27 February 2020 Arena Point Merrion Way REF: SHA/23308 Leeds LS2 8PA APPEAL AGAINST NORTH WEST (GREATER Tel: 0203 928 2000 MANCHESTER) AREA TEAM, NHS COMMISSIONING Fax: 0207 821 0029 BOARD ("NHS ENGLAND") DECISION TO REFUSE AN Email: [email protected] APPLICATION BY DAY LEWIS PLC FOR A RELOCATION THAT DOES NOT RESULT IN A SIGNIFICANT CHANGE TO PHARMACEUTICAL SERVICES PROVISION UNDER REGULATION 24 FROM 38B GATHURST LANE, SHEVINGTON, GREATER MANCHESTER, WN6 8HW TO THE SURGERY, HOUGHTON LANE, WIGAN, SHEVINGTON, WN6 8ET 1 Outcome 1.1 The Pharmacy Appeals Committee (“Committee”), appointed by NHS Resolution, quashes the decision of NHS England and redetermines the application. 1.2 The Committee determined that the application should be granted. NHS Resolution is the operating name of NHS Litigation Authority – we were established in 1995 as a Special Health Authority and are a not-for-profit part of the NHS. Our purpose is to provide expertise to the NHS on resolving concerns fairly, share learning for improvement and preserve resources for patient care. To find out how we use personal information, please read our privacy statement at www.nhsla.com/Pages/How-we-use-your-information-- -FHSAU.aspx REF: SHA/23308 Arena Point Merrion Way Leeds APPEAL AGAINST NORTH WEST (GREATER LS2 8PA MANCHESTER) AREA TEAM, NHS COMMISSIONING BOARD ("NHS ENGLAND") DECISION TO REFUSE AN Tel: 0203 928 2000 APPLICATION BY DAY LEWIS PLC FOR A Fax: 0207 821 0029 RELOCATION THAT DOES NOT RESULT IN A Email: [email protected] SIGNIFICANT CHANGE TO PHARMACEUTICAL SERVICES PROVISION UNDER REGULATION 24 FROM 38B GATHURST LANE, SHEVINGTON, GREATER MANCHESTER, WN6 8HW TO THE SURGERY, HOUGHTON LANE, WIGAN, SHEVINGTON, WN6 8ET 1 The Application By application dated 8 July 2019, Day Lewis plc (“the Applicant”) applied to NHS Commissioning Board (NHS England”) for a relocation that does not result in a significant change to pharmaceutical services provision under Regulation 24 from 38b Gathurst Lane, Shevington, Greater Manchester, WN6 8HW to The Surgery, Houghton Lane, Shevington, Wigan, WN6 8ET. In support of the application it was stated: 1.1 Day Lewis Plc - Application in respect of a relocation within a HWB area that does not result in significant change to pharmaceutical services provision – supporting information 1.2 Current location: 38b Gathurst Lane, Shevington, Greater Manchester, WN6 8HW 1.3 Proposed location: The Surgery, Houghton Lane Wigan, Shevington, WN6 8ET Background 1.4 Day Lewis Plc own a pharmacy which trades from premises at 38b Gathurst Lane, Shevington. 1.5 The pharmacy currently occupies a poor trading position and dispenses only c. 3,500 items per month as a result. This is less than half the national average number of items. 1.6 The proposed location is occupied by an existing pharmacy which is owned by Dispensing Healthcare Limited. This is a 100-hour pharmacy and is therefore subject to high operating costs which place a significant burden on the owners in the current challenging funding environment. 1.7 If this application is approved, it is intended that the 100-hour pharmacy will close (after providing the requisite notice) and Day Lewis will relocate their pharmacy to the premises. Preliminary Issue - Regulation 31 1.8 As NHS England will be aware, the premises to which Day Lewis Plc wishes to relocate to are currently occupied by Shevington Pharmacy which is owned by Dispensing Healthcare Ltd. The Applicant is therefore required to show why regulation 31 does not apply in this case. 1.9 Regulation 31 states as follows [quoted in full] 1 1.10 In order for regulation 31 to apply, both regulation 31 2(a) and (b) above must be operative. In this case it is accepted that there is already a pharmacy trading at the proposed site and therefore 31 2(a) applies. 1.11 In order to decide whether regulation 31(2)(b) applies the decision maker should take into account decisions of Primary Care Appeals in similar cases. In addition, the relevant wording has been considered by the High Court in R (on the Application of Pharmacy Care Plus Ltd) v Family Health Services Appeal Unit [2013] EWHC 824 (Admin). 1.12 In the above court case, one company submitted an application to open a pharmacy adjacent to an existing pharmacy run by a separate company. Judge Stephen Davies accepted at paragraph 34 that: 34. It will almost always be an extremely relevant consideration to know whether or not there is any connection in terms of ownership and control between the entities who carry on the existing business and who propose to carry on the proposed new business. So, for example, if an existing business was owned by Company A and the proposed new business was owned by Company B, and there was absolutely no connection at all in terms of ownership and control between the two of them, it would be difficult to see how they could be regarded as providing the same service, even if the services which they were going to provide were complementary to each other. In contrast, if they were both to be provided by exactly the same company, then that would also be an extremely relevant consideration going the other way. 1.13 It is therefore necessary to consider whether there is any connection at all in terms of ownership and control between Day Lewis Plc and Dispensing Healthcare Ltd. 1.14 As NHSE will be aware, Day Lewis Plc operates over 300 pharmacies across England. 1.15 Dispensing Healthcare Ltd operates a single community pharmacy in Shevington and has no connection whatsoever to Day Lewis Plc. 1.16 Day Lewis and Dispensing Healthcare Ltd have reached agreement for Dispensing Healthcare Ltd to close its pharmacy and for Day Lewis Plc to relocate to the Surgery and replace it. 1.17 There are no shared directors, shareholders, employees, or control between the two organisations and therefore quoting His Honour Judge Stephen Davies, “it would be difficult to see how they could be regarded as providing the same service, even if the services which they were going to provide were complementary to each other.” 1.18 In addition, NHSE has now received a closure notice from Dispensing Healthcare Ltd in relation to their premises at the Surgery. Shevington Pharmacy will cease trading at the close of business on the day before this relocation takes effect (subject to NHSE agreement) and be replaced by Day Lewis Plc the following day. This will ensure that only one pharmacy operates from the location at any one time. 1.19 In SHA/19964 (28 February 2019) Primary Care Appeals stated in a similar case that; 5.7 The Committee also considered the judicial guidance referred to by the Applicant and set out in full at 1.7 in Annex A above (the Pharmacy Care Plus case). 5.8 The Committee had asked a number of questions of the Applicant at the hearing in order to satisfy itself as to the links (if any) between the Applicant and Everest Pharmacy. Based on the answers to those questions and the other written and oral evidence the Committee was satisfied that it was highly unlikely that both pharmacies would operate from the same premises but that in any event there was no shared ownership or control and the two pharmacies were distinct and separate legal entities. 2 5.9 Taking into account all the evidence provided, the Committee was of the view that for the purposes of regulation 31 (2)(b) the services that the Applicant intended to provide from the premises on Withington Road should not be treated as part of the same services currently provided by the existing contractor there. 5.10 The Committee was not required to refuse the application under the provisions of Regulation 31. 1.20 It is therefore submitted that judicial guidance, Primary Care Appeal decisions and the facts of the case mean that regulation 31 does not and cannot apply. Local Area 1.21 The proposed location for this application is within Shevington Surgery, the only medical centre located within Shevington. The premises are located on Houghton Lane as can be seen on the map (Appendix A). The distance between the existing and proposed premises is approximately 375m. 1.22 The existing premises are located on Gathurst Lane, a short distance away from the shops that serve the local community. The pharmacy occupies what is essentially a converted garage adjacent to residential properties. The business is located at these premises as, other than a small Co-Op supermarket, these are the closest ‘retail premises’ to Shevington Surgery. 1.23 Prior to the opening of the 100 hour pharmacy, this location was the closest available for patients attending the surgery and subsequently requiring pharmaceutical services. 1.24 The ‘shopping area’ comprises a parade of shops located between Highfield Avenue to the north and Shevington Library, which can be seen on the map just to the north of the existing Day Lewis premises. “Amenities here cater very much to the local community and include a bakery, estate agent, off licence, ‘village store’, post office, takeaway outlets, the aforementioned Co-Op convenience store and another pharmacy (Manor Pharmacy)”. 1.25 The area around the surgery site is largely residential in nature although there is a hair salon and a golf course a short distance away on the main road. 1.26 The two sites are connected by the B5375 (New Miles Lane) which is also residential, with the majority of houses being bungalows indicating an older population. 1.27 The local terrain is flat, pavements are wide and in good condition and there is street lighting provided throughout the area.