§ Gregory BarkerTo ask the Secretary of State for Trade and Industry if he will make a statement on the recent Office of Fair Trading report containing proposals to abolish the control of entry regulations for pharmacies. [104240]
§ John MannTo ask the Secretary of State for Trade and Industry what assessment she has made of possible losses to the small business sector arising from the Office of Fair Trading report on pharmacies. [104443]
§ Ms Hewitt[holding answer 24 March 2003]: The Government is committed to ensuring all sectors are responsive to consumer needs, getting rid of unnecessary regulations that inhibit innovation. The Enterprise Act will strengthen the role of the competition authorities in tackling markets that do not work well for consumers and business. The OFT report 223W provided a useful analysis of the market impact of the current control of entry regulations on consumers and competition and highlights the need for the present regime governing pharmacies to be updated. We have already taken steps to open up the pharmacy market by allowing for mail order and internet pharmacies. At the same time, the Government wants to see an increased role for community pharmacists in providing services to NHS patients and we are currently developing a new contractual framework to make that happen.
The Government needs to take into account wider policy objectives in responding to the OFT report. It argues for abolition of entry controls on the grounds that there would be consequent benefits for consumers in terms of reduced prices, improved quality of services and better access. We strongly support these objectives. We want to improve access and choice (including improving out-of-hours access for NHS patients) so that more NHS patients can use the skills of community pharmacists, who are trained clinicians, for advice, information and services. The OFT report also noted that in a more competitive environment problems could arise through the possible effect of deregulation on the ability of patients in some areas to access high quality pharmacy services, and that these problems could be addressed through targeted measures. It was not in the OFT's remit to examine how mechanisms such as the Essential Small Pharmacies Scheme could be developed to address a more competitive environment, and we therefore propose to examine these issues further before reaching a final decision on a balanced package which most effectively promotes competition, new entry and increased choice alongside our wider social and health objectives.
We therefore favour change to open up the market and improve quality and access without diminishing the crucial role that pharmacies play, especially in poorer and rural areas. The Government intends to come forward with proposals before the summer recess and will publish a progress report at the end of June. All changes will then be the subject of a full consultation.
The OFT report raises particular issues for the devolved administrations and they are making their own announcements today regarding their responses to the OFT recommendations.
The OFT's work on this area has taken forward our understanding of the impact on quality, innovation and consumer choice of the existing entry controls. Their regulatory challenge function is an important one. We look forward to receiving further reports on markets where regulation may be distorting competition.
As part of our work moving forward we will consider the impact of any changes on all sectors of the pharmacy market, including small businesses.