Draft Human Medicines (Amendments Relating to Hub and Spoke Dispensing etc.) Regulations 2025

The Committee consisted of the following Members:

Chair: Graham Stuart

† Al-Hassan, Sadik (North Somerset) (Lab)

† Barros-Curtis, Mr Alex (Cardiff West) (Lab)

† Bennett, Alison (Mid Sussex) (LD)

Campbell, Juliet (Broxtowe) (Lab)

† Chambers, Dr Danny (Winchester) (LD)

† Charalambous, Bambos (Southgate and Wood Green) (Lab)

† Costigan, Deirdre (Ealing Southall) (Lab)

† Darlington, Emily (Milton Keynes Central) (Lab)

† Evans, Dr Luke (Hinckley and Bosworth) (Con)

† Jogee, Adam (Newcastle-under-Lyme) (Lab)

† Kinnock, Stephen (Minister for Care)

† Murray, Chris (Edinburgh East and Musselburgh) (Lab)

† Owatemi, Taiwo (Lord Commissioner of His Majesty's Treasury)

† Shastri-Hurst, Dr Neil (Solihull West and Shirley) (Con)

† Stafford, Gregory (Farnham and Bordon) (Con)

† Swann, Robin (South Antrim) (UUP)

† Williams, David (Stoke-on-Trent North) (Lab)

Aaron Kulakiewicz, George Stokes, Committee Clerks

† attended the Committee

First Delegated Legislation Committee

[Graham Stuart in the Chair]

Draft Human Medicines (Amendments Relating to Hub and Spoke Dispensing etc.) Regulations 2025

18:00:00

I beg to move, That this Committee has considered the draft Human Medicines (Amendments Relating to Hub and Spoke Dispensing etc.) Regulations 2025. It is a pleasure to serve under your chairship, Mr Stuart. These regulations amend the Medicines Act 1968 and the Human Medicines Regulations 2012 to enable hub and spoke dispensing for pharmacies and dispensing doctors that are not within the same legal entity. Pharmacies play a vital role in our healthcare system, ensuring that patients have access to medicines and acting as an easily accessible front door to our NHS. This Government recognise the importance of community pharmacies and are committed to supporting the sector. That is why we have increased the core contract for community pharmacy funding to £3.073 billion, with the deal representing the largest uplift in funding for any part of the NHS in 2025-26—over 19% across 2024-25 and 2025-26. Community pharmacies work hard for the NHS and the patients they serve. In England alone they dispense around 1.1 billion NHS medicines every year, and that number grows year on year. Dispensing of a medicine is not just handing out a package, but covers a number of processes: the receipt of a prescription; clinical and accuracy checks to ensure the prescribed medicine regime is suitable and safe for the patient; sourcing and buying the medicines on behalf of the NHS; the preparation, assembly and supply of medicines; and advising patients to ensure they know how and when to take the medicine. It is complex and important work. As the number of prescriptions rises, we need to support our pharmacists to focus on the provision of advice and support to patients in order to optimise their use of the medicines on which the NHS spends nearly £10 billion in primary care each and every year. That is why the Government have introduced these regulations to allow all pharmacies, should they choose, to make use of hub and spoke dispensing. In hub and spoke dispensing, the routine elements of dispensing—such as sourcing products, the preparation and assembly of medicines, and labelling—take place on a large scale in a hub pharmacy, separate from the pharmacy at which the prescription was handed in, which is the spoke. There are typically many spokes to one hub. Existing hubs often make use of automated processes to realise economies of scale and increased efficiencies. Not all pharmacy businesses are able to invest in their own hub, and businesses are currently not able to engage a hub that they do not own. The Government propose changes that would level the playing field in community pharmacy by enabling all pharmacies and dispensing doctors to use hub and spoke dispensing, if they choose. Hub and spoke arrangements already exist in the UK, but the 1968 Act restricts their use to community pharmacies that are part of the same legal entity. That has limited the use of hub and spoke arrangements to the larger pharmacy chains. The proposed changes to the 1968 Act and the 2012 regulations will remove that legal restriction and allow all pharmacies, including small independents and dispensing doctors, to utilise the arrangement as and when best suits them, levelling the playing field and cutting red tape. We propose to amend the 2012 regulations and the 1968 Act using the powers in the Medicines and Medical Devices Act 2021. The amendments go beyond simply removing the barrier that currently limits hub and spoke dispensing to pharmacies within the same legal entity, and they include additional elements to ensure the policy’s safe and effective implementation by putting in place provisions to ensure accountability, governance and transparency for patients. We propose to amend the 1968 Act to remove the restriction that prevents a medicine from being sold or supplied from a different pharmacy from the one at which it was dispensed, unless those pharmacies belong to the same legal entity, and to remove section 131 of the Act, which covers the definitions of wholesale dealing, retail sale and related expressions. The definitions of those terms will now be those found in the 2012 regulations to ensure clarity across the legislation. The proposed changes to the 2012 regulations create a new model of hub and spoke dispensing. They establish a framework for the sharing of patient information between the hub and the spokes and set the following criteria for the newly permitted arrangements. Both a hub and a spoke must be pharmacies registered with the pharmacy regulator. There must be written arrangements between any hub and spoke that must include a comprehensive statement about their responsibilities to ensure that each party is clear about the process and activities for which they are responsible. The medicine label must include the name and address only of the spoke so that patients know where to address any questions about their medicines. The spoke must conspicuously display a notice on its premises and its online presence about hub and spoke dispensing arrangements, where they are in use. The changes also establish an information gateway that includes conditions for lawful sharing of relevant patient data between the different legal entities that operate hub and spoke arrangements. There is potential for this model to increase patient safety. Evidence shows that, where businesses have implemented hub and spoke systems with tracking technology, automated systems in the hub have had a dispensing error rate six times lower than manual processes. During the consultation on the proposals in 2022, respondents shared evidence suggesting that the working environment in both the hub and the spoke can be calmer and more focused, reducing some of the stresses on our valued pharmacy workforce. Providing space and time at the spoke gives staff more time to deal with complex issues and carry out patient-facing work, including explaining to patients how to get the best outcomes from their prescribed medicines. All the amendments will come into force in October 2025. They will apply across the UK, and the timescale allows time for secondary legislation to be amended, as appropriate, across the four nations. It also gives the pharmacy sector time to explore the relevance of the new hub and spoke arrangement. I hope I have explained the rationale behind amending the 2012 regulations and the 1968 Act to enable hub and spoke dispensing arrangements across different legal entities. I commend the regulations to the Committee, and I hope hon. Members will join me in supporting them.

18:07:00

It is a pleasure to serve under your chairmanship, Mr Stuart. I will not go through everything the Minister set out, but we are amending the Human Medicines Regulations 2012 and the Medicines Act 1968 to enable hub and spoke dispensing. The regulations before the Committee will improve seven key areas. They will enable cross-business outsourcing; clarify the legal definitions of wholesale dealing and retail sale; extend outsourcing to NHS GPs; establish hub and spoke frameworks, legally defining what the hub and spoke model is and enabling hubs to assemble medicines; tighten up labelling and information rules; introduce data-sharing provisions; and clarify premises-based supply. The pros of doing that, and the reason why the previous Government were introducing legislation to do so, is that it will provide efficiency gains, improve access, modernise the legislation, and improve patient safety and data protection. There are some cons and concerns, however, particularly regarding the complexity of implementation and whether pharmacies will need to invest in new systems. There are data privacy risks, as the world is seeing an increasing number of cyber-attacks, which is a concern as we are adding more areas for data sharing. In addition, the regulatory ambiguity resulting from removing definitions from the 1968 Act may cause initial confusion during the transition. Between 16 March and 8 June 2022, the previous Government consulted on legislative proposals to allow pharmacies and dispensing doctors to access hub and spoke dispensing models. Two different models were proposed: “Model 1 is where the patient presents a prescription to the spoke. The spoke then sends the relevant information on to the hub so that they can carry out their agreed dispensing actions. The hub then sends these dispensed medicines back to the spoke, which may have further responsibilities to perform such as providing advice on the medicine to the patient, before supplying them to the patient. In model 2, the same pathway is followed in that the patient presents a prescription to the spoke, which then sends the relevant information to the hub. The hub then assembles and prepares the medicine before supplying the completed order directly to the patient.” On Monday 13 May 2024, shortly before the general election was called just over a year ago, the previous Government published a response to the consultation. The majority of respondents, being medium and larger pharmacy chains, representative sector organisations and other related businesses, supported the proposals. However, a majority of individuals, smaller pharmacies and independent pharmacies did not support the policy change. At the time, the proposed next step was to make several amendments to the 2012 regulations, including the creation of two new models: spoke-hub-spoke and spoke-hub-patient. The previous Government intended to lay a final statutory instrument before Parliament and the Northern Ireland Assembly with a view to the legislation coming into force on 1 January 2025. However, because of the election, that statutory instrument was not laid. The Minister reiterated this Government’s position in response to a question from the hon. Member for Warrington South (Sarah Hall): “A wide range of community pharmacies and representative organisations fed into the public consultation on hub and spoke reform, and I am pleased to confirm that their responses were overwhelmingly positive in support of model 1 of hub and spoke, which we will be going with.”—[Official Report, 25 March 2025; Vol. 764, c. 774.] There are two problems here—the implementation and the principle—and I will take them in turn. The impact assessment, which was updated in April 2025, found uncertainty about the potential costs of establishing the hubs, the operating costs and the level of uptake of hub and spoke dispensing. Paragraph 78 stated: “It has not been possible to determine the initial set up costs for hubs, due to the variety of different hub solutions and because we do not have a concrete assessment of the number and types of hubs that might open due to this policy.” Paragraph 136 said: “The key uncertainties in this IA are around the level of take up of hub and spoke arrangements and the net level of savings to dispensing costs that could arise”. And paragraph 137 said: “Ultimately hubs are private businesses who would need to conduct their own analysis and research into the level of market interest when deciding how much to invest in building hub capacity.” In the light of that, can the Minister tell us whether there will be any further funding to implement this change? How will he record data on uptake and changes? And what incentive is there for businesses to take this up? Will it be mandated? Given the abolition of NHS England, where will the data be collated, who will collate it, and when will it be published? I have now addressed the practical part, so I will now focus the Committee’s attention on the other part. The previous Government proposed to take forward both models: model 1, which was patient-spoke-hub-spoke-patient; and model 2, which was patient-spoke-hub-patient. I have been contacted on the latter by Pharmacy2U, which is the largest online distance-selling pharmacy. Every month, Pharmacy2U dispenses more than 3 million items directly to the homes of 1.5 million customers, so it offers an alternative for patients. It asks why there was no formal consultation on the changes from the previous Government’s position, whether Ministers had considered whether this change excludes the perspectives of distance-selling pharmacies, and what the expected impact of excluding model 2 will be.

It is a pleasure to serve under your chairship, Mr Stuart. I refer hon. Members to my entry in the Register of Members’ Financial Interests as a registered pharmacist, and previously a superintendent pharmacist of a distance-selling pharmacy. Although it is great to hear the hon. Member refer to distance-selling pharmacies in this august place, I remind him that he is representing the views of only one, admittedly large, distance-selling pharmacy, and that there is perhaps a wider range of views among distance-selling pharmacies.

Of course, and I thank the hon. Gentleman for that point, with his august history as a pharmacist. My job in the Opposition is to raise these issues with Ministers for consideration. At the heart of my point is that, by choosing only one model and not offering two, we are closing down the opportunity for not only patients but businesses. If we want to invent in the NHS, that seems a bad way of doing it. It is why the last Government suggested that having a couple of models allows people to invest in, invigorate and improve our system, because otherwise, innovation will fall behind. That is at the heart of the questions I am posing to the Minister. That leads me nicely on to my follow-up question. Does this mean that the Minister will choose not to introduce model 2? Is that likely to be in line in the future, and if so, when? Those questions go to the principle of this. The last Government decided that there were two options to accommodate all different fields, be it dispensing GPs, community pharmacies, large-scale chemists and pharmacies or, indeed, distance-selling pharmacies. It is really important to take into account the whole environment we have in the health service. We will not divide the Committee, but we would like answers to those questions about the practicalities and policies behind the regulations.

18:16:00

I start by reminding the Committee again about my entry in the Register of Members’ Financial Interests, which includes a number of pharmacy-related entries as a registered pharmacist, including my employment by PillTime prior to being elected to the House. With that out of the way, may I say how genuinely thrilled I am to be here this evening? Although this may seem a very niche issue to many on the Committee, as a pharmacist for nearly 20 years, many of those spent in community pharmacy and latterly in online pharmacy, I can tell Members through first-hand experience of the difference that this legislation will make to thousands of community pharmacies struggling across the country. Although I am incredibly thankful to the Government for finally unfreezing the funding settlement after a near decade-long squeeze under the Conservative Government, there remains great financial strain upon the sector and thus a clear need for modernisation to improve efficiencies. Innovation such as hub and spoke model 1 is how we enable that modernisation and unlock the efficiencies needed to ensure community pharmacy has a future. Having worked in pharmacies for the last two decades, I know the difference that implementing hub and spoke model 1 could quickly make to my fellow pharmacists not only in enabling greater efficiencies, but in creating the much-needed additional capacity to enable the delivery of Pharmacy First services. As we look at implementing the three big shifts, pharmacy has a clear role in delivering the preventive agenda, but it can only step up and fulfil that role if we give it the funding and capacity to do so. In late March, Minister Kinnock ensured that community pharmacy received the largest uplift in funding across the whole of the NHS. Today, the Committee can deliver hub and spoke dispensing and thus create additional capacity. Having worked with innumerable stakeholders in the pharmacy sector to get this legislation moving again after its derailment last September, I can say with confidence that there is widespread support within the community pharmacy sector for hub and spoke model 1. It will finally provide the beloved village pharmacy a level playing field with the larger chains, which have been able to utilise these technologies for decades. The benefits of the model extend far beyond the efficiency savings, with robust evidence of greater levels of patient safety by providing access to automation in the dispensing process. I thank the Minister for acting with haste greater than many in the sector expected when the implementation of hub and spoke was indefinitely delayed last September. Although I apologise for the interminable stream of letters, conversations in corridors and questions I have since sent his way, I am afraid I still have one more point that I would appreciate clarification on. As I understand it, the VAT status of hub and spoke services is still to be explained. Could the Minister elaborate on what exactly the VAT status will be for any fees or charges between hub and spoke? From my understanding, it is currently treated as zero-rated,and there exists some uncertainty within the sector over whether that will still apply under model 1, and if not, what elements might be subjected to VAT and at a higher rate.

It is worth noting that Members should refer to colleagues by their constituency, as opposed to their name, even when they are an august Minister.

18:19:00

It is a pleasure to serve under your chairship, Mr Stuart. The regulation of medicines is a reserved matter for England, Wales and Scotland, but a devolved matter for Northern Ireland. The amendments aim to enable the same opportunities for hub and spoke provision across the whole of the Union, and as a former Northern Ireland Health Minister, I welcome that step. When I was Minister, I published and stood over the Northern Ireland community pharmacy strategic plan 2030, which aimed to maintain and modernise systems for the safe and reliable supply of medicines and professional advice from community pharmacies. In that regard, I have a question for the Minister. The decision has been made to enable only model 1 hub and spoke arrangements at this stage and then to revisit model 2 once the model 1 arrangements have been established. I notice that the consultation responses raise significant concerns about model 2. They outline the potential to undermine the relationship between pharmacies and patients, as well as the risks in sharing accountability for the supply of medicines and risks to patient safety. Although the spoke and hub model covers the supply of medicines, there is a danger of losing the professional advice that community pharmacists can supply to patients, which takes pressure off our health service and others. Before there is any further progress on model 2, which will be a devolved issue in Northern Ireland, will there be further engagement with the Minister of Health in Northern Ireland, the chief pharmaceutical officer and community pharmacy representative organisations?

18:21:00

I will endeavour to answer all the questions that have been asked, but there may well be some that I am not able to. I will be more than happy to write to hon. Members accordingly. Let me say a word on the rationale for choosing model 1. The main driver was the view that the most important aspect is the interface between the pharmacist and the patient. We felt that the spoke-to-hub-to-spoke-to-patient model best ensured the connection, at high street level, between the pharmacist and the patient, whereas the spoke-to-hub-to-hub-to-patient model would somewhat cut the high street pharmacist out of the loop. That was a balanced judgment—it was not a slam dunk. That leads on to one of the questions asked by the hon. Member for Hinckley and Bosworth, which was about whether the Government are still open to looking at model 2. We certainly keep things under review, and we want to see how model 1 goes. If there is a feeling that it needs to be reviewed, we would be happy to do so. However, as things stand, we do not have any plans to do anything other than go with model 1, for the reason that I set out. The hon. Member also asked about further funding. We have set out a pretty substantial uplift— £3.073 billion—for the pharmacy sector. We are hopeful that that will go some way to easing the tremendous pressures that the sector is facing. We also feel that the hub and spoke model will drive productivity, which we hope will enable pharmacies to do more with less. That will be a good way to address some of the funding challenges. On recording data and where the data will be held, I will write to the hon. Member. I do not have that technical information to hand. On the incentives, we are clear that this is a flexible business arrangement. All we have said is that we need to see set out in writing how the relationship between the hub and the spoke will work. That is in the draft regulations. Letting that business relationship work with the greatest possible flexibility—rather than trying to micromanage it too much with incentives set from the centre—is the best way for it to work. As I say, however, every time we will want the assurance of a clear written relationship between the two. I thank my hon. Friend the Member for North Somerset for his kind words. I have absolutely welcomed his relentless lobbying during various Divisions over the past few months—I promise him that is the truth and nothing but the truth. On VAT status, however, I will dodge the question, because of course decisions on VAT are the responsibility of His Majesty’s Treasury. I strongly encourage him to ask his question of my ministerial colleagues in the Treasury. Finally, I thank the hon. Member for South Antrim for his engagement. We have had excellent engagement with his colleagues in the Northern Irish Government. He has my absolute, 100% assurance that we will continue that engagement and, given the time available, which I set out in my speech, we will ensure that all nations are able to take this legislation on board and make the necessary changes in a way that works for devolution and for the entire system across the UK. Question put and agreed to.

18:26:00

Committee rose.