Pharmacies warned about potentially unjustifiably high pricing

The Competition and Markets Authority (the CMA) and the General Pharmaceutical Council (the GPhC) have today issued a joint letter to pharmacy owners and superintendent pharmacists to highlight concerns raised about potentially unjustifiably high pricing in community pharmacy during the pandemic.

The CMA and GPhC have said that they have received reports alleging that a small minority of pharmacies are seeking to benefit from the coronavirus pandemic by charging unjustifiably high prices for essential products. These products include hand sanitiser, face masks and paracetamol all of which continue to be in very high demand.

The CMA has recently launched investigations into four retailers, including pharmacies, that it suspects have charged excessive and unfair prices for hand sanitiser products during the coronavirus (Covid-19) pandemic. The consequences of the CMA reaching a final finding that competition law has been infringed are potentially significant and include the possibility of financial penalties.

The CMA has recognised that pharmacies may be facing additional operational costs at this time, such as for additional cleaning and PPE. While such costs might justify a limited increase in general mark-ups, the CMA has said that it does not consider that they would justify a pharmacy ‘disproportionately increasing its mark-ups on essential products unless the additional costs specifically relate to the sale of those products’.

The CMA has also said that it is concerned about any price charged by a pharmacy for an essential product that is higher than the price that would prevail under normal competitive market conditions (i.e. before the coronavirus pandemic) as a result of the pharmacy adding a higher than usual percentage mark-up on the wholesale price it has paid.

The GPhC has said that it will not usually take action on matters that are purely commercial in nature and have no medicinal or practice-related element unless there are broader issues that would impact on public confidence. For example, any pharmacy or pharmacy owner found to have breached competition or consumer protection law risks facing action by the GPhC for damaging public confidence.

The GPhC is engaging with the CMA to ensure that they use their respective roles and powers in a ‘complementary and proportionate’ way during our assessment of complaints received about pricing practices.

The letter was issued with the additional aim of reminding pharmacy owners and pharmacy teams of the respective roles of the two organisations and how they are now working collaboratively together.

The CMA and GPhC commented:

“The services provided by pharmacies are especially important to the lives of many people at the present time who are relying on the care and professionalism of pharmacy professionals, teams and owners. It is vital that trust in pharmacy continues to be maintained.

“We would like to thank the vast majority of pharmacies who are striving to do the right thing and look after people under exceptionally challenging social and business circumstances. Unfortunately, we have received reports alleging that a small minority of pharmacies are seeking to benefit from the coronavirus pandemic by charging unjustifiably high prices for essential products – including hand sanitiser, face masks and paracetamol – which continue to be in very high demand.

“Whilst the numbers involved may be small, the issue has been prominent in the public eye. We are therefore writing to all pharmacies to explain the General Pharmaceutical Council’s and the Competition and Markets Authority’s respective roles and expectations as regulators in relation to this important issue during the pandemic.”

Pharmacies experiencing large price rises or other unfair practices from their suppliers are encouraged to report this to the CMA by using its online complaints form available by clicking here.

You can read the letter in full below.