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The National Pharmacy Association (NPA) and the Independent Pharmacies Association (IPA) have begun discussions to explore whether pharmacies in England can stop dispensing medicines they are making a financial loss on without breaking the law.

NPA chairman Olivier Picard told Independent Community Pharmacist the two organisations are seeking legal advice to assess whether pharmacies would be breaching their terms of service and risk losing their NHS contracts if they refused to dispense medicines they are paying more for than they are reimbursed.

Under the National Health Service (Pharmaceutical Services) Regulations 2005, pharmacists can refuse to supply a prescription medicine in certain situations.

That includes where a pharmacist “reasonably believes it is not a genuine order for the person named on the prescription form”, if there is an error on the prescription, if a patient is threatening pharmacy staff with violence or if “the prescriber was not entitled to prescribe”.

Losing tens of thousands of pounds doing 7,000 items

Picard said he was “losing tens of thousands” of pounds “doing 7,000 items” across his four pharmacies in Berkshire and Buckinghamshire.

Last month, he warned the cost of some commonly prescribed medicines had risen 14 to 15 times since the start of the year, putting huge pressure on pharmacies and jeopardising supply to patients.

In January, NPA board member Ashley Cohen, who runs pharmacies in Leeds and York, said pharmacies should stop dispensing loss-making medicines until Labour fixes a “broken” reimbursement system which has left pharmacists continuing to “subsidise the NHS drugs bill”.

He warned such a move would jeopardise patient care, describing it as “a nuclear button”, but insisted pharmacists may have no option provided the law allowed it. Picard said that was “exactly the legal point” the NPA and IPA “are trying to establish”.

“Is that breaking the law if Ashley Cohen and other pharmacists decide to go down that route at risk of losing their NHS licence because they refuse to dispense a prescription? This is exactly what we’re talking about,” he said.

“My understanding from reading the Medicines Act 2006 is that it is not acceptable, or it’s legally impossible for pharmacies to refuse to dispense otherwise they may lose their licence.”

On Monday, the IPA wrote to the health minister Stephen Kinnock to ask for “urgent clarity over the legal basis on which community pharmacies are expected to dispense medicines at a financial loss”.

Picard said the NPA and IPA were seeking legal advice on whether the Government “can enforce” loss-making dispensing on pharmacies. “It could well be that the legal advice says ‘you have no legs to stand on’ or ‘you do’. The NPA is talking to IPA about this,” he said.

NPA chair: Legal action is not necessarily the way forward

However, Picard said even if the advice is that pharmacies have a strong legal case, legal action against the Government would not necessarily be the way forward.

“Nothing is off the table. But at the same time, could we influence policies or rules without the threat of legal action? Possibly, we can,” he said.

“The NPA and the IPA are talking, not about suing the Government (or) taking a judicial review. We’re talking about understanding whether there’s actually any legal point around the Government saying that it’s acceptable for pharmacies to dispense regardless of the cost of medicine, if it leads to pharmacy closures, if it has consequences on the ability of someone to run a business.

“Where does the Government’s responsibility lie? Do they have a duty to the whole network or individual contractors? I have no idea.

“On that point, we’re talking to the Independent Pharmacies Association at the NPA to try and understand what happens next. But that’s a very different approach in terms of it’s not about suing the Government.”

Last month, the IPA said it planned to seek legal advice over “ludicrous” regulations that forced pharmacies to dispense at a loss. Community Pharmacy England said it would not get involved, suggesting it was “inappropriate” for it to support the IPA’s legal probe after its representatives brought the subject up during the negotiator’s April 22-23 committee meeting.