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Cuts appeal recap: What were PSNC and the DHSC’s main arguments?


By Beth Kennedy
Editor

25 May 2018

This week saw the sector’s fight to overturn the Government’s cuts to English pharmacy funding reach the courts once again.

Following an unsuccessful High Court battle last year, the Pharmaceutical Services Negotiating Committee (PSNC) and the National Pharmacy Association (NPA) took their cases to the Court of Appeal.

Here were PSNC’s main arguments and how the Department of Health and Social are (DHSC) argued its own case:

 

1.Was there enough analysis of the potential impact of the cuts before they were imposed?

 

The judge in the original judicial review recognised that David Mowat, pharmacy minister at the time the cuts were imposed, had failed ‘…to obtain a satisfactory analysis of the economic effect …’. However, PSNC argued that he wrongly found that the DHSC’s duty to obtain sufficient information on the possible effects of the cuts had been fulfilled.

In comparison, the DHSC argued that the decision-making behind the cuts was rational and that it was not possible to reliably estimate how many pharmacies could close as a result of them. Therefore, the judicial review had been right to uphold the cuts, it said.

 

2. What’s the importance of a 15% operating margin?

 

In the original High Court case, it was revealed that the DHSC had failed to disclose to PSNC that it worked out the cuts by working on the basis that the average pharmacy has a 15% operating margin. While the High Court case did not find this non-disclosure unlawful, PSNC argued that it was.

The DHSC, however, argued that the 15% operating margin estimate only formed one part of its analysis of the sector, and therefore did not require disclosure to PSNC.

 

3. Does the DHSC want pharmacies to close?

 

The DHSC argued that cutting the sector’s funding was not a ways of seeking community pharmacy closures, but instead to create savings. It also argued that nothing in the statutory provisions prevented it from creating a funding package that would have a potentially negative impact on community pharmacy services.


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