‘Hub-and-spoke’ dispensing could save £27m over 10 years, claims government

The government has estimated that there could be a 40–50% time saving if pharmacies used a hub-and-spoke dispensing model, resulting in a net saving of £27.3m.
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Revived proposals to allow community pharmacies that are separate legal entities to use a ‘hub-and-spoke’ dispensing model could save the NHS in England £27.3m over 10 years, according to consultation documents from the government.

The documents, published by the Department of Health and Social Care (DHSC) on 16 March 2022, set out plans to amend the Medicines Act 1968 and the Human Medicines Regulations 2012, allowing independent community pharmacies “to develop or use external hub services” for dispensing.

The DHSC previously consulted on similar proposals in 2016. However, the proposals raised several questions, including whether the model was safe and how pharmacy organisations would comply with the Falsified Medicines Directive.

Following the 2016 consultation, work on the proposals was paused and no regulatory changes were made.

The latest consultation documents state that the government “has been working with sector representatives to understand and address concerns and explore additional safeguards as part of the regulatory change process”.

“We think that on balance, allowing for the wider use of hub-and-spoke dispensing and with it the use of automation, with appropriate safeguards, can have an overall positive effect on patient safety,” the document says.

“Dispensing errors in community pharmacy are already very rare. Where automation is used in the delivery of hub and spoke, it is expected that there will be a decrease in error rates.”

According to the impact assessment published alongside the consultation document, the government estimates 4,122 ‘spoke’ pharmacies would benefit from the legislative changes, on the basis that these pharmacies are part of businesses dispensing more than 60,000 items per year but less than 12 million items per year.

Pharmacy businesses dispensing more than 12 million items per year “could already be using automation and so would be unaffected by the policy proposal”, the document says.

The assessment estimates “a 40% to 50% time saving compared to in-store dispensing”, which could contribute to a potential cost saving of £191.7m over 10 years, offset by a £164.4m cost of setting up ‘hub’ pharmacies, leaving a net saving of £27.3m.

The document highlights that this assessment “has appraised for England only”, although the legislative changes would apply throughout the UK.

“If we assume that the impacts would be similar and scale for the population (England population is 84% of UK population), then the NPV [net present value] could increase to £32.5m,” it says.

Nick Kaye, vice-chair of the National Pharmacy Association, called for the Competition and Markets Authority to look at the proposals before they became law.

“The consultation acknowledges the potential competition issues that go to the heart of whether hub-and-spoke can deliver a level playing field, as the government promises,” he said.

“This includes those pharmacies that cannot access it due to logistical reasons, for example pharmacies in remote rural areas of the country.

“We cannot allow the big wholesalers to take an even more dominant position in relation to their independent customers.”

Gordon Hockey, legal director at the Pharmaceutical Services Negotiating Committee (PSNC), said: ​”This consultation follows a commitment from DHSC to progress legislative changes to enable hub and spoke as part of the CPCF [community pharmacy contractual framework] annual review. We will be carefully considering the proposals set out to make sure the models taken forward will allow the whole sector to benefit fairly.”

Previously, the PSNC said that although the hub-and-spoke model may help increase pharmacies’ capacity, there is no evidence of a financial benefit.

The PSNC agreed to engage with the government over its proposals to change legislation that would enable a hub-and-spoke model of dispensing to be used across different entities, as part of the ‘Community pharmacy contractual framework for 2019/2020 to 2023/2024’.

  • This article was updated on 16 March 2022 to include a comment from Gordon Hockey, legal director at the Pharmaceutical Services Negotiating Committee
Last updated
The Pharmaceutical Journal, PJ, March 2022, Vol 308, No 7959;308(7959)::DOI:10.1211/PJ.2022.1.135013

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