The Pharmaceutical Services Negotiating Committee and Susan Sharpe v Secretary of State for Health National Pharmacy Association (Interested Party)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Collins |
| Judgment Date | 18 May 2017 |
| Neutral Citation | [2017] EWHC 1147 (Admin) |
| Date | 18 May 2017 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No's: CO/6077/2016 & CO/6299/2016 |
[2017] EWHC 1147 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Collins
Case No's: CO/6077/2016 & CO/6299/2016
The Queen (on the application of)
and
The Queen (on the application of)
For the Claimant in (1): Ms Alison FosterQC, Ms Saima Hanif, Ms Catherine DobsonandMr Adam Boukraa (instructed by Penningtons Manches LLP)
For the Claimant in (2) and the Interested Party in (1): Mr David LockQC andMr David Blundell (instructed by Knights 1759)
For the Defendant in both claims: Mr James EadieQC, Ms Sarah WilkinsonandMr Tom Cleaver (instructed by the Government Legal Department)
Hearing dates: 21 st, 22 nd and 23 rd March 2017
Approved Judgment
These two claims were listed together because each challenges the legality of the process by which remuneration of pharmacies which dispense medicines and provide other services within the NHS was to be reduced as part of the financial savings required. The claimants in the first claim I shall refer to as PSNC and the interested party in the first and claimant in the second claim as NPA. PSNC were a statutory consultee and their main grounds allege that the defendant failed to act fairly in the consultation process to such an extent as rendered the exercise unlawful. The challenge has been put in a number of different ways which I shall detail in due course.
NPA supports the grounds relied on by PSNC but wished to rely on other grounds which are also supported by PSNC. NPA decided that it should lodge a separate claim to raise the additional issues it wished to rely on to establish the unlawfulness of the decision made by the defendant. That came before me as a rolled-up hearing. With no objection from Mr Eadie QC, I granted permission and so the two claims were joined and this judgment will cover both.
On 17 December 2015 the Department of Health wrote to Ms Sharpe, the Chief Executive of PSNC, informing her that consultation on the proposed savings was to commence. An increase in NHS funding in England between 2014/15 and 2020/21 of £10 billion was announced, but with it there was to be £22 billion in efficiency savings. For 2015/16 the funding commitment for pharmacies in England was £2.8 billion, but for 2016/17 that was to be reduced to no more than £2.63 billion. The proposed date for the commencement of the reductions was October 2016. That has since had to be put back to 1 December 2016. There has been some variation to the figures in that for 2016/17 the funding is to be £2.687 billion and for 2017/18 £2.592 billion. Neither claimant has sought to challenge the amount of the new proposed reduction recognising that that is financial policy driven by the need to save public funds over the whole governmental estate. But each asserts that the means by which the reductions have been imposed has for various reasons been unfair and in breach of statutory requirements.
These claims have put before me an enormous quantity of documentation contained in eight full lever arch files together with five files of authorities. I shall have to refer specifically to a number of these documents, but I have been assisted by detailed skeleton arguments and careful oral submissions. I requested the parties to identify those documents that in their view I should read or read again before writing my judgment and that I have done. I will try to keep this judgment as short as possible, not least because there is considerable urgency since the cuts have now come into effect and the result of them is likely to mean that some pharmacies may be forced to close and others to reduce the services they at present offer.
The defendant was anxious that the reductions should be put into effect without the need for any primary legislation. The existing remuneration system was complex and comprised a number of different heads of payment which resulted in overall determinations by the defendant which were published in a document known as the Drug Tariff. The statutory provisions which deal with pharmaceutical services are contained in part 7 of the National Health Service Act 2006 as amended by the Health and Social Care Act 2012. Section 126 of the Act provides, so far as material:-
"(1) The Board must, in accordance with regulations, make the arrangements mentioned in subsection (3).
(2) The Secretary of State must make regulations for the purpose of subsection (1).
(3) The arrangements are arrangements for the provision to persons who are in England of –
(a) proper and efficient drugs and medicines and listed appliances which are ordered for those persons by a medical practitioner in pursuance of his functions in the health service, the Scottish health service, the Northern Ireland health service or the armed forces of the Crown.
[(b) and (c) Apply the same as (a) to dental practitioners]…..
(e) Such other services as may be prescribed….
(8) The services provided under this section are, together with additional pharmaceutical services provided in accordance with a direction under section 127, referred to in this Act as "pharmaceutical services"."
Section 127 empowers the Secretary of State to direct the Board to arrange for the provision of additional pharmaceutical services. The Board is the National Health Service Commissioning Board established under s.1H of the 2006 Act. Its duty is concurrently with that of the Secretary of State to arrange for the provision of the services required to be provided under the Act, save that there are some services that are specifically to be provided by the Secretary of State or local authorities.
Remuneration is dealt with in ss.164 and 165 of the 2006 Act. Section 164(1) provides that remuneration to be paid to persons who provide pharmaceutical services under the Act must be determined by determining authorities. The determining authority is the Secretary of State or the Board or other person if authorised by the Secretary of State. So far as these claims are concerned, it is the Secretary of State. Section 164(6) to (10) provides, so far as material:-
"(6) Subject to this section and section 165, regulations may make provisions about determining remuneration under this section and may in particular impose requirements with which determining authorities must comply in making or in connection with determinations (including requirements as to consultation and publication).
(7) Regulations may provide that determination may be made by reference to any of –
(a) rates of remuneration of any persons or any descriptions of persons which are fixed or determined or will be fixed or determined, otherwise than by way of a determination under this section,
(b) scales, indices or other data of any description specified in the regulations.
[(8) enables the scales, indices or other data to be those current or to take effect subsequently.
(9) deals with the dates from which regulations can have effect.]
(10) A reference in this section or section 165 to a determination is to a determination of remuneration under this section."
Section 165 contains provisions under the heading 'section 164: supplementary'. I should set it out in full since its provisions are all of importance in these claims.
"(1) Before a determination is made by the Secretary of State which relates to all persons who provide pharmaceutical services, or a category of such services, he—
(a) must consult a body appearing to him to be representative of persons to whose remuneration the determination would relate, and
(b) may consult such other persons as he considers appropriate.
(2) Determinations may make different provision for different cases, including different provision for any particular case, class of case or area.
(3) Determinations may be—
(a) made in more than one stage,
(b) made by more than one determining authority,
(c) varied or revoked by subsequent determinations.
(4) A determination may be varied—
(a) to correct an error, or
(b) where it appears to the determining authority that it was made in ignorance of or under a mistake as to a relevant fact.
(5) Determinations may, in particular, provide that the whole or any part of the remuneration—
(a) is payable only if the determining authority is satisfied as to certain conditions, or
(b) must be applied for certain purposes or is otherwise subject to certain conditions.
(6) Remuneration under section 164 may be determined from time to time and may consist of payments by way of—
(a) salary,
(b) fees,
(c) allowances,
(d) reimbursement (in full or in part) of expenses incurred or expected to be incurred in connection with the provision of the services or instruction.
(7) At the time a determination is made or varied, certain matters which require determining may be reserved to be decided at a later time.
(8) The matters which may be reserved include in particular—
(a) the amount of remuneration to be paid in particular cases,
(b) whether any remuneration is to be paid in particular cases.
(9) Any determination may be made only after taking into account all the matters which are considered to be relevant by the determining authority.
(10) Such matters may include in particular—
(a) the amount or estimated amount of expenses (taking into account any discounts) incurred in the past or likely to be incurred in the future (whether or not by persons to whose remuneration the determination will relate) in connection with the provision of pharmaceutical services or of any category of pharmaceutical services,
(b) the amount or estimated...
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