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Lord Hunt of Kings Heath moved Amendments Nos. 223 and 224:

    Page 42, line 30, at end insert--

"( ) for a period which must elapse before an application, or a further application, may be made under section 49M(5)(a) above;".

On Question, amendments agreed to.

Clause 34, as amended, agreed to.

[Amendment No. 225 not moved.]

Clause 35 [Pilot schemes]:

Earl Howe moved Amendment No. 226:

    Page 44, line 26, leave out "(other than practitioner dispensing services)".

The noble Earl said: In moving the amendment, I speak also to Amendments Nos. 227 and 227AA, which follow it. Clause 35 deals generally with local pharmaceutical services pilot schemes. Clause 35(8) seeks to describe the terms "pharmaceutical services" and "local pharmaceutical services".

The amendment seeks to clarify that dispensing doctors' administrative arrangements for prescription dispensing may also be included in the consideration

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of local pharmaceutical services. Local pharmaceutical services pilots are an experiment to investigate more efficient contractual arrangements for dispensing prescriptions. There will be an opportunity to diversify beyond pure dispensing. Health authorities have a duty to make arrangements for prescriptions to be dispensed. In rural areas a retail pharmacy business tends to be unprofitable, so the duty to dispense prescriptions falls on the GP's surgery. In fact all GPs can provide personally administered items such as injectables to patients.

There are approximately 4,300 dispensing doctors in the United Kingdom, serving some 3.5 million patients from around 1,100 mainly rural practices. Dispensing doctors make profits from their dispensing in a slightly different way from pharmacies. These profits are essential in ensuring the provision of GPs in rural areas. I believe that dispensing doctors and their patients should be allowed the same choice of contractual arrangements. It would be a shame if sensible co-operation between dispensing doctors and their neighbouring pharmacies were specifically prohibited.

This amendment would allow for that co-operation in providing local pharmaceutical services. Excluding dispensing doctors from local pharmaceutical services pilots may cause unfair competition in the rural pharmacy market, with the resulting loss of much-needed medical services to the rural community. It could also result in the closure of small independent pharmacies which are so valued for the personal service that they provide. As I understand them, local pharmaceutical services pilot schemes are not intended to open up the market for existing business. If that is the unintended result, then dispensing doctors should be allowed to compete.

On Amendment No. 227AA, in Committee in another place the Government introduced an amendment to Schedule 2, which is now paragraph 5(1). This means that proposals for a pilot scheme must, quite rightly, include an assessment by the health authority of the likely effect of the pilot on existing services.

My suggested amendment--suggested to me in fact by the BMA--takes the process a little further. I believe that the pilot should not be given approval if it prejudices existing arrangements, be they in respect of an existing community pharmacy or a GP dispensing arrangement. I beg to move.

Lord Hunt of Kings Heath: These clauses are very important. They will allow us to use community pharmacists in a more effective way than we have done in the past. I have always believed that they have been an under-used profession. In order to help us to do that, we need to look closely at improving the current contractual framework for community pharmacy.

At present we have a national framework which provides insufficient incentives for good quality and service performance. We are committed to reforming that national framework, but we also want a more flexible alternative. We want to build on what I think

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has been a really successful programme in the personal dental service and the personal medical service. The intention of local pharmaceutical service pilots is to allow local authorities to agree innovative local contracts for pharmacy services tailored to specific local needs.

Participation in those schemes will be voluntary and discretionary. We hope that there will be very exciting proposals from pharmacies not only supplying medicines but managing them, working with local GPs to make sure patients receive the right medicines and the help they need to make the best use out of the medicines which is a big problem at the moment. There are many examples of local schemes involving pharmacists in providing enhanced services. Local pharmaceutical services will help us to develop those services.

I do not agree with the noble Earl, Lord Howe, in terms of the amendment and the effect it would have to allow dispensing doctors' services to fall within the scope of local pharmaceutical service pilot schemes. The development of LPS does not in any way signal a change in our approach to dispensing by doctors. As a general rule, it is best for patients to have access to the skill and expertise of both GPs and pharmacists. It has long been recognised that in some rural areas community pharmacists are unlikely to be viable. Dispensing doctors' services provide an important service in such areas, and we know that that is highly valued by patients.

I can assure the noble Earl that the introduction of LPS and the decision to keep dispensing doctors' services separate are not an indication that the Government take a negative view towards dispensing doctors. The point is that dispensing doctors who wish to take part in an innovative local contract can already do so through personal medical services. There are already a number of dispensing practices involved in the PMS pilot. PMS is clearly based on family doctor services and LPS is largely about community pharmacy services. We think that it would create a muddle to allow dispensing doctors services to be provided through PMS and LPS.

In terms of the general relationship between community pharmacists and rural dispensing doctors, agreement has been reached between the PSNC and the General Practitioners Committee about the regulations governing rural dispensing; this was announced only last week. I believe that it will go a very long way to getting rid of some of the disturbing disputes between doctors and pharmacists about dispensing rights in rural areas. I believe that in that spirit it would be wrong to include dispensing doctors within LPS schemes but right to acknowledge that they can take part in PMS schemes.

I turn to Amendment No. 227A. Under the existing national contract health authorities are obliged to consider applications from people wishing to provide pharmaceutical services in their area. In practice, providing those applications satisfy certain tests health authorities have no choice but to grant them. Essentially, this current system is reactive. Local

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pharmaceutical services is a two-way process. We want something much more pro-active. On the one hand, existing contractors and other prospective pilot scheme participants will come forward with ideas they want to discuss with health authorities. At the same time health authorities will be looking for opportunities of their own, stimulating places and situations where an LPS pilot scheme may be the best way to expand and improve local services.

I believe that it will be wasteful if health authorities work out possible LPS pilot schemes and at the same time have to deal with applications to open pharmacies in the same place under national arrangements. It would put unreasonable pressure on the health authority and its prospective partners. My real concern is that it could open the way for blocking applications from people who have no interest in better services. For that reason we want health authorities to be able to designate places as being ones in which LPS is temporarily to have priority. Once they have made the designation they will be able to defer applications under national arrangements. It will give health authorities and their prospective partners in the LPS pilot schemes time to develop proposals and establish schemes which offer the greater benefit to prospective participants and patients.

The effect of the amendment by the noble Earl will be to prevent health authorities deferring applications and rendering much of the clause purposeless. I believe that it would present a significant stumbling block to the development of the LPS. A pharmacist or a company keen to open a new pharmacy in an area which currently lacks a proper service would think twice about proposing an LPS pilot scheme if they knew that their discussions with the health authority would always be under threat from an application from someone else under the national arrangements. I hope that I have answered that point for the noble Earl.

Earl Howe : The Minister's reply to Amendment No. 227AA gives me pause for thought. I will consider what the Minister has said.

I am far from happy with his reply to my other two amendments. The main point I sought to make was that under the situation envisaged there could be unfair competition. I do not see that there is any reason to create a differential between those two types of practitioner--GPs on GMS and GPs who have signed up for PMS. It seems perverse that the opportunity is going to be made available to one group of GPs and not the vast majority. It will be possible in an LPS scheme to provide additional services such as diagnostic testing and investigative procedures. A GP may wish to apply to provide these services, and it is important that the patient's care is properly co-ordinated and integrated.

The Minister said that the opportunity to take part in pilot schemes already exists within personal medical services and it would create a muddle to include them in local pharmaceutical services as well. I do not think that is true. I believe that GPs who wish to remain in

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general medical service schemes should have the same opportunity. I should like to take the opinion of the Committee.

5.28 p.m.

On Question, Whether the said amendment (No. 226) shall be agreed to?

Their Lordships divided: Contents, 68; Not-Contents, 99.

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