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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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The GPhC sanctions review

Monday 2nd February 2015

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Independent Community Pharmacist magazine article - Issue February 2015

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

The GPhC is reviewing its Indicative Sanctions Guidance to ensure consistency. Pharmacy law practitioner Richard Hough explains what this means for registrants.

Pharmacists and pharmacy technicians who fall short of the standards that the public can reasonably expect of them may have their fitness to practise called into question. If the matter is referred to the General Pharmaceutical Council (GPhC), the registrant may be required to attend a hearing before the Fitness to Practise (FTP) committee. 

The GPhC is currently reviewing its Indicative Sanctions Guidance (the Guidance), which is the primary document that FTP committees use to guide their decision making, to help make sure that this part of the professional disciplinary process is consistent, insofar as is possible. The Guidance, which in its revised form will be called the Hearings and Sanctions Guidance, is referred to at the final stage of FTP hearings when the committee considers the appropriate sanction, which may include: 

  • No action

  • Issuing advice or warning

  • Imposing conditions

  • Suspension for a period not exceeding 12 months

  • Removal from the register.

In particular, the GPhC wants to clarify how FTP committees should approach specific behaviours, such as sexual misconduct and dishonesty, which it believes are incompatible with continued registration and breaches of a registrant’s duty to act openly and honestly when things go wrong (duty of candour).

The GPhC intends to “strengthen” its position on cases that involve sexual misconduct. Section 14 of the Guidance states that where sexual misconduct has been proven in a FTP case, removal from the register may be appropriate. In strengthening its stance, it appears that the GPhC is recommending, where sexual misconduct is proven, even when there is no criminal conviction, removal from the register will (as opposed to may) be the appropriate sanction. The FTP committee will be guided to carefully consider the context of any inappropriate relationship and the vulnerability of those involved.

The GPhC recognises that cases involving dishonesty can be complex and FTP committees should carefully consider the context and circumstances in which the registrant’s dishonesty occurred. It therefore considers that there should not be a presumption of removal in all cases involving dishonesty.  This is slightly different to the Guidance, in which FTP committees are guided to consider removal from the register in all cases where dishonesty has been proven. It should be welcomed that the GPhC is attempting to provide greater clarity on when removal from the register may be appropriate in such cases and when it is right for FTP committees to consider other sanctions.

Registrants should be open and honest with patients, especially when something goes wrong with their treatment. The GPhC is committed to learning from the Francis Report, which was produced further to allegations of poor patient treatment at Mid-Staffordshire NHS Foundation Trust, where failures to be candid led to patient harm, so the revised guidance will contain a new section on the duty of candour.  The GPhC recommends that FTP committees should consider sanctions at the upper end of the scale (i.e. suspension or removal) when a registrant has failed to be candid, tried to cover up problems, encouraged others not to tell the truth or fostered a culture which does not encourage candour. 

When FTP committees are considering the appropriate sanction, they must consider any aggravating (those that make what happened more serious) or mitigating (those that make what happened less serious) factors and any actions undertaken by the registrant since the allegation. The Guidance contains a list of aggravating and mitigating factors for consideration by the FTP committee at the sanction stage. Although the GPhC accepts that there may be good reason to retain this approach, which provides a helpful reference point for FTP committees, registrants and their legal advisers, the GPhC considers that listing these factors potentially stifles the FTP committee’s decision making. The GPhC therefore recommends removing the list of aggravating and mitigating factors and replacing it with a general section on how to take into account any such factors. 

I disagree with this recommendation and with the view that the existing approach stifles decision making, not least because the Guidance clearly states that the list of aggravating and mitigating factors is illustrative and not exhaustive, which therefore presupposes that FTP committees may consider other relevant factors in determining the appropriate sanction. Such lists work well in other areas of law as a useful guidance tool, which aids clarity and transparency in decision making.  For instance, in the Crown Prosecution Services Sentencing Manual, the expected sanctions are stated for each criminal offence and the effect of various aggravating and mitigating factors can be taken into consideration in order to either increase or decrease the standard sanction. It would be to the detriment of transparency if this approach was removed, albeit further additional general guidance for FTP committees on how to apply such factors should be welcomed.

The revised guidance will be published after the GPhC considers the responses to the consultation.

For more information please contact:

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

GPhC guidance in distance selling

Friday 2nd January 2015

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Independent Community Pharmacist magazine article - Issue January 2015

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

Pharmacy law practitioner Richard Hough considers a consultation on draft GPhC guidance for pharmacies providing internet and distance sales

On 17 September 2014, the General Pharmaceutical Council (GPhC) launched a consultation on its draft guidance for registered pharmacies providing internet and distance sales, supply or service provision, which is designed to help pharmacy owners ensure that current and future pharmacy services continue to safeguard the health, safety and wellbeing of patients and the public. 

We act for an increasing number of providers of internet pharmacies and have had increased  interest from pharmacists wishing to know about the legal constraints of alternative models of service delivery undertaken on a ‘distance selling’ basis, such as ‘click and collect’, mail order services and ‘hub and spoke’. In this respect, the guidance is timely. The GPhC has recognised the increasing popularity of these types of services, which also include collection and delivery services and electronic transfer of prescriptions, and has highlighted the need for pharmacy owners to manage the additional risks associated with those types of services which are not undertaken wholly on a face to face basis between their staff and the service recipient at a registered pharmacy.

Unfortunately, the guidance contains limited detail but the GPhC has chosen to highlight a number of areas of focus for pharmacy owners where it expects service-specific risks to be managed and evidence to be produced to demonstrate that such types of service are legally compliant and properly managed. The guidance applies in all cases where one or more parts of the sale or supply of medicines or pharmacy services are provided over the internet or in other forms of distance selling. In particular, it applies in all cases when pharmacy staff and the service recipient are not both present together in the registered pharmacy. Responsibility for compliance with the guidance, which is grouped under the following five principles, lies with the pharmacy owner or the superintendent pharmacist. 

Principle 1: The governance arrangements safeguard the health, safety and wellbeing of patients and the public. 

Owners will be expected to undertake tailored risk assessments for each part of the pharmacy service that is provided on a distance selling basis and will need to produce evidence to demonstrate that such assessments have been undertaken. Where applicable, risk assessments should reflect the risks associated with any separation of pharmacy service provision. Owners should ensure that their IT systems which exchange information between different locations do so securely and in compliance with data protection and data security requirements. 

Procedures for handing over medicines to patients other than those which are physically present at the pharmacy premises carry an increased risk. Owners must demonstrate that they understand the lines of responsibility and accountability for staff who provide parts of the pharmacy service where no pharmacist may be present or direct that element of the service. It is especially important where pharmaceutical services are provided on a distance selling basis that records are kept to demonstrate the safety of the service provided and that evidence is obtained to support clinical judgements made. 

Principle 2: Staff are empowered and competent to safeguard the health, safety and wellbeing of patients and the public. 

Owners must ensure that staff are competent and have undertaken the relevant training before being involved in any element of distance selling services. This may include training on information security management, the Data Protection Act and cyber security.

Principle 3: The environment and condition of the premises from which the pharmacy services are provided and any associated premises safeguard the health, safety and wellbeing of patients and the public.

All pharmacy premises must comply with relevant medicines legislation. Websites which promote the sale of pharmacy medicines must be operated by a registered pharmacy. Website owners will be required to demonstrate that their websites are secure and comply with information security management guidelines. Relevant information, including the pharmacy’s GPhC registration number, should also be included on the website. New legislation is expected to come into force in July 2015, further to which all organisations which sell medicines over the internet will need to display an EU approved internet pharmacy logo in a prominent position on the website. 

Principle 4: The way in which pharmacy services, including the management of medicines and medical devices, are delivered safeguards the health, safety and wellbeing of patients and the public.

Internet pharmacies pose further risks in respect of the identity of the patient. Owners will need to ensure that systems are implemented to ensure that medicines are delivered safely to the correct person when needed. How information is provided to the patient should be carefully considered so that patients can use medicines safely without having had face to face contact with the pharmacist at the pharmacy premises. Owners should obtain fully informed patient consent where elements of the services take place at different locations.

Principle 5The equipment and facilities used in the provision of pharmacy services safeguard the health, safety and wellbeing of patients and the public.

Owners should ensure that any specialist equipment and facilities are of sufficiently high specification, accurate and secure for their intended purpose.

The deadline for responding to the GPhC’s consultation is 10 December 2014.

For more information please contact:

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



Purchasing a distressed pharmacy business

Tuesday 16th September 2014

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Independent Community Pharmacist magazine article - Issue September 2014

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

Community pharmacies continue to operate in a challenging commercial environment. Unfortunately, not all of them manage to stay afloat. So what happens when a pharmacist proprietor can no longer fight the financial tide and is forced to instruct an insolvency practitioner? What benefits are there to be had and what risks face the speculator when an opportunity arises to purchase a distressed pharmacy business?

Firstly, buying a distressed pharmacy business can be a great opportunity to acquire a business quickly and at a competitive price. However, the reduced price should reflect the additional risks assumed by the purchaser. Therefore, specialist legal advice should always be sought when acquiring a distressed pharmacy business as a going concern, or even just its assets, from an insolvency practitioner.

An insolvent pharmacy can be put into a number of different insolvency processes. The most likely ones, that would enable a buyer to acquire a pharmacy business as a going concern, are either a Company Voluntary Arrangement (“CVA”) or an Administration.

Alternatively, a company operating a pharmacy could be placed into liquidation, where a liquidator closes down the business with no ongoing intention to trade. It would be difficult to purchase a pharmacy as a going concern from a liquidator, although individual assets (such as stock, assignable contracts and fixtures and fittings) could be purchased.

A CVA is an agreement between a company’s creditors and the company itself in settlement of the company’s debts. It can be used as a mechanism to allow the company to continue to trade under the control of the existing directors, pending the sale of the business and its assets. Once the CVA is agreed by the creditors, the CVA creditors cannot take action against the company unless the terms of the CVA are breached. The CVA might therefore be used to give the company breathing space in which to arrange the transfer to a buyer of the right to be included in the pharmaceutical list (the “NHS contract”), whilst allowing the company’s directors to continue to trade it pending the transfer of the NHS contract and the sale of the business. Approval for the transfer of the NHS contract can take several weeks and potential purchasers should be aware that creditors may take action against the company before the terms of the CVA are agreed. Therefore, the company will be at risk during this period.

An Administration protects the company against creditor action both before and during the Administration. The Administrators take control of the business upon their appointment and the existing directors’ powers cease. Administrators are normally inclined to sell a business quickly and are sometimes reluctant to trade a business in Administration. This may cause an issue for a potential purchaser, who will need time to secure the transfer of the NHS contract before acquiring the business.

If the Administrators are reluctant to trade the business in Administration, they might agree to grant a licence to a buyer to operate the pharmacy pending the transfer of the NHS contract and completion of the sale. Given the complications of this process, the Administrators and the buyer would normally need time prior to the Administration to agree the commercial terms and legal documents. The licence could then be granted and the contract for sale exchanged as soon as the Administration commences.

An Administrator is likely to seek to exchange contracts at an early stage with completion deferred pending receipt of approval of the transfer of the NHS contract, on the basis that the purchaser will purchase the pharmacy stock and take over its operation (and overhead costs) from exchange of contracts. There are a number of risks for a purchaser during this interim management period. In particular, a purchaser should consider its statutory liability for transferring employees on exchange of contracts (even if the sale does not complete) and the risk of paying part of the purchase price ahead of completion.

When a business is sold as a going concern, the price for the pharmacy stock and equipment is normally payable in addition to goodwill and is verified by an independent stock valuer on completion. The purchaser should undertake due diligence to ascertain whether the stock has been paid for and, if not, whether it is subject to retention of title restrictions. The purchaser will normally assume the risk of having to deal with unpaid suppliers and the price paid should therefore reflect this risk.

The purchaser will often require a lease assignment, which normally requires landlord’s consent. In such circumstances, where time pressures are great, Administrators may grant the purchaser a short term licence to occupy the premises for the period during which the purchaser negotiates with the landlord. However, purchasers should be aware that an Administrator can terminate the licence to occupy without notice. If the purchaser cannot relocate the pharmacy on completion of the acquisition, it should consider making payment of the purchase price conditional upon securing the assignment of the lease.

Please contact either Richard Hough on 0151 600 3302 or if you are thinking of acquiring a distressed pharmacy business or if you require any assistance on insolvency matters generally.

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Pharmacy and the Law (Independent Community Pharmacist magazine) The final word on regulation - May 2014

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Pharmacy and the Law (Independent Community Pharmacist magazine) Control of entry amendments - April 2014

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Pharmacy and the Law (Independent Community Pharmacist magazine) Medicines quotas - December 2013

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Pharmacy and the Law (Independent Community Pharmacist magazine) Innovating for higher standards - November 2013

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