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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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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

Protect yourself from the Data Protection Act

Tuesday 1st December 2015

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Independent Community Pharmacist magazine article - Issue December 2015

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

The Data Protection Act can be a minefield for small businesses. Pharmacy law practitioner Richard Hough explains how Pharmacy2U fell foul of laws that protect patient information.

An online pharmacy, which sold details of 21,500 customers to marketing companies, has recently been fined £130,000 by the Information Commissioner’s Office (“ICO”). Pharmacy2U Ltd offered customer names and addresses for sale through an online marketing list company. The company advertised more than 100,000 customer details for sale at a price of £130 per 1000 records. Some of the companies that bought the information were of questionable repute.

At the outcome of its investigation into Pharmacy2U’s activities, the ICO found that Pharamcy2U had not informed its customers that it intended to sell their details, and that its customers had not given their consent for their personal data to be sold, both of which constituted a breach of the Data Protection Act 1998 (“DPA”). The company was found to have breached the first principle of the DPA regarding fair and lawful processing of data.

On its online registration form was a pre-ticked box, which users could untick if they did not wish to receive marketing emails from Pharmacy2U (an “opt-out”). However, the ICO investigation found that, by making this statement, the company had not been clear in its intention to sell customer data to third party organisations. Its intention to sell the data was hidden away in Pharmacy2U’s privacy policy.

Pharmacy2U responded in a statement on its website by saying:
“This is a regrettable incident for which we sincerely apologise. At the time, we believed we had the right processes in place to secure customer consent to receive third party marketing. As soon as the issue was brought to our attention, we stopped the trial selling of customer data and made sure that the information that had been passed on was securely destroyed”.

The company has now changed its privacy policy to highlight that it will no longer sell data and has moved to an ‘opt-in’, proactive consent model for its marketing.

An "opt-in" generally refers to a tick box which, if filled in by the user, indicates positively that they would like to be contacted by a particular form of communication. Unless the user ticks the box then the organisation cannot use their details for the form of marketing listed. This is in contrast with an "opt-out", where the default position is that the user will be contacted by that form of marketing, unless they tick the box to indicate that they would prefer not to be. The benefit to the business of opt-out over opt-in is that the default position for opt-out presumes the right to market, and requires no further action by the recipient. Average collection rates are therefore higher for opt-out, meaning more emails can be sent to more people.

So what can other pharmacy businesses learn from this episode?

Pharmacies routinely collect “sensitive personal data”, which is data that relates to the data subject’s health. Therefore, first and foremost you must abide by the DPA’s eight principles, namely, you must:

  • use the data fairly and lawfully
  • use it for limited, specifically stated purposes
  • use it in a way that is adequate, relevant and not excessive
  • ensure that it is accurate
  • keep it for no longer than is absolutely necessary
  • handle it according to people’s data protection rights
  • keep it safe and secure
  • not transfer it outside the European Economic Area without adequate protection.

If you wish to contact patients in order to promote other products or services offered by your pharmacy, then you must obtain consent, which must be knowingly given, clear and specific. An opt-in box should be used if possible.

The method by which you choose to contact patients is important, as stricter rules apply for communication by electronic means than for post. If contacted by post, an opt-out, rather than an opt-in, may constitute an acceptable form of consent.

You should keep accurate and contemporaneous records of how consent was obtained and the purposes for which it was obtained.
The DPA allows data subjects the right to object to direct marketing. You must stop making marketing approaches to patients who have opted out or which have objected to receive them.

How to sell data

Finally, if you wish to sell personal data to third party organisations, explicit informed consent must be obtained from the patient. Such consent is unlikely to have been fairly obtained through use of an opt-out tick box (unless it is accompanied by a properly drafted consent statement), so using explicit opt-ins is generally considered a safer approach.

Despite being in force for nearly 20 years, the DPA remains a minefield for the unwary. Whilst Pharmacy2U has accepted the consequences of its actions, it is certainly not alone in falling foul of the DPA’s requirements. We have also recently represented a healthcare practitioner whose attempts at implementing best practice and reducing errors led him unwittingly into the DPA minefield. Innovation and revenue generation are understandable goals for pharmacy businesses but if the utilisation of patient data forms part of these goals, don’t be tempted to turn a blind eye to the DPA.

For more information please contact:

Richard Hough

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


Patient records available to pharmacists

Wednesday 1st July 2015

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Independent Community Pharmacist magazine article - Issue July 2015

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

Pharmacy law practitioner Richard Hough looks at recent annoucment from The Health and Social Care Information Centre (HSCIC) and NHS England to give pharmacy professionals greater access to patients’ medical records.

The Health and Social Care Information Centre (HSCIC) and NHS England have announced that pharmacy professionals in community pharmacies in England will be given greater access to patients’ medical records. Community pharmacy professionals will be given the opportunity to access the summary care record (SCR), which provides key clinical information about a patient, sourced from the patient’s GP’s records. Implementation is expected to begin in autumn 2015. More than 96% of the population have an SCR, which is used by authorised healthcare professionals, with the patient’s consent, to support their care and treatment.

It is hoped that by allowing community pharmacy professionals to access the SCR, the need to signpost patients to other NHS care settings and for patients to contact their GP will be reduced.

The GPhC is supportive of the move, saying it believes giving patients the choice to allow pharmacy professionals to access their records can help them to receive better care.

Whilst there may be some resistance by GPs and patients to pharmacy professionals having greater access to patient medical records, such concerns are largely unjustified, as access to and processing of such data is strictly controlled by the pharmacy’s information governance requirements and data protection legislation.

The data held within pharmacy patient medication records (PMRs) and the SCR both constitute ‘sensitive personal data’ for the requirements of the Data Protection Act 1998 (the “DPA”). Schedule 1 of the DPA requires personal data to be processed ‘fairly and lawfully.’ The definition of ‘processing’ in relation to personal data includes the obtaining, recording and holding of data and the performance of any operation on the data, acts which are all already routinely undertaken by pharmacists in relation to the PMR.

In order for personal data to be processed ‘fairly and lawfully’, at least one of the conditions in Schedule 2 and, in the case of ‘sensitive personal data’, one of the conditions in Schedule 3 must be fulfilled. This latter requirement is of relevance to pharmacists’ access to PMRs and SCRs because the term ‘sensitive personal data’ includes data consisting of information relating to the data subject’s ‘physical or mental health or condition’.

Schedule 2 criteria include the requirement that the processing must: (i) take place with the data subject’s consent; (ii) be necessary for compliance with a legal obligation that applies to the data controller; or (iii) be necessary for the exercise of a statutory, governmental or public function.

Schedule 3 criteria include the requirement that any processing of ‘sensitive personal data’ in patient records must be: (i) done with the explicit consent of the patient; or (ii) deemed ‘necessary for medical purposes’.

The distinction made between a ‘data controller’ and a ‘data processor’ under the DPA is also significant in relation to pharmacists’ access to the SCR. Whereas a ‘data controller’ is defined as the person who determines the purposes for which and the manner in which any personal data is processed, a ‘data processor’ is any person who processes the data on behalf of the data controller. Data processors are not directly subject to the DPA, however most data processors will be data controllers if they process the data for their own administrative purposes. It would seem that pharmacists would be ‘data controllers’ of the data contained in the SCR and would therefore be subject to the requirements of the DPA, breach of which can lead to fines of up to £500,000, which in itself is a significant incentive to ensure that the strict protocols for accessing the SCR are followed.

New registration requirements for online medicine sales

From 1 July 2015, any UK-based online retailer that sells medicines to consumers within any European Economic Area (EEA) country must be registered with the Medicines and Healthcare products Regulatory Agency (MHRA). They must also display the EU common logo for online retailers and pharmacies, together with a hyperlink to the retailer’s entry in the MHRA’s list of registered retailers, on every page of its website that offers to sell medicines to the public. These new requirements also apply to companies selling medicines through a third-party marketplace website.

Only one company can be named on each registration, but multiple websites can be registered against that company’s registration. The aim of the new requirements is to help the public check whether the website they are visiting can legally sell medicines and reduce the risk of buying counterfeit products.

The EU common logo was introduced under the Falsified Medicines Directive, which is transposed into UK law through amendments to The Human Medicines Regulations 2012.

This is a different scheme to the one run by the GPhC. The EU common logo is a legal requirement across Europe whilst the GPhC runs a voluntary logo scheme, which is applicable only to registered pharmacies.

The penalty for selling medicines online without being registered and not displaying the common logo is up to 2 years in prison or a fine or both.

For more information please contact:

Richard Hough

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

The dishonesty test

Monday 1st June 2015

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Independent Community Pharmacist magazine article - Issue June 2015

Press clipping: Pharmacy and the Law Copyright CIG Ltd.

The GPhC recently directed its FTP committees to use a different test for dishonesty at hearings. Pharmacy law practitioner Richard Hough explains what this means in practice.

Two similar case law tests for dishonesty are commonly applied by professional bodies’ disciplinary committees. These tests are applied when a pharmacist’s honesty is called into question at a General Pharmaceutical Council (GPhC) fitness to practise (FTP) hearing.

The Ghosh test derives from the criminal case of R v Ghosh [1982] and has two limbs:

  1. An objective limb - the court must first decide whether according to the ordinary standards of reasonable and honesty people what was done was dishonest; and
  2. A subjective limb - if it was dishonest by those standards, then the court must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest.

The Twinsectra test derives from Twinsectra Limited v Yardley [2002].  Whilst the Twinsectra test is similarly worded, it does not require that the court has to be satisfied that the defendant “must” have realised that his actions were by the standards of ordinary people dishonest in order to satisfy the subjective limb.

The Twinsectra standard requires that “before there can be a finding of dishonesty, it must be established that the defendant’s conduct was dishonest by the ordinary standards of reasonable and honest people and that he himself realised that by those standards his conduct was dishonest i.e. that dishonesty requires knowledge by the defendant that what he was doing would be regarded as dishonest by honest people.

The GPhC’s position

The GPhC’s recent consultation, in which it sought views on whether “the draft hearings and sanctions guidance clearly sets out our governing council’s position where the issue of dishonesty forms part of the allegation”, received some critical responses.

As a result, the GPhC has accepted that the Ghosh test is “not appropriate, open to interpretation and outdated and should therefore not be included” in FTP hearings when the issue of dishonesty is being considered. Its indicative sanctions guidance, which is used in FTP proceedings, will be amended accordingly.

The issue of dishonesty is a rapidly evolving area of law and it is important for pharmacists that FTP committees apply the correct test to the correct standard of proof before a finding of dishonesty is made against a pharmacist, which in most cases results in the registrant’s removal from the register.

It is important to distinguish between the civil standard of proof, which is “on the balance of probabilities” and the criminal standard of proof, which is “beyond reasonable doubt”. The former simply means that the occurrence of the event in question was more likely to have occurred than not. In the latter, the standard is that no other logical explanation can be derived from the facts except that the defendant committed the crime, thereby overcoming the presumption that a person is innocent until proven guilty. Understandably, given that criminal sanctions can be imposed when findings of dishonesty are made, the latter standard is higher than the former. In FTP cases, the (lower) civil standard of proof is used.

Ghosh or Twinsectra?

The case of R (Professional Standards Authority for Health and Social Care) v Health and Care Professions Council and others [2014] highlighted the difficulties that disciplinary bodies have in applying the correct test to the correct standard of proof. In this case, when considering the question of dishonesty, the committee was directed that “they should apply the civil standard of proof and that the test of dishonesty that they should apply was that set out in Ghosh”. This resulted in the committee applying the wrong standard of proof because the use of the word “must” in the subjective limb of the Ghosh test meant that the “the subjective element formulated in Ghosh is expressed in the language of the criminal standard of proof.”  The committee was meant to apply the civil standard when considering the factual particulars in this FTP case.

The difficulty with the Ghosh test in the context of disciplinary hearings arose simply from the use of the word “must” in the subjective limb of the test, i.e. that the registrant “must have realised that what he was doing was …. dishonest.” The Concise Oxford Dictionary defines “must have” in conjunction with the verb to do as:

  1. “surely did or has done” and
  2. “necessarily would have done.”

If this definition is applied in the context of disciplinary proceedings, you can see that if an FTP committee is asked to find on the balance of probabilities that a registrant surely did, or necessarily would have known something, a requirement which appears to necessitate the exclusion of all other possibilities, this might prove, if not impossible, certainly contradictory and confusing.

So, it appears that in ditching the Ghosh test, the GPhC will direct FTP committees to apply only the Twinsectra test, namely that any finding of dishonesty will require a decision as to whether the registrant acted dishonestly by the ordinary standards of reasonable and honest people and, if so, whether he was aware that by those standards he was acting dishonestly. 

For more information please contact:

Richard Hough

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