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NHS offers million-pound contracts to pharmacies

By Susan Cooke | 22 December 2011

Lucrative contracts with NHS hospitals are providing unprecedented opportunities for pharmacy and retail chains.

Hospital trusts are contracting out pharmacy services to private chemists so that the NHS can make large savings on VAT thanks to an anomaly in tax rules.

Lloydspharmacy already has outpatient pharmacies in seven acute hospital trusts, 13 mental-health trusts and 30 community hospitals. It will add another next April, when it starts a contract with the Rotherham NHS Foundation Trust.

A contract document shows that the trust will pay Lloydspharmacy £2 million over seven years to provide the service.

“We are confident that our experience of running busy pharmacies will help reduce queuing times for customers” – Sainsbury’s spokesman

A spokeswoman for the trust said: “It is anticipated that outpatients will benefit from reduced waiting times, that inpatients will also benefit from our pharmacy team being able to focus on their needs, and the trust will benefit financially due to reduction in VAT implications for the trust in this kind of joint venture.”

James Murray, head of Lloydspharmacy health-care services, told Exaro: “Before this partnership, a significant number of items were being dispensed through the hospital pharmacy. Now that the Lloydspharmacy outpatient dispensing service is able to concentrate on outpatients, the inpatients will benefit from the extra time the hospital pharmacy staff has to attend to their pharmaceutical needs during their hospital stay.”

In October, Sainsbury’s was chosen to provide an outpatient pharmacy at the James Cook University Hospital in Middlesbrough, together with the company, Healthcare at Home.

It will be the first Sainsbury’s pharmacy outside its supermarkets. A spokesman for Sainsbury’s pharmacy said: “We are confident that our experience of running busy pharmacies will help reduce queuing times for customers.”

The Co-operative Pharmacy has also been awarded its first such contract by the Doncaster and Bassetlaw Hospitals NHS Foundation Trust. A spokesman for the Co-op said that patients will not see any immediate change to the pharmacy service, but it aims to reduce waiting times in the long run. He added: “They will have the reassurance of being served by a reputable pharmacy.”

Since September, seven NHS trusts have tendered contracts for commercial partners to run outpatient pharmacies: Croydon Health Services NHS Trust, Bradford Teaching Hospitals NHS Foundation Trust, East Kent Hospitals University NHS Foundation Trust, Royal Free Hampstead NHS Trust, Surrey and Sussex Healthcare NHS Trust, Sheffield Teaching Hospitals NHS Foundation Trust and United Lincolnshire Hospitals NHS Trust.

Health officials refer to the Heart of England NHS Foundation Trust as a “trailblazer” for its 2007 partnership with Alliance Boots, the parent company of Boots, to provide dispensing services at Birmingham Heartlands Hospital.

A spokeswoman for the trust said: “The driver for creating a partnership with an external provider for outpatients was around improving patient quality and patient choice.”

“The advantages for the patients are that the dispensing model for outpatients is similar to high-street community pharmacies… and therefore more streamlined.”

“This provides the benefit of quicker dispensing times so patients have less time to wait.  There is the added advantage for some of our patient groups that they are able to take advantage of home deliveries and collection from their nominated local pharmacy.  Waiting times are much reduced and they are generally happier with the service.”

She added: “The Trust is able to take advantage of the VAT benefits to deliver these improvements for patients.”

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