Essential Small Pharmacies

Essential Small Pharmacies

NOTE: LPS arrangements do not apply in Wales – the contents of this page apply to England only.

Essential Small Pharmacies are contracted under the Local Pharmaceutical Services provisions.

PSNC and the Department of Health agreed as part of the contract negotiations in 2004 / 5 that LPS contracting would be used to provide support to existing ESPS pharmacies.  The Essential Small Pharmacies were all transferred to an Essential Small Pharmacy LPS contract from October 2006.

Originally scheduled to end in 2011, PSNC secured two extensions to the ESP LPS arrangements, and the contracts have been amended to terminate in March 2015.

Discussions with NHS England including consideration of legal advice, confirmed that NHS England and PSNC cannot negotiate a national arrangement to replace the ESPLPS contracts when they reach their termination date on 31 March 2015.  Instead, the remaining essential small pharmacies will need to negotiate directly with their local NHS England team, for local commissioning of a service.

PSNC has identified around 100 pharmacies that remained within the ESPLPS arrangements but of these, some had been given notice of termination because their prescription volume had exceeded the threshold for support.  These pharmacies will return to the pharmaceutical list, and will receive the standard pharmacy funding as set out in the Drug Tariff.

Those pharmacies that remain low volume and more than 1km from the next nearest pharmacy have a number of options.

1.  They cease to provide pharmaceutical services.  If the pharmacy is not viable without financial support, and the local NHS England team declines to agree a support contract, the pharmacy can close down on 31 March 2015.  No notice is required because NHS England is aware of the termination of the contract, however, we recommend that contractors do ensure the local NHS England team is aware of the intention to close.

2. The pharmacy can return to the pharmaceutical list, receiving standard pharmacy funding as set out in the Drug Tariff.  Returning to the pharmaceutical list is automatic, and no application is needed.  With the loss of the ESPLPS support payments, the pharmacy will have reduced income, but may be viable due to other sources of funding.  Some pharmacies which are not viable may have little option but to continue trading for a short time whilst the business is wound down.

3. The pharmacy can agree a new LPS contract with the local NHS England team.  PSNC provided support materials and held seminars for ESPLPS pharmacies in Autumn 2014.  PSNC also provided briefings for Local Pharmaceutical Committees, so that they could provide support to any ESPLPS pharmacies who require this.

NHS England is aware of LPS proposals being submitted and has sought further legal advice, and has prepared guidance for its local NHS England teams. 

PSNC recommends that all ESPLPS pharmacies that are seeking to agree LPS contracts with their local NHS England team, download the NHS England guidance and consider especially Appendix C as this identifies a non-exhaustive list of matters that may be taken into consideration when the local NHS England team determines whether to grant an LPS contract.

NHS England has produced a template LPS contract and guidance notes, which are now being used by local NHS England teams.

PSNC has continued to provide guidance to ESPLPS contractors throughout these negotiations, and if any ESPLPS contractor requires further assistance, they should contact their LPC in the first instance.


FAQs

Q. I am a former ESPLPS pharmacy and currently in negotiations with the local NHS England team to agree the terms of a new LPS contract. Must I accept “health service body” status?

The ‘Health Body Status’ in the template LPS contracts is a discretionary feature for pharmacy owners.  A Health Service Body is required by regulations to raise disputes through the NHS dispute resolution procedures rather than through the courts.  A pharmacy contractor invited to agree an LPS contract will be asked whether they wish to be treated as a health service body or not.  This is a decision that only the pharmacy contractor can take, because it is optional and the regulations allow the pharmacy contractor to decide not to be treated as a health service body.  The only consequence of this status is what happens if a dispute arises between the parties to the LPS contract – if the pharmacy wishes to reserve the right to take disputes to the courts, rather than relying on NHS dispute resolution procedures, then the pharmacy should inform the local NHS England team that it does not wish to be treated as a health service body and ensure the LPS contract is written accordingly to reflect this.

Q. What is a “good” LPS contract?

It depends. What is important is that the LPS contract is “fit for purpose” and adequately reflects the agreement reached by the parties e.g. in terms of funding, service provision etc. The starting point is the standard LPS contract which provides a base point from which negotiations with NHS England can commence. PSNC recommend proposed LPS contractors to seek independent legal advice as this is outside our remit.

However, there will always be provisions which should be considered for inclusion in the LPS contract e.g. a right to return to the pharmaceutical list when the term of the LPS contract comes to an end. There needs to be certainty so prospective LPS contractors may wish to agree this provision which has the effect that requires local NHS England teams to add the relevant contractor to the appropriate list on the expiration of the LPS contract. An application by the contractor is necessary but local NHS England teams cannot refuse to include the contractor on the list if the contractor meets the conditions to exercise the right of return. Otherwise, if the right to return is not specified in the LPS contract once the term of the LPS contract ceases, the LPS contractor will enter negotiations with NHS England for a new LPS contract or close.

You may also wish to consider whether to be treated as a “health service body” – see FAQ above.



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