UK RPM: Risk To Pharmacies "Exaggerated"

In his announcement this month that the Uk Office of Fair Trading is to start legal action to end resale price maintenance on branded over-the-counter medicines, Director General of Fair Trading John Bridgeman dismissed claims by the Community Pharmacy Action Group that abolishing RPM could lead to the closure of as many as 25% of UK pharmacies. This was the finding of a study published this summer by Deloitte & Touche Consulting Group (Marketletter July 22).

Mr Bridgemen said that in his view, the numbers of pharmacies claimed to be at risk had been exaggerated, causing unnecessary alarm, and the reasons given by the CPAG in support of its claim were "open to challenge." Pharmacists themselves accept that ending RPM could save consumers L180 million ($284.6 million) a year, he said, adding that "competent and efficient pharmacies will be able to adapt to the removal of RPM, and may be able to increase their margins on some products by putting additional competitive pressure on manufacturers and suppliers."

CPAG chairman David Sharpe condemned the OFT's decision, but pointed out that it has no legal standing in its own right. He urged the government to halt the moves at once, calling on it to "give the issue a democratic airing as part of the debate on the forthcoming Competition Bill." The day before the OFT announcement, the CPAG had released new Gallup research findings based on the Deloitte & Touche study, in which 83% of people polled said they would not want RPM removed if it could lead to the closure of up to one in four pharmacies throughout the UK, even if they could save money.