Everything you need to know about ‘hub-and-spoke’ dispensing

A look at the government's controversial proposals that it claims will make community pharmacy in the UK more efficient.
Pharmaceutical drug warehouse

‘Hub-and-spoke’ dispensing is one of the big ideas from the Department of Health and Social Care (DHSC) to make community pharmacy more efficient.

It is part of the five-year plan laid out in the English ‘Community pharmacy contractual framework for 2019/20 to 2023/24’ (CPCF), which said that, with the support of the Pharmaceutical Services Negotiating Committee (PSNC), the government will “pursue legislative change to allow all pharmacies to benefit from more efficient hub-and-spoke dispensing”.

In 2022, the government consulted on UK-wide proposals to enable all community pharmacists to access hub-and-spoke dispensing models. According to the proposals, hub-and-spoke would level the playing field between large chains and smaller pharmacies, increase efficiency and free up pharmacists’ time for more clinically focused tasks; and help teams to deliver more services and provide greater face-to-face patient care.

However, the hub-and-spoke concept has proved controversial — there are concerns about how the patient–pharmacy relationship could be affected, and who would be held accountable if something went wrong.

What exactly is being proposed?

The proposals, which were opened for consultation between 16 March and 8 June 2022, would alter current legislation to allow hub-and-spoke pharmacies to operate from different retail businesses — an extension to the current model, where both parts of the system must be operated by the same company. 

Two models have been proposed:

  • Model one: the patient presents a prescription to the spoke pharmacy, which sends it to the hub pharmacy. The hub then prepares or assembles the medicines and sends them back to the spoke pharmacy, which supplies the medicines to the patient;
  • Model two: In this case, the patient supplies the prescription to the spoke pharmacy and the hub then supplies the medicine directly to the patient; it would not be sent back to the spoke pharmacy.

In the consultation, the government said it wants to amend the Human Medicines Regulations 2012 and the Medicines Act 1968, to allow hub-and-spoke models to be built between different pharmacy businesses, meaning that independent ‘spoke’ pharmacies would be able to enter into arrangements with independent ‘hub’ pharmacies that are part of a separate business. The hub would need to be registered as a pharmacy, so that both the hub and spoke would be subject to the same regulatory framework.

Hub-and-spoke models are already used in some neighbouring countries, including Germany, Finland, Belgium and Denmark, according to the government’s impact assessment.

The government estimates that any changes could save the NHS in England £27.3m over ten years, because it would free up time spent on dispensing in the spoke pharmacies and allow pharmacists to focus on providing more clinical services.

Why is the government suggesting this?

The DHSC previously consulted on similar proposals in 2016. However, the responses to the proposals raised several questions, including whether hubs would be registered pharmacies; how to regulate a process when it takes place across different legal entities, and how pharmacy organisations would comply with the Falsified Medicines Directive. So the proposals were parked, with the government promising to take another look and come back with an amended set of proposals.

In its latest consultation, the government said its proposals would “level the playing field between large chains and smaller pharmacies”, because it would allow smaller independents to be the spoke — something that, previously, only pharmacies belonging to a large business with multiple sites could do.

It also said that the proposals would free up spoke community pharmacies to do more clinically focused tasks and provide “additional services, such as vaccinations, blood pressure monitoring and medication advice”. It added that hub and spoke, with its greater use of automation, would have an “overall positive effect” on pharmacy’s record for patient safety.

The government also says the dispensing model fits with its vision for community pharmacy to take on an expanded role in treating minor illness and delivering more clinical services. And it adds that the “increased capacity for pharmacists to see patients at spoke pharmacies” could help reduce pressure on the wider NHS.

How might the hub-and-spoke model affect patients?

That depends on the model. Several respondents said they would only accept model one, where the medicine is supplied from the spoke pharmacy.

In its consultation response, the PSNC said model two would likely cause patient confusion and safety issues, especially for those with comorbidities or complex conditions. It said there would be a “lack of clarity” for patients, carers and other healthcare professionals, around who to talk to if there is a problem.

Only model one had manageable patient safety risks, the PSNC said.

The National Pharmacy Association (NPA) said model two could undermine the relationship between the pharmacy and the patient. Model one would mean that follow-up conversations between the patient and pharmacist would be more likely, which would help ensure good medicines compliance, it said.

Model two, direct to pharmacy supply, does not fit with our strategy, has the potential to damage our market

Community Pharmacy Wales’ response to the DHSC consultation

In its response to the DHSC consultation, Community Pharmacy Wales said: “From our perspective, the relationship with the patient is firmly grounded in the local pharmacy so that the essential link between dispensing and face-to-face pharmaceutical care is maintained.

“Model two, direct to pharmacy supply, does not fit with our strategy, has the potential to damage our market and has no place in Wales.”

However, Community Pharmacy Scotland’s (CPS) said that automation in hubs could have a positive benefit on patient safety as original packs are used and picking errors are reduced.

“Equally, if it does open up time in spokes for patient care, this may reduce errors at this end too.”

CPS added that that it supports model one, but not model two “unless contractual arrangements safeguard the current model of care”.

“The spoke in all instances should be the contact point for patients. The patient relationship with the spoke cannot be undermined,” it added.

The Royal Pharmaceutical Society (RPS) also raised safety concerns over medicines going directly from the hub to the patient in model two. Should such a model be adopted, its response said “triggers” would be needed to flag up when a patient needs to interact with a pharmacist.

“The triggers would include a change in medicine (stopped, started, dose change) or a change in the person’s condition(s), high risk medicines etc.”

The RPS added that the spoke pharmacy must also be able to ask the hub to send medicines back to the spoke, if the spoke team need to speak to the patient following a clinical check of the prescription.

Who would be responsible if something goes wrong?

The government’s impact assessment said that if the hub and spoke were from separate legal and commercial entities, then that would require clear accountability between the two entities.

However, the NPA said that model two could create uncertainty about accountability. In the case of an inter-company hub and spoke, it wants to see a framework that outlines where accountability lies.

Accountability would be critical for patient safety and to prevent anyone trying to cut corners, the Association of Independent Multiple Pharmacies (AIMp) said. Like the NPA, AIMp said that regulations must be very clear on who is professionally accountable for each part of the process.

In its consultation response, the Company Chemists’ Association (CCA) warned that the introduction of any new operating process could introduce the risk of errors — especially a complex system where data and products are transferred between legal entities.

It added that the experience of its members had shown that significant investment in quality assurance was needed and added: “It is unlikely that new entrants to the market will have the benefit of this experience, and so the risk of error from a new entrant is higher than that currently observed. This will likely improve over time but remains a factor if a commercial market develops with regular new entrants.”

What are the financial or business implications for community pharmacy owners?

The government’s impact assessment estimated that using a hub would create a net saving of 8p per item in operating costs. It calculated this based on a few assumptions.

First, it assumed that it takes between two and three minutes to dispense a prescription item in a community pharmacy. It calculated that this equates, in pharmacist time, to a cost of £1.20 per item.

Then, it said that 40% of a spoke pharmacy’s items can go through the hub, which is a 40% time saving reduction. It calculated that 40% of £1.20 is 48p, so if a community pharmacy is a spoke, it could save 48p per dispensed item.

Finally, it said that dispensing in the hub itself would cost 40p. So, the calculations suggest “a net reduction in operating costs of 8p per item”.

It also estimated that the average set-up cost for spoke pharmacies would be £4,000, which includes investment in IT systems, training and process redesign.

However, the PSNC’s response warned that there are “virtually no financial efficiencies envisaged by these proposals”, which would further undermine financial sustainability of individual pharmacies.

It added that while the DHSC suggests an annual net benefit of £3.3m per year once the transition into using hub-and-spoke is complete, this is “doubtful” when the assumptions made in the impact assessment — including around the suggested 40% dispensing time saved and resulting financial benefit — are looked at carefully. For example, it points out that a pharmacist must always be present in the pharmacy — and if there is only one pharmacist in the pharmacy at one time, as is very often the case, their working hours could not be cut without reducing the pharmacy’s opening hours.

In a press release published on 9 June 2022, Helga Mangion, policy manager at the NPA, said that there was a need for an “honest conversation about efficiencies”, noting that the government’s own official impact assessment revealed the limited extent of savings that may be possible under the changes.

In its consultation response, the Pharmacists’ Defence Association (PDA) said there appeared to be “significant concern within the independent pharmacy sector that these proposals will, when taken together with other policy measures, lead to a significant reduction in the viability of the existing independent pharmacy network and thus lead to reduced access to pharmacies and pharmacists”.

The impact assessment is based on an English model … the financial model in Scotland is somewhat different. You are not then comparing apples with apples

Community Pharmacy Scotland’s response to the DHSC consultation

Community Pharmacy Scotland pointed out that the whole impact assessment did not correspond with the situation in Scotland: “The impact assessment is based on an English model and assumptions. Obviously, the financial model in Scotland is somewhat different. You are not then comparing apples with apples in terms of volumes, contractual arrangements and financial models etc. It is therefore challenging to fully compare through this consultation.”

The Competition and Markets Authority (CMA) expressed concern about competition in the sector, particularly if the market developed to provide “an increasingly limited number” of dispensing hubs.

In its response, the CMA said that if legislation was introduced, the government should monitor how the hub market developed, work with the pharmacy sector to examine barriers to competition for new hubs to enter the market, and then consider what policy or regulation systems could be used to address these barriers.

The phrase that came up repeatedly in responses was “unintended consequences”. The ability to have hubs supplying medications directly to the patient could “create a scenario where there are many ‘non-NHS’ businesses/locations supplying NHS prescriptions”, the CCA warned.

What extra reassurances do pharmacy organisations want?

In its consultation response, the RPS asked for national guidance on the arrangements that should be in place between the hub and the spoke. It said that all hubs must be based in the UK, inspected by the General Pharmaceutical Council (GPhC) and adhere to minimum national standards. It added that there must also be arrangements for business continuity, should a hub fail, and there also needs to be clear agreements for what happens if only part of a prescription is supplied or can only be supplied at different times.

There is also a need for good electronic information flow between the hub and spoke and how near-misses and errors will be reported should also be included in the arrangements, the RPS said, adding that whatever the model chosen, the patient must have continued access to a pharmacist so they can ask any questions or raise concerns.

The issue of accountability was also raised by the AIMp, which called for clear agreements set out in standard operating procedures around accountability and supervision in its response. It also called for rules on the number of patients per pharmacist at all hubs to avoid incentivising a “race to the bottom”.

The CCA commented that there is a need for a clear division of all responsibilities within the dispensing process. For this to be consistent, it said that regulations should mandate an obligation to have an agreement that formalises this, all of which needs to be overseen by the GPhC, which should set standards of what is expected.

The PDA also questioned whether there was any desire or appetite from smaller pharmacy operators for this model, concluding that any change to the hub-and-spoke system must only be considered in the context of patient safety and not to the detriment of the clinical input that pharmacists provide to the supply of medicines.

Key quotes

Competition and Markets Authority

Removing barriers to new business models entering this market should enable a more level playing field. Smaller independent pharmacies should have improved access to automation and new dispensing models. However, as the impact assessment acknowledges, there may be potential longer-term competition risks in the supply chain if the market develops in such a way that pharmacies’ access to medicines is through an increasingly limited number of hub suppliers.”

Pharmaceutical Services Negotiating Committee

“There are virtually no financial efficiencies envisaged by these — hub-and-spoke dispensing — proposals, which, if used, are more likely to add cost to the community pharmacy sector.”

National Pharmacy Association

There needs to be a dynamic and competitive market in which hubs compete based on quality of service and price for the custom of pharmacies that want to operate this model.”

Royal Pharmaceutical Society

There are questions about the impact on sustainability of these models. If the hub sends the medicine directly to the patient, then this significantly increases the transportation costs vs sending a number of patients’ medicines back to one pharmacy.”

Association of Independent Multiple Pharmacies

“The number of patients per pharmacist at all hubs — including [distance selling pharmacies] — needs to be limited and regulated by the General Pharmaceutical Council. This is because there can be a clear commercial advantage for a hub operating to, say, 100,000 patients per pharmacist versus a hub operating to 10,000 patients per pharmacist. Any lack of regulation on this might lead to a race to the bottom on pharmacists’ costs.”

Company Chemists’ Association

“When reviewing the consultation, it appears to take an ‘English-centric’ view of the changes. The impact assessment links to the English ‘Community pharmacy contractual framework’ and the role of Pharmaceutical Services Negotiating Committee. This legislation will apply across the UK and there is a need to consider how it may impact on countries other than England.”

Community Pharmacy Scotland

“We do not consider it is adequate merely to refer to arrangements that may or may not be contractual and leave the hub and spoke to agree on something. This is too vague and unenforceable.”

Community Pharmacy Wales

“A consultation should have been held in each country, so that the views of the government, NHS and the pharmacy network in each country could be properly established. There are clear differences between the contracts and strategies for community pharmacy across the UK and Community Pharmacy Wales remains to be convinced that this has been properly considered and, in particular, that there has been appropriate recognition that healthcare is a devolved matter.”

Last updated
The Pharmaceutical Journal, PJ, August 2022, Vol 309, No 7964;309(7964)::DOI:10.1211/PJ.2022.1.152097

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