The Pharmaceutical Services Negotiating Committee & Anor, R (On the Application Of) v The Secretary of State for Health

A public decision-maker need take only reasonable steps to inform itself. Subject to irrationality review, it decides the relevance, manner and intensity of inquiry. Where reliable forecasts of market effects cannot realistically be obtained, a decision is not unlawful merely because the authority has not obtained further information.

A duty to have regard to reducing inequalities in benefits obtained from health services requires genuine consideration of those inequalities. It does not prescribe an outcome or the weight to be given to that objective against competing statutory duties and limited resources. A broad assessment of patient access and potential disadvantage may satisfy the duty.

The Secretary of State reduced the community-pharmacy funding package, altered the remuneration structure in the Drug Tariff, introduced the Pharmacy Access Scheme and created a quality payment. The claimants, representing pharmacies, challenged the decision by judicial review.

Collins J dismissed the claims: [2017] EWHC 1147 (Admin). The Pharmaceutical Services Negotiating Committee and an individual pharmacist appealed on grounds concerning the adequacy of inquiry, the alleged reliance on a 15% profit margin, consultation fairness and improper purpose. The National Pharmacy Association also alleged breach of section 1C of the National Health Service Act 2006.

The central issues were whether the Secretary of State had sufficient information to make the decision, and whether he had lawfully considered inequalities in the benefits people obtain from NHS services.

Disposition

Both appeals were dismissed.

1. The applicable inquiry duty was subject to Wednesbury review. The Secretary of State was entitled to conclude that reliable predictions of the number and location of pharmacy closures were unattainable because of varied business models and market conditions. The material before him repeatedly recognised that uncertainty. He could therefore proceed with mitigation directed to maintaining reasonable patient access. The approach was consistent with Tameside and Khatun.

2. The decision did not rest critically on either an informal industry view or the indicative 15% operating-profit estimate derived from limited Companies House data. The documents before the Secretary of State identified the limitations of that material. Consequently, its non-disclosure did not make the consultation unfair. The consultees knew the proposed changes, participated in a detailed process and made representations, some of which were adopted.

3. Changes to the Drug Tariff made to achieve legitimate efficiency savings were not rendered unlawful because a reduction in pharmacy numbers was anticipated or thought desirable. The evidence supported the conclusion that closures were a possible consequence, rather than the improper purpose of the remuneration changes.

4. Section 1C of the National Health Service Act 2006 concerns inequalities in the benefits people actually obtain from NHS services, not only opportunities for access. However, it is a duty to have regard to the need to reduce those inequalities. It leaves the Secretary of State substantial discretion to balance competing, complex and potentially conflicting objectives.

5. The Impact Assessment and Duties Document, fairly and as a whole read, showed that the Secretary of State considered both deprivation and rural isolation, the non-dispensing services supplied by pharmacies, possible adverse effects, and the mitigations offered by the Pharmacy Access Scheme. He was entitled to give substantial weight to maintaining reasonable access, including in sparsely served areas. The duty did not require a pharmacy-by-pharmacy assessment of capacity to absorb demand following closures. No breach of section 1C was established.

• Court of Appeal (Civil Division) — dismissed both appeals: [2018] EWCA Civ 1925.
• High Court, Administrative Court — Collins J dismissed the judicial-review challenges: [2017] EWHC 1147 (Admin).