HUNDREDS of small high-street pharmacists fear that the deregulation of their business proposed yesterday will put them out of business.

The Office of Fair Trading (OFT), which recommended that limits on the number of pharmacies allowed to handle NHS prescriptions should be scrapped, said that it would improve services for consumers.

The change, if approved by the Government, is expected to lead to more than 500 in-store pharmacies being opened in supermarkets. It may also bring the closure of many independent chemist’s shops that have relied on the restrictions to survive.

The Government now has three months to decide whether to accept the recommendations. There will be fierce opposition from Britain’s 7,000 independent pharmacists, who say that the recommendations would harm patient services in rural and poor areas and have serious consequences for government plans to modernise the NHS.

Announcing the recommendations yesterday, John Vickers, the OFT director-general, said he believed that the consumer would benefit, with prices of over-the-counter medication falling as competition increased. He said that he expected savings of £30 million a year. The NHS itself would save £10 million through not having to regulate the number of businesses in the market.

“The tremendous importance of getting medicine to people when they need it will be better served in a liberalised environment,” he said. “It would allow freer competition that would open up opportunities for businesses that would not be open to them under the current regulations.”

Mr Vickers said the changes should also increase pharmacy opening hours. At present there are about 12,000 pharmacies in Britain with a combined turnover of about £8.6 billion.

Under rules introduced in 1987, the numbers of pharmacies were restricted by area to control NHS costs and ensure that no single area was oversupplied. As a result the great majority of pharmacies are independent because supermarket chains have been unable to get licences. They account for only about 5 per cent of the total market now.

Opponents of deregulation say that there is an acute shortage of pharmacists and with plans by supermarket chains to open shops in 500 branches many other small pharmacies will close. They also argue that it could lead to pharmacies “clustering” around GP surgeries, vying for business, while pharmacies in locations further away would lose customers.

“This is like robbing Peter to pay Paul,” said John D’Arcy, chief executive of the National Pharmaceutical Association, which represents independent pharmacists. “What we fear is that if these regulations are adopted many independent pharmacists will go and work in the out-of-town supermarkets who can pay them more and we lose the chemist on the high street. It may also have a serious effect on the NHS because hospitals won’t be able to pay their pharmacists as much as Asda.”

The Royal Pharmaceutical Society, which represents all pharmacists, has written to the Government to express its concern over the proposals, which it said could greatly increase the number of community pharmacies at a time when a shortage of staff was compromising pharmaceutical care development in hospitals.

David Miles, pharmacies director of Asda, said: “The OFT’s investigation of the pharmacy market confirms what our customers tell us — the current system denies them competitive prices and access to pharmacies where they want them.”

David Lammy, the Health Minister, said that the Government intended to consult widely before making a decision in about three months. “Pharmacists have an important part to play in our plans to drive up the quality of services and to make the best use of the skills of everybody working in the NHS.”

Sick notes

Eighty per cent of pharmacy turnover comes from NHS prescriptions

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