THE battle for the future of pharmacies is poised to step up a gear amid accusations that an Office of Fair Trading report on the deregulation of the pharmacy sector is “damaged goods” because its director general John Vickers served as an adviser to supermarket chains in the 1990s.
Independent chemists believe that Vickers’s past role undermines the impartiality of the recent report, which last week surprised analysts with the extent of the liberalisation proposed.
The report, on the control-of-entry to the pharmacy market, followed pressure from supermarket chains which are keen to open pharmacies in most of their stores.
Nigel Cumming, managing director of independent pharmacy chain Lindsay & Gilmour, said: “The OFT report on pharmacy reads like something produced by a supermarket PR department to make a seriously flawed argument sound convincing. It is full of logical inconsistencies, errors, omissions of vital evidence and exaggeration of supporting evidence.
“How and why has the OFT come up with a report, where the evidence and arguments appear to flow from the conclusion, rather than the other way round? Is it incompetence or is it intrigue?”
The report, which is currently being mulled over by the Scottish Executive and the UK Department of Health, urged complete deregulation in the sector.
Surprisingly, Vickers ruled himself out of overseeing the heated bidding contest for supermarket chain Safeway because of his previous commercial involvement in the sector.
In the mid-1990s he carried out some private (and still confidential) merger advisory work for an unnamed supermarket, while a professor of political economy at Oxford University.
John D’Arcy, chief executive of the National Pharmaceutical Association, said: “Mr Vickers considers he has a conflict because of previous work with supermarkets. The OFT recommendation is based heavily upon the impact supermarkets will have as new entrants to the market.
“Against this background, Vickers should have declared an interest and recused himself in the matter. There is now a big question mark over the objectivity of the report.”
An OFT spokesperson defended Vickers, saying: “This is a completely different issue. Pharmacies was a market study whereas John Vickers had been involved in supermarket merger work in the mid 1990s. There is no bias towards supermarkets.”
The distinction was lost on the NPA, which represents the interests of about 11,000 community pharmacies in the UK.
The NPA and its affiliate, the Scottish Pharmaceutical Federation, are lobbying against the liberalisation of restrictions that control the opening of pharmacies. To open a pharmacy able to dispense NHS prescriptions requires the consent of a local authority.
Cumming has written to MPs asking them whether they believe the report meets “the kinds of standards we should expect of a regulatory authority”. He has also written to MSPs asking to reject the report. The regulation of pharmacies is a devolved matter, under healthcare.
Cumming added: “The problems of the past are ignored, there is no serious analysis of how such a system would work in practice, whether it would actually result in a more efficient service and no analysis of what the impact would be on primary and secondary care. Regulations first brought in to prevent unproductive and wasteful competition for sites, and to channel competitive energies into producing the best service at minimum cost are glossed over.”
Lindsay & Gilmour is one of three independent Scottish pharmacy chains owning 20 or more pharmacies. Its 23 shops are located in eastern Scotland in the central belt and Borders.
A spokesman for the Scottish Executive said the OFT report would be “given extensive consultation”. However he said the Scotland Act gives the executive the ability to reject the OFT recommendations should they interfere with its own primary care policy.
Deputy health minister Frank McAveety last week seemed to suggest he is minded to reject the proposals. He said: “We greatly value community pharmacies and we’re committed to working in partnership with them as part of our primary care policy.”
This article was published in the Sunday Herald on 2 February 2003