Regulating NHS dispensing contracts

The Office of Fair Trading (OFT) is investigating whether the regulations surrounding the award of NHS dispensing contracts to community pharmacies has detrimental effects for competition and for consumers. The investigation, launched in October 2001, is one of the first to be carried out by the OFT's Market Investigation team. Frontier Economics has been retained by the OFT to provide supporting empirical analysis for the study. This covers a variety of areas, including the current state of consumer access to pharmacies, the relationship between pharmacy prices and local pharmacy concentration, and whether there is evidence for entry of pharmacies resulting in the exit of existing pharmacies. The OFT expects to present its findings and recommendations in Autumn 2002.