Independent Pharmacies (Hansard, 23 April 1996)

§ The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie)
My Lords, the review of resale price maintenance on medicaments being undertaken by the Office of Fair Trading is a matter for the director general. Representations concerning the viability of independent pharmacies and other aspects of the review should be made direct to him.

§ Baroness Gardner of Parkes
My Lords, I thank my noble and learned friend for that reply. Does he agree that the community pharmacist plays an important part in both the social fabric of this country and in the National Health Service? People are now recommended to seek advice from their community pharmacist and 94 per cent. of the population trusts the advice received. Does the Minister think it important to retain the availability of that service for people who are unable to get to supermarkets whose aim is to transfer most of the business to themselves?

§ Lord Fraser of Carmyllie
My Lords, I am sure that my noble friend appreciates that the director general has a duty to monitor and review the supply of goods exempted from the general prohibition on resale price maintenance. Clearly, the existence of the present exemption would reveal that there is good reason for there being such an exemption. I entirely agree with my noble friend that community pharmacies have an important part to play. As she rightly emphasised, the aim of improving health promotion is something which the Department of Health encourages.
Beyond the essential small pharmacies scheme, of which I am sure my noble friend is aware, which would protect pharmacies which may not have sufficient prescription business to be viable, the Government are bound to await the outcome of the review by the director general.

§ Lord Peston
My Lords, until recently I was a member of the Council of the Royal Pharmaceutical Society, so I have an interest to declare. I am also chairman of the Office of Health Economics so I have a pharmacy interest. In addition, is the noble and learned Lord aware that as an economist I am, and have always been, implacably opposed to resale price maintenance? I deplore the extent to which it continues, albeit apparently illegally, despite the efforts of the OFT.
Having said that as background, I ask the noble and learned Lord whether in this case one should reflect upon whether items of medicine, even general sales list medicines, should be treated as ordinary items of commerce. That is the central issue here. It relates to the continued existence of the independent pharmacist but there is the general question of whether one would like to see in shops price headlines such as "Get your insulin cheap today". One sees that in the United States. Is it an appropriate environment in which medicines should be traded? Have the Government reflected upon it?

§ Lord Fraser of Carmyllie
My Lords, if the Government have reflected on it, then at present I do not believe they are prepared to reveal that. They are bound to allow the director general to carry out his examination to see whether the present exemption should be continued.
Yes, of course there are powerful arguments over the matter. That is why there has been an exemption in the past. I invite the noble Lord, given the strength of his views, to make them known to the director general.

§ Lord Peston
My Lords, has the noble and learned Lord noticed that my method of making my views known to the director general is to express them at this moment?

§ Lord Fraser of Carmyllie
My Lords, I hope the noble Lord appreciates that I had registered the fact.

§ Baroness Gardner of Parkes
My Lords, will my noble and learned friend confirm that I am correct in thinking that the Office of Fair Trading is reviewing whether there have been sufficient changes in the market for non-prescription medicines to justify asking the court for leave to apply for a full hearing? Is he aware of the statement made by the supermarket chief executive in the Sunday press condemning the fact that the Office of Fair Trading was taking some time over the matter? He said that it was not a complex matter. However, it is a complex matter and it is important that it should be considered thoroughly.

§ Lord Fraser of Carmyllie
My Lords, it is a complex matter and the OFT anticipates that it will take until September to complete its review. I should have thought that in the circumstances that was entirely reasonable. My noble friend is right in saying that the director general is considering whether there is prima facie evidence of material change in the relevant circumstances since the exemption granted by the Restrictive Practices Court in 1970. It is not that I am unwilling to give an answer but, given that there is a statutory procedure to be followed, I am sure that it 1020 would be wholly inappropriate for me to anticipate the outcome not only of the first stage but of a possible second stage before the court.