Inter-company hub and spoke dispensing models are unlikely to improve safety or benefit patients and could result in serious unintended consequences such as increased medicines costs, according to an NPA review.

Although hub and spoke may provide capacity to deliver more services, there are a number of implementation problems, including the EU Falsified Medicines Directive (FMD), and other professional and legal challenges, according to the NPA. Its review, published last month, also finds no evidence that the model would actually reduce pharmacy operating costs.

Recommendations

The review makes a number of recommendations to the Government, including:

• Commit to a new national service such as Pharmacy First, which would utilise additional capacity and give businesses an incentive to invest
• Policy commitments such as original pack dispensing and greater use of electronic repeat dispensing would help with uptake and implementation
• Prevent restrictive practices such as direct-to-pharmacy distribution and quotas, which could be a barrier to entry for potential hub providers
• Develop a set of national standards and key performance indicators for hubs, to allow spokes to make informed choices.

An expert task-and-finish group, consisting mainly of practising community pharmacists, examined the evidence around hub and spoke and considered the implications for practice. The group reviewed:

• An NPA member survey that received 416 responses
• An independent literature review by the University of Manchester
• An expert witness programme, involving more than 20 key opinion leaders.

Single independents would be the main beneficiaries of the current Government consultation on hub and spoke, because groups can legally operate the model within their own organisations and 17.2 per cent of those with 11+ branches do already, according to the NPA survey. Yet single independents were least in favour of the model, with 63.7 per cent expressing a negative view, compared to 49 and 17.2 per cent respectively of pharmacists in groups of two to 10 and 11+ branches.

Big doubts over hub and spoke

More suitable

Respondents generally thought that labour-intensive MDS and nursing home dispensing were more suitable for hub and spoke than regular repeat medication, but only 17.2 per cent of all respondents thought it would improve the operational efficiency of their business. Over 80 per cent thought it was not in the interests of patients, independent pharmacy, or the community pharmacy network. And 68.4 per cent of all NPA members did not think that it would improve safety.

Expert witnesses and the literature review suggested that 25-50 per cent of dispensing volume could be shifted to hubs. At less than 25 per cent, this would not create sufficient capacity to make a difference to services, and at over about 33 per cent insufficient services are available to make use of the additional capacity.

The review received conflicting evidence on the opportunity to reduce stockholding at spokes and did not accept this as a benefit. While it accepted that staff levels at spokes could be reduced, and that this would be the only cost-saving they could make, it warned that:

“This is a highly risky and potentially destructive option which defeats the purpose of freeing pharmacy teams to spend more time delivering care to patients.”

An average pharmacy might save around £8-10k by cutting staff hours but this saving would be more than offset by likely fees to the hub of around 30p per item and indirect costs such as a likely reduction in purchase margin of up to 2 per cent, IT upgrade costs, staff training and redundancy costs. Total costs could top £20k for an average pharmacy, so the new model would represent an overall business cost.

Price rises

Medicine prices would probably rise due to reduced competition within the supply chain, which would also become more vulnerable if it relied on a small number of hubs. Buying groups would probably have to align with a single national wholesaler, disadvantaging independent pharmacies.

Hub and spoke may lead to more accurate drug picking, but the same improvement is achievable through barcode scanning linked to PMR systems, and could be possible in the near future through implementation of the FMD.

Data entry at the spoke is the critical process for safe operation, concluded the review. It also recommended that spokes would need to perform a final accuracy or reconciliation check to confirm products supplied by the hub.

Legal issues

A number of legal issues were identified, including patient consent, criminal and civil liability, and NHS payment. These mainly relate to a blurring of accountability between hub and spoke and the fact that hubs would not have an NHS contract. In addition, because the FMD requires medicine packs to be scanned at the time of supply to the patient, it is unclear how spokes could apply this to MDS assembled at a hub.

The current Department of Health consultation on changes to the Medicines Act that would allow hub and spoke dispensing across separate legal entities makes a number of assumptions that contradict the findings of the NPA review, such as:

• Between 25-50 per cent of independents will be using hub and spoke within three years of the necessary legislative changes
• If 60 per cent of medicines were dispensed via hub and spoke, the spokes would benefit from a 10 per cent reduction in labour costs for pharmacists and 25 per cent for technicians
• Spokes will benefit from reduced stockholding.

There is no evidence that the model would actually reduce pharmacy operating costs