years now, changes to the pharmacist’s role, pressures to meet business targets, staff shortages, long working days with no opportunities for rest breaks, and an increasing administrative burden, have left pharmacists struggling to cope with burgeoning workloads and have led to concerns that patient safety is being compromised.

The article highlighted medicine use reviews (MURs) as an example of how financial targets were being inappropriately set by some employers. Many employers construe the annual MUR limit, which was set to prevent the system from being abused, as a target. The pressure on pharmacy professionals to meet this target has led to some pharmacists performing MURs inappropriately and in some cases falsifying MURs.

In addition to the financial targets, the staffing levels, workload and unavailability of rest breaks not only increases the pressure on pharmacy professionals but also increases potentially unsafe practices such as “self-checking”. This results in an environment where dispensing errors are more likely to occur, which threatens the safety of patients.

In addressing this issue, pharmacy owners and pharmacists should take into consideration the following applicable guidance and legislation.

Standards of Conduct, Ethics and Performance (the Standards)

The Standards state that a pharmacy professional must make patients their first concern. They also state that professional judgement should not be affected by personal or organisational interests, incentives, targets or similar measures. In other words, inappropriate financial targets imposed by management within pharmacy businesses not only increase the pressure on pharmacy professionals but, in attempting to meet those targets, registrants may be in breach of the Standards.

Working Time Regulations 1998 (WTR)

The lack of rest breaks and excessive working hours, which many pharmacy professionals endure, are not compliant with the WTR. The WTR introduced rules of general application limiting working hours and providing for rest breaks and holidays. In relation to pharmacy practice, an employer's obligations under the WTR are as follows:

  • Take all reasonable steps in keeping with the need to protect workers' health and safety to ensure that each worker's average working time (including overtime) does not exceed 48 hours per week.
  • Give workers "adequate" rest breaks where the pattern of work is such as to put their health and safety at risk, in particular where work is monotonous.
  • Allow workers the following rest periods unless they are exempt, in which case compensatory rest will usually have to be given:
    • 11 hours' uninterrupted rest per day;
    • 24 hours' uninterrupted rest per week (or 48 hours' uninterrupted rest per fortnight); and
    • a rest break of 20 minutes when working more than six hours per day.

Often it is difficult for pharmacy professionals to take a 20 minute break due to customer expectation that a pharmacist will always be present during a pharmacy’s opening hours and the commercial pressures to meet these expectations.

Pharmacy owners must ensure that workers can take their rest breaks but are not required to force workers to take them. Workers can elect to work through a rest break provided they do not risk their own or others’ health or safety and if they do so, it is the employer’s responsibility to ensure that compensatory rest is allocated.

Medicines Act 1968

Under the Medicines Act 1968, pharmacists can still commit a criminal offence through making an inadvertent dispensing error.

Experts on medical safety all agree that the threat of criminal liability constitutes a disproportionate response to human errors, making dispensing practice less safe and more defensive, with errors going unreported. Consequently, effective clinical governance and risk management are significantly affected.

There has been a long-standing call for the repeal of the relevant provisions of the Medicines Act. Many commentators consider that, where action is required, it should be the GPhC, exercising its regulatory powers, and not the criminal courts, who should have the powers to deal with the issue.

On 12 February 2015, the Department of Health published a consultation seeking views on the draft Pharmacy (Preparation and Dispensing Errors) Order. The consultation ran until 14 May 2015 and proposed to “redress imbalances between legislation and regulation.” However, a report on the responses to the consultation questions has yet to be published.

It is clear that common working practices within the profession constitute breaches of both the Standards and WTR and contribute to workplace pressure, which is detrimental to pharmacy professionals and puts patients at risk. Pharmacy professionals who are put under this pressure are far more likely to make an honest human error and run the risk of facing criminal sanctions.

Pharmacy owners, employees and locum pharmacists must each take responsibility for decreasing avoidable workplace pressure and continue to push for reform of the Medicines Act 1968.

For more information please contact:

Richard Hough

Partner and Head of Healthcare at Brabners LLP
Tel:  0151 600 3302

Falsified Medicines Directive and Brexit Fallout

Friday 9th December 2016

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The European Union Intellectual Property Office (EUIPO) has estimated in a recent report that the manufacture and wholesale supply of counterfeit medicines incurs a direct cost to the EU pharmaceutical sector of:

  • 37,000 jobs
  • EUR1bn of government revenue
  • EUR10.2bn of sector revenue

The UK pharmaceutical sector alone loses an estimated EUR605 million of sales annually from the counterfeit medicine trade. The EUIPO report notes that the indirect effect of counterfeit medicines inflates these figures higher still, and that the estimates do not take into account pharmaceutical retailers. The impact of counterfeit medicine sales is more than just an economic issue; counterfeit medicines also put at risk the wellbeing of those who take them.

The Falsified Medicines Directive (FMD) was published in 2011 in the Official Journal of the European Union to counter these massive losses, and has been in force since 2 January 2013.  The purpose of the FMD, and delegated legislation which has subsequently been adopted pursuant to it, is to add a layer of EU-wide regulation in relation to the supply of medicines, including changes to the outer packaging of medicines, an EU-wide logo to identify legal online suppliers of medicines, more stringent control and inspections of producers of active pharmaceutical ingredients, and stronger record-keeping requirements for wholesalers.

The ‘delegated legislation’ has manifested itself as supplementary regulation EU2016/161, which shall apply in all EU Member States from 9 February 2019. From that date, manufacturers of pharmaceutical products must employ specified safety features, including a unique 2D data matrix code and tamper-resistant measures, on the packaging of medicines.

The Medicines and Healthcare products Regulatory Agency (MHRA) has announced that it ‘will continue to work with the European Commission and other Member States on implementation plans for the new regulation’, and that ‘we will also be working with stakeholders throughout the supply chain to secure implementation within the three years’. However, the UK’s decision in June to leave the EU somewhat muddies the waters.

The UK is expected to trigger Article 50 at some time during spring 2017, which will in turn initiate the two year negotiation process pending a subsequent exit from the EU. What is not clear is whether EU law will remain enshrined in the UK to be repealed at will, or if the proverbial slate will be wiped clean. One can imagine a scenario where a healthy middle ground will be found, however for now the future of EU-derived pharmaceutical law, such as the FMD, is uncertain.

A number of pharmaceutical bodies have initiated consultations with the UK government in order to decipher and prepare for possible post-EU scenarios. The British Generic Manufacturers Association, the Association of the British Pharmaceutical Industry and others have published press releases which support the current EU regulatory framework.

The future of the FMD remains uncertain, however the UK pharmaceutical industry has, to this point, remained fiercely supportive of EU pharmaceutical law, and looks set to push for full implementation of the FMD. 

For more information please contact:

Richard Hough

Partner and Head of Healthcare at Brabners LLP
Tel:  0151 600 3302

GMC Investigation – Inappropriate Prescribing

Wednesday 7th December 2016

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The General Medical Council (GMC) has launched an investigation following claims of inappropriate prescribing of antibiotics by doctors who are linked to online pharmacies. The action was prompted by a BBC investigation, which highlighted that the doctors associated with these online pharmacies were prescribing antibiotics in a manner contrary to the National Institute for Health Care and Excellence (NICE) guidelines, and on occasions at odds with the symptoms listed by the journalist.

The BBC’s investigation comes at a time when bacterial resistance to antibiotics is high on the medical agenda as a result of years of over-prescribing. Highlighting the lack of cohesion in primary care, and perhaps a failure to adhere to prescribing guidelines, one BBC journalist was able to obtain three prescriptions for antibiotics within 24 hours using online pharmacies. In light of the fact that in Europe alone, over 25,000 people per year die as a result of ultra-resistant bacteria, this story illuminates the fundamental failings of a fragmented primary care service offering, in which online prescribing and dispensing services are becoming increasingly common.

The GMC has released a statement in response to the BBC investigation, claiming ‘it is important that every practising doctor in the UK reflects on current guidance’. Niall Dickinson of GMC has previously remarked ‘doctors who pose a risk to patients can, and do, face sanctions for mis-prescribing’, though no method of direct and formal punishment for casual over-prescribing currently exists.

NICE guidelines state ‘When deciding whether or not to prescribe an antimicrobial, take into account the risk of antimicrobial resistance for individual patients and the population as a whole’. Whether or not such guidance - and inaction to implement it - attracts legally enforceable measures in the future remains to be seen.

Pharmacy owners, especially those operating online pharmacies which dispense as a result of an online GP consultation, should take heed of the investigation as tougher enforcement by regulatory authorities would appear inevitable. However, this issue will not disappear until there is greater cohesion between primary care service providers, especially those operating online. 

For more information please contact:

Richard Hough

Partner and Head of Healthcare at Brabners LLP
Tel:  0151 600 3302

Fitness to Practice Proceedings

Wednesday 5th October 2016

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Independent Community Pharmacist magazine article - September 2016

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

The vast majority of pharmacists are dedicated professionals who conduct themselves in exemplary fashion and abide by both the law and the profession’s accepted standards of conduct, ethics and performance.  Regrettably, the actions of some registrants occasionally fall beneath accepted standards and, in some circumstances, the scope or gravity of those actions is such that the registrant’s fitness to practise is called into question.

The Pharmacy Order 2010 contains provisions which govern when a pharmacist’s fitness to practise may be called into question. Regulation 51 states that a registrant’s fitness to practise is to be regarded as ‘impaired’ only on a limited number of grounds, the main ones being:

  • Misconduct;
  • Deficient professional performance;
  • Adverse physical or mental health;
  • A conviction for a criminal offence; and
  • Accepting a police caution.

Engaging in behaviour which is considered to be inappropriate, misleading or dishonest, which breaches the GPhC’s Standards of Conduct, Ethics and Performance or which breaches medicines or criminal legislation is likely to warrant further investigation. Certain health issues, such as suspected alcohol or drug abuse or psychiatric problems, are also likely to be investigated. 

When an allegation, relating to behaviour which exceeds the GPhC’s threshold criteria, is made to the GPhC, the Registrar must, in most cases, refer the matter to the Investigating Committee (“the IC”) for consideration. More serious allegations may, however, be referred directly to the Fitness to Practise Committee (“the FTPC”). The IC will decide, by reference to referral criteria, whether the allegation needs to be considered by the FTPC. If it decides not to refer the matter to the FTPC, it may decide to take no further action against the registrant, issue a warning or provide advice to the registrant in connection with any matter arising out of, or related to, the allegation. Where an allegation is referred to the FTPC, it must determine on the facts whether the registrant’s fitness to practise is impaired. 

We would always advise our clients to seek legal advice at the earliest opportunity, so that representations can be submitted on behalf of the registrant for early consideration by the IC, rather than to wait before the matter comes before the FTPC.

If the matter proceeds to a FTPC hearing, various legal documents, including the Particulars of Allegation, which sets out the full extent of the allegations, will be sent to the registrant, together with statements from witnesses called by the GPhC. Together these documents constitute the GPhC’s case against the registrant.

Upon service of the GPhC’s case, the registrant will be able to consider the supporting evidence, the robustness of which will determine in many cases whether the registrant will admit, dispute or partly admit the allegations.

Fitness to practise hearings are held in public before a tribunal consisting of a legally qualified chairman and two lay members. Proceedings commence with the FTPC considering preliminary legal arguments brought by the parties’ legal representatives. The allegations against the registrant are then read out including the alleged facts upon which the allegations are based. 

FTPC hearings follow a three stage process (findings of fact; whether the registrant’s fitness to practise is impaired; and sanction). The FTPC will make findings of fact based on admissions and cross-examination of each side’s witnesses. The second stage involves further submissions from the parties as to whether, on the basis of any facts found proved, the FTPC finds the registrant’s fitness to practise is impaired. 

Before the FTPC imposes any sanction, the parties’ representatives make further submissions regarding any relevant mitigating or aggravating circumstances. At this third stage, the FTPC will also consider testimonials regarding the registrant’s character and/or his clinical abilities if relevant. 

The FTPC will refer to the GPhC’s Good decision making: fitness to practise hearings and sanctions guidance, which sets out the available sanctions, the circumstances when these may be imposed and commonly occurring mitigating and aggravating factors.  When imposing any sanction, the FTPC will have regard to the principle that the purpose of a sanction is to protect the public, maintain public confidence in the profession and to maintain proper standards. 

The FTPC may impose the following sanctions:

a)     Take no action, in which case no record will be made on the Register;

b)    Give advice, if no impairment is found. No record of the advice is made on the Register;

c)     Give a warning, details of which will be recorded in the Register;

d)    Impose conditions on the registrant’s registration for a period of up to three years, which will  be recorded in the Register; 

e)     Suspension for a period not exceeding 12 months, which will  be recorded in the Register; or

f)     Removal from the Register.

After the imposition of a sanction, the matter will normally end there.  However, those who wish to fight on may exercise their right of appeal, which must be lodged in the High Court (in England) within 28 days of the FTPC’s decision. 

Undoubtedly, a GPhC investigation can be an extremely traumatising experience but to mitigate this and to try and get the best possible outcome, we recommend getting good advice early on in proceedings. 

Hub and spoke dispensing

Thursday 29th September 2016

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Independent Community Pharmacist magazine article - September 2016

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

Earlier in the year, the Department of Health (‘DoH’) published a consultation document entitled, ‘Amendments to the Human Medicines Regulations 2012: ‘Hub and spoke’ dispensing, prices of medicines on dispensing labels, labelling requirements and pharmacists' exemption’.

The consultation sought comments from interested bodies on four proposed changes to the Human Medicines Regulations 2012 and the Medicines Act 1968 with the aim to introduce new legislation1 in October 2016, which would:

• Enable the use of ‘hub and spoke’ dispensing models by ‘spoke’ pharmacies that do not form part of the same retail pharmacy business as the ‘hub’ pharmacy;

• Permit dispensing labels to include the indicative cost of a medicine;

• Clarify the dispensing label requirements for monitored dosage systems to reflect current practice and by ensuring products supplied under patient group directions have a dispensing label in line with professional guidance; and

• Redesign the ‘exemptions for pharmacists' in section 10 of the Medicines Act 1968 in respect of the preparation and assembly of medicines, further to a recent judgment of the Court of Justice of the European Union2.

Of these four proposals for legislative change, the first has arguably proved to be the most contentious because, if it was adopted, it could have far-reaching consequences for pharmacy proprietors.

‘Dispensing’ covers a number of different processes, including the receipt of a prescription, clinical and accuracy checks, and the sourcing, preparation, assembly and supply of medicines. Traditionally, all of these different aspects of dispensing are undertaken in a single pharmacy. In a hub and spoke model, however, some of these processes are undertaken in another pharmacy. As the law currently stands, hub and spoke dispensing may only occur between pharmacies in the same retail business (the intra-group model) and has therefore been adopted by some of the multiples.

The DoH claims that the intra-group model is gaining popularity due to its potential to make the dispensing process more efficient, lower operating costs and free up pharmacists to spend more time with patients. The consultation papers goes on to state that the “model allows for cost advantages to be exploited by expanding the scale of assembly and preparation, which makes automation more viable. Automation in dispensing, implemented alongside a robust quality assurance system, is linked to safer dispensing with fewer dispensing errors. Large scale 'hub' pharmacies have the capability to increase efficiency and lower operating costs significantly”.

The above claims have proved to be contentious, predominantly on the basis that they appear to be baseless, and have been met with resistance by pharmacy bodies, which consider that the DoH, in attempting to sugar the unpalatable funding cut pill that it is forcing contractors to swallow, has considerably overstated the perceived benefits of this model.

Section 10 of the Medicines Act 1968 only allows hub and spoke dispensing if the hub and the spoke pharmacy are both part of the same retail pharmacy business. The proposed legislative change seeks to remove this restriction, which would then allow hub and spoke dispensing models to operate between different legal entities (i.e. on an inter-group, as opposed to intra-group, basis). The inter-group model would make it possible for independent spoke pharmacies either to use the services of hub pharmacies that are part of a separate business or collaborate with other independents and invest in automation in one hub location.

There are different types of hub and spoke dispensing, depending on the method by which and whether the hub or the spoke is the entity which supplies directly to the patient. Irrespective of the type of hub and spoke model adopted in practice, the consultation document envisages that patients would always have access to a pharmacist and both the hub and the spoke operations would be required to be registered pharmacies.

However, the proposed model raises a number of legal issues in respect of accountability, compliance with other European legislation, where liability would lie and also in respect of data protection and data sharing between different legal entities, all of which would need to be satisfactorily addressed before any inter-group hub and spoke model could be adopted.

Due to significant concerns that were raised in response to the consultation, not least the inconsistencies between the proposals set out in the consultation and the wording of the published draft legislation, including the apparent widening of the proposals to allow for hub and spoke dispensing in “relevant clinical settings” (a term which is broad enough to include surgeries), the government announced that it would, for the time being at least, suspend the progress of the draft legislation and take time to further engage with stakeholders.

So for the time being at least, hub and spoke dispensing must remain within the same company, and the government will have to go back to the drawing board and either back up the merits of the inter-group model with robust evidence or find an alternative way to appease disgruntled contractors on whom it has forced such swingeing funding cuts.

1 Human Medicines (Amendment) (No.2) Regulations 2016
2 Judgment of the Court (Third Chamber) of 16 July 2015; Abcur AB v Apoteket Farmaci AB (C-544/13) and Apoteket AB and Apoteket Farmaci AB (C-545/13) 
For more information please contact:

Richard Hough

Partner and Head of Healthcare at Brabners LLP
Tel:  0151 600 3302

Competition Law and Pharmacy

Tuesday 13th September 2016

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Independent Community Pharmacist magazine article - Issue March 2016

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

The EU and UK competition law framework seeks to enable businesses which engage in economic activity (undertakings) to compete fairly and equally within the same market. However, many undertakings feel that competition within their market is distorted and that their competitors may operate with an unfair advantage. In this article, we will focus on competition law in the context of pharmacy businesses.

The wording of the Treaty on the Functioning of the European Union (TFEU) which sets out the European competition framework is broadly reflected in the UK’s Competition Act 1998 (the Act), where two main types of anti-competitive behaviour are prohibited.

Under Chapter I of the Act, agreements, decisions or concerted practices between undertakings which: (i) may affect trade within the UK; and (ii) intend to prevent, restrict or distort competition within the UK, are prohibited.

Common examples of such agreements are where two or more competing undertakings agree to fix the prices at which they sell their products to customers, or that each will sell to a particular type of customer. 

Chapter II of the Act also prohibits undertakings from abusing, in a way which may affect trade within the UK, any dominant market position they may hold. For example, a dominant undertaking (usually having at least 40% of the relevant market share) pricing its products unfairly or selling products at a loss, where smaller competitors are unable to do so, may be an abuse of a dominant position.  

Certain practices undertaken within the primary care setting may also potentially breach competition law.

Perhaps the most common complaint that affects pharmacy owners relates to ‘prescription direction’, which occurs when GPs direct their patients to one particular pharmacy in preference to another. As the trend of GP practices taking a financial interest in pharmacies increases, so does the risk of prescription direction. Prescription direction may amount to anti-competitive behaviour if the GP and pharmacy have entered into an oral or written agreement. However, the GP must also be considered to be an undertaking which engages in economic activity, which will be the case if it receives a payment from, or has a financial interest in, the pharmacy.

Additionally, larger chain pharmacies are able to offer products and services to customers at reduced prices to those of their smaller competitors. This may be classed as anti-competitive behaviour if such pricing is set at a level with which smaller competitors are unable to compete.

Larger pharmaceutical companies have also been known to enter into agreements with their competitors which prevents those competitors from marketing certain products at all, as recently illustrated by the investigation of GlaxoSmithKline by the Competition and Markets Authority (“CMA”), the UK’s primary competition and consumer authority. In that case, the CMA held that GlaxoSmithKline had made payments in excess of £50m to competing generic manufacturers in return for them not marketing cheaper generic versions of paroxetine.

These are not the only competition law issues that pharmacy businesses may encounter. Larger companies in particular may be subject to certain merger and acquisition controls, particularly where wholesalers and pharmacies are under common ownership. This is because wholesalers may choose to offer more favourable commercial terms to those pharmacies within its group over pharmacies outside of the group which it supplies but in which it has no direct financial interest. Equally, if two or more different pharmacies operating in one area have common ownership, it is easy to see how a monopoly of the supply of pharmaceutical services could be abused. This is a factor that NHS England considers when assessing pharmacy contract applications.

The CMA also recently investigated Celesio in relation to its proposed acquisition of Sainsbury’s pharmacies.  

Celesio operates over 1,500 pharmacies within the UK, whilst Sainsbury’s operates 277. The CMA identified that if the proposed acquisition was to proceed, there was a realistic prospect that customers in 78 local areas may be affected by a loss of competition. The CMA also stated that additional local areas may be affected by the acquisition affecting the pricing of products and narrowing the range of products available.

The CMA has highlighted that pharmacies also compete in relation to numerous other factors such as quality of advice, the scope of medications available, and opening and closing times of business.

The proposed acquisition will now be subject to an “in-depth phase 2 investigation” by an independent panel, where the parties will be given an opportunity to argue that the proposed acquisition will not result in a loss of competition.

The CMA’s investigation serves as a reminder to pharmacy businesses that a range of factors will be considered when assessing whether certain activities within the primary care setting are anti-competitive.

It is clear that this area of law is complex, so we recommend that pharmacy owners seek expert legal if they become aware of and wish to challenge anti-competitive practices. 

For more information please contact:

Richard Hough

Partner and Head of Healthcare at Brabners LLP
Tel:  0151 600 3302

Investigating Committee Guidance

Wednesday 7th September 2016

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Independent Community Pharmacist magazine article - Issue February 2016

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

On 18 December 2015, the General Pharmaceutical Council (“GPhC”) published new guidance, which sets out the role of the investigating committee (“IC”) in deciding the appropriate outcome when allegations against pharmacists are referred to it.  The guidance also explains how the IC should decide which cases to refer to the Fitness to Practise Committee (“FtPC”).

The guidance, “Good Decision Making: investigating committee meetings and outcomes guidance” (“the Guidance”), came into effect on 13 January 2016. 

The IC, which operates independently of the GPhC, holds a meeting when a concern about a pharmacist has been received and initially investigated by the GPhC.  Concerns can be dealt with at three different stages: (i) after the initial investigation; (ii) an IC meeting; or (iii) a FtPC hearing.

Threshold criteria are applied at the initial investigation stage, and if fulfilled, a registrant’s case is referred to the IC.  The Guidance covers such referrals to the IC, the IC’s decision-making process and the outcomes of IC meetings.  The IC must take into account the Guidance when making a decision on outcome.  If it departs from the Guidance, it should give clear reasons.

The IC is different to the FtPC in that it does not hear oral evidence from registrants or witnesses.  However, the registrant concerned will be invited to provide written representations to the IC on the allegation and on any recommendations the registrar makes for dealing with the case.

The IC has a range of outcomes it can decide on, depending upon its assessment of the evidence. These include: (i) taking no action; (ii) giving advice to the registrant; (iii) issuing a warning; (iv) agreeing undertakings with the registrant; and (v) referring the matter to the FtPC.

Before an outcome is reached, the IC may: (i) adjourn its meetings until it has more information; (ii) ask for further investigation; (iii) require a registrant to have a medical examination; (iv) get advice from a legal, clinical or other specialist advisor; (v) consider rescission (cancelling a referral to an FtPC); and (vi) tell the registrar that the GPhC should consider bringing criminal proceedings against the registrant.

In making its decisions, the must consider the “real prospect” test, pursuant to which it must:

  • consider the evidence and decide if there is enough information on which to reach a decision;
  • decide whether there is a real prospect of the fact of an allegation being proven;
  • decide whether the facts, if proven, would mean that there is a real prospect that the FtPC will make a finding that the registrant’s fitness to practise is impaired; and
  • decide on whether the matter ought to be considered by an FtPC or whether another outcome is more appropriate.

The IC conducts a limited paper-based exercise on the information before it but does not to make findings of fact. Its role is to decide whether any allegations should be considered by an FtPC.  The IC must clearly identify which allegations are supported by evidence and which are not.  It should clearly say what conclusions it has reached and why and how it has reached them. The IC must give a formal statement setting out its decision and its reasons for that decision, which should tell everyone involved in broad terms why the IC reached its decision. Decisions are shared with the person raising the concern, the registrant and, in some cases, the registrant’s employer.

In applying the real prospect test, the IC must consider: (i) the factual allegations; and (ii) the question of whether the facts, if proven, could demonstrate that the registrant’s fitness to practise is impaired.  A real prospect means that something must be a genuine possibility, not one that is merely remote or fanciful. The IC must first asses the evidence before it and decide whether there is a real prospect of the alleged facts being established.  Only then can it consider the second part of the test.  The IC should bear in mind that at a FtPC hearing it is for the Council to prove on the balance of probabilities the truth of the alleged facts. The second part of the test is that the IC should ask itself whether there is a real prospect that the FtPC will make a finding that the registrant’s fitness to practise is impaired.  This does not mean that the IC will decide whether the registrant’s fitness to practise is currently impaired. That is a decision for the FtPC.

If the IC concludes there is no real prospect of the FtPC deciding that the registrant’s fitness to practise is currently impaired, but decides that there is a real prospect of the alleged facts being proven, then it should consider whether an advice or warning is the appropriate sanction in the circumstances of the case. 

Registrants often consider that GPhC investigations lack transparency and are biased against the registrant. The Guidance sets out clearly what the IC can and can’t do and is a useful yardstick to hold it to account for its decisions.

For more information please contact:

Richard Hough

Partner and Head of Healthcare at Brabners LLP
Tel:  0151 600 3302

What is auto - enrolment?

Friday 12th February 2016

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Independent Community Pharmacist magazine article - Issue January 2016

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

Auto-enrolment is the requirement for every business in the UK with one or more employees to offer and contribute to a workplace pension scheme. In this article, we look at the obligations imposed on employers, potential compliance issues, and the sanctions for non-compliance.

Auto-enrolment applies to all businesses with at least one eligible employee. Your business will have a “staging date”, decided by your PAYE reference, which is the date by which you must be compliant with the auto-enrolment legislation.

For many pharmacy businesses with fewer than 50 employees, the relevant dates are between June 1, 2015 and April 1, 2017.

A year in advance of your staging date, you will receive, or may already have received, a letter from the Pensions Regulator informing you of your staging date.

It is important to be proactive and take steps to ensure that you are aware of the exact staging date that applies to your business. You can do this by visiting the Pensions Regulator website. Each business may postpone its staging date by three months. However, this can only be done once.

The requirements

Employers must offer and contribute to a workplace pension scheme for each eligible employee, (referred to in the enabling legislation as an “eligible jobholder”). An eligible jobholder is someone who:

  • Works in the UK
  • Is aged between 22 and the State Pension age
  • Has earnings that exceed £10,000 per annum
  • Is not already an active member of their employer’s qualifying scheme at the date they become eligible for auto-enrolment
  • Is not within a category of jobholders that are excluded

The £10,000 threshold prevents most low-paid or part-time employees from being included in the scheme. Exclusions to be aware of include:

  • Those employees who are working their notice period within six weeks from the staging date
  • Those who have an employment contract but work in another European Economic Area state.

Enroling eligible jobholders

As an employer, you must automatically enrol each eligible jobholder in a workplace pension. Eligible jobholders may choose to opt out of the scheme if they wish. However, you must not pressurise or provide incentives to encourage them to do so.

Even if you believe that all eligible jobholders will opt out of the scheme, you still need to put measures in place to fulfil your auto-enrolment obligations.

It is important to be aware that, if an eligible jobholder opts out of the scheme, they will be automatically re-enrolled every three years, and must then opt out again if they wish to do so.

For employees who have been automatically enrolled and have not opted out, you must contribute to their workplace pension in accordance with statutory employer contribution percentages. Employers must contribute a minimum of 1 per cent of “qualifying pay” for the first annual period, 2 per cent in the second period and then 3 per cent in each subsequent period.

It is important to be aware of these contribution obligations and to budget accordingly. Employees must contribute at least 1 per cent, 2 per cent and 4 per cent in the same periods, with tax relief added to these contributions. 

Calculating qualifying pay

'Qualifying pay' changes each year, but for now contributions are paid on annual earnings between £5,824 and £42,385. You can elect to make payments on employees’ earnings outside of this range if you wish, but employees cannot be forced to increase their statutory contributions.

Calculating qualifying pay is not straightforward, and may need to be calculated on a weekly or monthly basis. If in doubt, you should speak to your accountant or financial adviser for help.

In addition to the above requirements, there are record-keeping and reporting obligations that you must comply with.

Suitable auto-enrolment schemes are offered by most of the large insurance firms, as well as by organisations which have been established specifically for the purpose. There is also a government-sponsored scheme called the National Employment Savings Trust (NEST) which, unlike other schemes, is not allowed to reject applications.

IT implications

Auto-enrolment may also have implications for your IT systems. The payroll software that you use will have to know both what auto-enrolment is and which pharmacy employees qualify as eligible jobholders.

It would be sensible to consider now whether you will need to modify or change your existing payroll systems.

From the staging date, the law will presume that you have fulfilled all your auto-enrolment obligations. Fines can be imposed through penalty notices for non-compliance and these will continue to accrue until the discrepancies are resolved. Criminal sanctions can be imposed in extreme cases of non-compliance.

It is therefore important that you put appropriate procedures in place to prevent auto-enrolment from becoming a problem to your pharmacy business.

Consider how auto-enrolment will affect your business: what is your staging date? How many employees will be affected and how much will this cost your business? Which auto-enrolment scheme will you use?

For more information please contact:

Richard Hough

Partner and Head of Healthcare at Brabners LLP
Tel:  0151 600 3302