Consumers benefit from pharmacy liberalisation

31/10 22 March 2010

Partial liberalisation of the pharmacies market has brought significant benefits for consumers, including shorter waiting times, a greater choice of pharmacies and extended opening hours - according to an evaluation of the outcome of the OFT's 2003 market study into the sector.

The study recommended that control of entry regulations for community pharmacies should be removed completely. In response, the Government resolved to 'move cautiously in the direction recommended by the OFT' with partial liberalisation in England.

Today's report evaluates the impact of these changes and finds that liberalisation has shortened travel times and waiting times and has improved access to lower-priced over-the-counter medicines. Against these benefits for consumers there have been some additional administrative and business costs, but overall quantified net benefits are estimated at £12m - £20m a year. The report also highlights a number of non-quantified benefits including extended opening hours and greater choice for consumers.

The research shows that the number of pharmacies operating in England has risen by nearly nine percent. Fears that enabling easier entry would lead to large numbers closing have so far proven unfounded.

Amelia Fletcher, OFT Chief Economist, said:

'While the Government stopped short of implementing the full recommendations of the OFT's 2003 report, we are pleased that the 2005 reforms have led to new pharmacies opening and greater competition in the market, stimulating improvement to services and delivering significant benefits. None of the feared ill-effects to consumers have so far materialised.'

NOTES

The OFT commissioned DotEcon to evaluate the impact of the OFT's 2003 study into control of entry regulations in the retail pharmacy market.
Download the report 'Evaluation of the impact of the 2003 OFT study on the Control of Entry regulations in the retail pharmacies market' (pdf 3.6Mb) and annexes (pdf 7.1Mb).
Download the OFT market study on 'The control of entry regulations and retail pharmacy services in the UK' (pdf 414kb). In its annual plan, the OFT has committed to publish an independent evaluation of at least one market study per year.

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