Schedule 12

Health and Social Care Bill – in a Public Bill Committee at 1:30 pm on 24th January 2008.

Alert me about debates like this

Funding of expenditure in connection with provision of pharmaceutical services

Photo of Sandra Gidley Sandra Gidley Shadow Minister, Health

I beg to move amendment No. 229, in schedule 12, page 167, line 11, at end insert—

‘1A (1) Section 164 of the NHS Act (remuneration for persons providing pharmaceutical services) is amended as follows.

(2) In subsection (1), for “determining authorities” substitute “the Secretary of State”.

(3) Omit subsection (2).

(4) Omit subsection (3).’.

Photo of Derek Conway Derek Conway Conservative, Old Bexley and Sidcup

With this it will be convenient to discuss the following amendments:

No. 230, in schedule 12, page 167, line 11, at end insert—

‘1B (1) Section 165 of the NHS Act (section 164: supplementary) is amended as follows.

(2) In subsection (3), omit paragraph (b).

(3) In paragraph (4)(b), for “determining authority” substitute “Secretary of State”.

(4) In paragraph (5)(a), for “determining authority” substitute “Secretary of State”.

(5) In subsection (9), for “determining authority” substitute “Secretary of State”.’.

No. 240, in schedule 12, page 167, line 22, at end insert—

‘( ) at the end of subsection (10) insert—

“but shall give directions to a Primary Care Trust with respect to remuneration determined by him in accordance with section 164(3).”’.

No. 241, in schedule 12, page 167, line 36, at end insert—

‘3A (1a) The Secretary of State shall designate any element of remuneration determined by him in accordance with section 164(3) which is not remuneration referable to the cost of drugs.’.

Photo of Sandra Gidley Sandra Gidley Shadow Minister, Health

Clause 130 and schedule 12 deal with money for payment of pharmaceutical services, commonly known as the global sum. Currently the nationally agreed figure is administered nationally and everyone knows what the situation is. In its consultation, “Modernising Financial Allocations for NHS Pharmaceutical Services 2007”, the Department of Health proposed devolving the global sum to primary care trusts’ baseline allocation. In doing so, the Department stated that it would

“continue to set the levels of fees and allowances for community pharmacies in negotiation with the Pharmaceutical Services Negotiating Committee and in discussions with the NHS”.

The Bill introduces the necessary amendments to the National Health Service Act 2006 to permit the global sum to be devolved, but does not include provisions to ensure that the Secretary of State will continue to set the levels of fees and allowances nationally, following consultation with the Pharmaceutical Services Negotiating Committee. Clearly there is concern that the longer term aim is perhaps to have different fees in different areas and fees set by primary care trusts.

Currently, section 228 of the National Health Service Act 2006 requires the Secretary of State to pay sums equal to pharmaceutical services expenditure to primary care trusts. Such sums are distinct from the main expenditure and require the Secretary of State to determine the remuneration of persons providing pharmaceutical services after consulting with the Pharmaceutical Services Negotiating Committee. The Bill removes the distinction between pharmaceutical services expenditure and a primary care trust’s main expenditure from section 228 and therefore removes any obligation to make a determination of the remuneration of persons providing pharmaceutical services. To give effect to the stated intention of the Department of Health to continue to set the levels of fees and allowances for community pharmacies in negotiation with the Pharmaceutical Services Negotiating Committee, the Bill must retain an obligation on the Secretary of State to determine some elements of the remuneration of persons providing pharmaceutical services. In its current form the Bill does not do that.

The Bill amends schedule 14 of the National Health Service Act 2006 and adds a new paragraph 3A. That will authorise the Secretary of State to designate elements of remuneration payable by primary care trusts to persons providing pharmaceutical services, which is not remuneration referable to the cost of drugs. The designation has two effects; first, the Secretary of State will be obliged to apportion the total to primary care trusts—that will be accomplished by transferring the global sum—and secondly it will make primary care trusts accountable for those sums. Almost all fees and allowances paid to persons providing pharmaceutical services are not referable to the cost of the drugs being provided. However, the Secretary of State is under no obligation to designate any elements of the remuneration. To give effect to the Department of Health’s intention to continue to set the levels of fees and allowances for community pharmacies in negotiation with the Pharmaceutical Services Negotiating Committee the new paragraph 3A should oblige the Secretary of State to designate certain elements of remuneration. That is what the amendments would do.

Section 164 of the 2006 Act provides that the Secretary of State is a “determining authority” who determines the remuneration to be paid to persons who provide  pharmaceutical services. However, he may also authorise any primary care trust to be a determining authority, which is particularly needed to allow primary care trusts to determine payment for locally commissioned enhanced services. Some fees and allowances apply to all persons providing pharmaceutical services, for example the dispensing fee. In its consultation, the Department emphasised the importance of continuing to set the level of those nationally.

Section 165 of the 2006 Act requires that before the Secretary of State makes a determination that relates to all persons who provide pharmaceutical services, such as a determination of dispensing fees, he should consult a body appearing to him to be representative of persons to whose remuneration the determination would relate, namely the Pharmaceutical Services Negotiating Committee.

Sections 164 and 165 do not place an obligation on the Secretary of State to determine the remuneration of persons who provide pharmaceutical services and the Secretary of State could, with no further legislative amendment, decide to authorise primary care trusts to determine remuneration for persons providing pharmaceutical services, including dispensing fees. The community pharmacies in England provide an accessible health care resource that is greatly valued by members of the public. In a recent Reader’s Digest survey only firefighters were more highly valued. It is a very useful health resource. Other health care professionals such as doctors and dentists have nationally agreed fee structures. 85 per cent. of a typical community pharmacy’s income comes from the NHS and certainty of income levels from this source is essential.

The payment by primary care trusts of remuneration to persons providing pharmaceutical services, which has been determined by the Secretary of State, must be mandatory. Unlike providers of general medical services, who have legally enforceable contracts, providers of pharmaceutical services do not operate under a contract that can be enforced by the provider. The Secretary of State may issue directions to PCTs with respect to the application of sums paid to them and to ensure that the fees and allowances determined by the Secretary of State, after consultation with the Pharmaceutical Services Negotiating Committee, are properly paid to persons providing pharmaceutical services. Direction must be issued to oblige PCTs to pay that remuneration.

There seems to be some uncertainty about the future of the payments. We are seeking to regularise a situation where the Government have made promises that do not appear to be incorporated in the Bill. I hope that the Minister will look kindly on the amendments. There is one small problem with the transfer of the global sum: because payments are made in arrears, the transition from one method of payment to another needs to be looked at carefully to ensure that PCTs have their act together and that there is no hiccup in the distribution of payments.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North 1:45 pm, 24th January 2008

I have had these problems explained carefully to me by a representative of pharmacists, and I ask my hon. Friend the Minister  to ensure that whatever the Government do, they protect those local pharmacies who would find these problems difficult and might have their continued existence threatened. Local pharmacies are important for local communities, and I want to ensure that that is taken into account. I am not suggesting support for the amendment, but I hope that my hon. Friend will take into account what has been said.

Photo of Anne Milton Anne Milton Shadow Minister (Health)

I want to reiterate the point made by the hon. Member for Luton, North. Local pharmacies almost have an air similar to local post offices—a big topic at the moment. Local pharmacies are increasingly important in the delivery of some preventive matters, such as screening, and in respect of issues such as chlamydia, pregnancies and all the rest. It is important that any change does not undermine their business or make it more difficult for them to continue.

Photo of Ben Bradshaw Ben Bradshaw Minister of State (Regional Affairs) (South West), The Minister of State, Department of Health

Hon. Members have raised some important points. These are matters of concern to pharmacists. I will spend a little time dealing with the concerns raised by the hon. Member for Romsey. Amendments Nos. 229 and 230 would remove the ability for anyone other than the Secretary of State to determine the remuneration paid for the provision of pharmaceutical services. Current legislation enables the Secretary of State to determine such remuneration himself or to authorise others, such as PCTs, to do so. Under these amendments, the Secretary of State would have to set the fees, allowances and payments for all categories of pharmaceutical services, whether those services were agreed nationally and provided by all pharmacy contractors, or commissioned locally by PCTs from certain pharmacies to meet local needs—for example, services for drug misusers. That would undermine the existing community pharmacy contractual framework, whereby PCTs determine the remuneration for the local enhanced services that they commission and fund from community pharmacies.

I share the hon. Lady’s desire for the NHS to commission a wider range of services from pharmacies. They are often in the most accessible location and can provide services tailored to meet local community needs. Having attended its annual conference last year, I know that that view is also held by the pharmacy profession, the all-party group on pharmacy and others. We believe that the amendments would undermine the ability of local PCTs to continue to commission existing local enhanced services from pharmacies, never mind extending the services that they fund through pharmacies.

Amendment No. 240 would require the Secretary of State, where he determines remuneration for pharmaceutical services, also to give directions to PCTs in respect of that determination of funding. That is unnecessary because, where the Secretary of State has made a determination of the fees and allowances to be paid to community pharmacy contractors, that determination has to be honoured by PCTs. So that amendment would add nothing.

Amendment No. 241 would require the Secretary of State to designate any element of remuneration determined by him for pharmaceutical services. Designation allows costs to be charged to a PCT other than the PCT where the pharmaceutical service was provided. That would enable certain elements of  pharmaceutical services to be charged to the PCT where a prescription was issued, while other costs would be borne by the PCT where the pharmacy was based, thus avoiding a PCT with a pharmacy that provides services to a wide area—such as an internet pharmacy—inappropriately bearing the costs of pharmaceutical services for people resident elsewhere. Designation would not be appropriate for certain types of expenditure, which will be borne by a PCT where the pharmacy providing the service is based. That amendment would require the Secretary of State to make a designation in respect of all remuneration determined by him for pharmaceutical services, even where such a designation is inappropriate.

When the Department consulted on the proposals, we indicated our intention for the Secretary of State to continue to determine the fees and allowances for the national elements of the community pharmacy contractual framework, in negotiation with the Pharmaceutical Services Negotiating Committee and in discussion with the NHS. Those national elements are the essential services provided by all pharmacy contractors and advanced services, such as medicines use reviews, which pharmacies choose to provide.

Concerns have been raised, including by the hon. Lady today, that that might not continue to be the case. We recognise that pharmacy owners need to know the remuneration that they will receive for those substantive parts of the contractual framework, so that they have the confidence to continue to invest in their businesses. I should like therefore to take the opportunity strongly to reinforce our commitment that the Secretary of State will, indeed, continue to set the fees and allowances for the national elements of the community pharmacy contractual framework. In light of those reassurances, I hope that the hon. Lady will withdraw her amendment.

Photo of Sandra Gidley Sandra Gidley Shadow Minister, Health

I thank the Minister for the explanation. Clearly, as he said, it is important that enhanced services continue to be commissioned locally. I fully support that. I do not want any unintended consequence for enhanced services, so the amendments may not be perfect. I was pleased to hear the Minister’s clarification that the intention is for the Secretary of State to continue determining national rates. Will he write to clarify where that is stated in the Bill? Also, where is the protection that I alluded to during my opening comments, so that payments cannot be determined by PCTs in the future? I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 12 agreed to.