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Sigma conference: Large multiples cannot have ‘disproportionate’ influence on CPE negotiations

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Sigma conference: Large multiples cannot have ‘disproportionate’ influence on CPE negotiations

AIMp chief Leyla Hannbeck addressing the Sigma conference

The first day of the 2024 Sigma Pharmaceuticals conference heard a range of voices arguing that the Company Chemists’ Association multiples cannot retain their current level of influence on the Community Pharmacy England board as they lose market share.

In her address yesterday (February 26), Association of Independent Multiple Pharmacies chief executive Leyla Hannbeck said that with LloydsPharmacy’s market exit and other CCA multiples closing and selling branches, they must have proportionally fewer seats on the CPE committee so that the negotiator’s decision-making team better reflects the true composition of the sector. Ms Hannbeck also urged CPE to “hold firm” and be prepared to refuse the imposition of a contract that does not treat the sector fairly.

Under CPE’s current governance structure, CCA multiples are allocated a guaranteed nine out of 24 seats, with non-CCA multiples allocated three and small independent businesses taking up the remaining 12. A vote on the committee structure is expected to take place in 2025.

The recent nomination of online dispenser Pharmacy2U’s superintendent pharmacist as a CCA representative sparked controversy in the sector.

The conference also heard from ex-National Pharmacy Association chair Ian Strachan, who grilled current NPA chief executive Paul Rees on whether the organisation plans to hold CPE to account on this issue

“The theme of this morning has been about the growth of independents, whether it’s market share volume or services,” said Mr Strachan, adding: “You can see that quite clearly there’s a healthy dominance of independent pharmacy, and that does take us to proportionality, because the CPE constitution has a 50:50 split.

“With the changes taking place in the sector in the last two years, that now doesn’t represent 50:50, so is CPE going to represent the true composition of the sector?”

Mr Strachan, who said the NPA has been forging ever closer links with the CCA in recent years, asked Mr Rees: “When it comes down to that decision will you be backing stronger representation for independents on CPE?”

National Association of Primary Care president Ash Soni echoed this, saying that the negotiator must “recognise the needs of the sector, not just the needs of the big players”.

In response, Mr Rees said that CPE’s composition is “an issue that needs to be looked at,” going on to say that the committee “needs to reflect the sector,” which he described as “fluctuating all the time”.

“Yes, CPE should be looking at the balance of the board, it also needs to get on with negotiating a new contract,” said Mr Rees, who in his address to the conference argued that the current contractual arrangements must be totally revised as “the contract doesn’t work”.

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