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Internet pharmacy Advice, rules and regulations for setting ADVERTISEMENT

22 April 2015 up an internet pharmacy

! There are 496 distance-selling pharmacy websites currently
By Gareth Malson registered in the UK. What do pharmacists who want to set up
their own online pharmacy need to know?

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IMAGEZOO / ALAMY

Fancy owning your own pharmacy? You could buy an existing one. You will
need to pay several times its net profit for the business’ goodwill but, after a
decade of hard slog to pay off the bank loan, the business and all its profits will
be yours.

If this initial outlay is off-putting, you could set one up from scratch. However,
anyone wanting to open a pharmacy that dispenses NHS prescriptions must
apply to their NHS England local area team to be included on the local
pharmaceutical list. For a traditional bricks-and-mortar pharmacy, you will
need to justify the need for it.

For an internet pharmacy, however, you do not. So is this a business

opportunity worth considering, and what do applicants need to consider when
setting one up?

A misnomer
The correct term for an ‘internet pharmacy’ is, in fact, a ‘distance-selling’
pharmacy, explains Conor Daly, a pharmacist and barrister, and a partner at
consulting firm Rushport Advisory. The company consults to a wide range of
pharmacy contractors about how to secure permission to open internet
pharmacies, and writes standard operating procedures for them. “The term
‘distance-selling’ comes from the fact that there can be no face-to-face contact
between patients and the pharmacy staff for the delivery of essential services,”
he explains. “Contrary to popular opinion, patients are allowed to access the
pharmacy but only for non-essential services — for example, medicines use
reviews (MURs).”

Such a set up could give rise to ethical dilemmas. “If a patient were to present a
prescription at the same time as receiving an MUR, the pharmacy staff are
obliged to refuse it as it would be contrary to their terms of service,” says Daly.
“Such refusal to dispense will feel very odd for a professional pharmacist.”

Building a business plan

“Internet pharmacies must be willing to supply medicines against a prescription
to anyone in England,” Daly points out. “However, in reality, most will target
their local area for business.” He explains that if a person arrives at the
pharmacy with a prescription they must be turned away, but if the pharmacy is
located in Newcastle and someone in Cornwall posts them a prescription then
the pharmacy cannot refuse it and must deliver it to the patient free of charge
(see: ‘Registering a distance-selling pharmacy’).

Registering a distance-selling pharmacy

Whether you intend to set up a bricks-and-mortar pharmacy or a
distance-selling pharmacy, you will need to register in the same way with
the General Pharmaceutical Council (GPhC). The cost for registering a
pharmacy with the GPhC, along with the necessary forms and fees, can be
found on its website. A new application for registration currently costs
£568, plus a first entry fee of £221. There is also a £50 application fee
(and conditions of use) when applying to use the GPhC’s voluntary
internet pharmacy logo.

However, the process for securing a new NHS dispensing contract is

different for the two types of pharmacies. Bricks-and-mortar pharmacies
must prove there is local need for a new pharmacy — typically by
referring to the local pharmaceutical needs assessment. They are able to
provide patients, both face-to-face and online, with essential services
(such as dispensing) and advanced and enhanced services. Internet
pharmacies only need to prove that they will comply with the distance-
selling rules to secure an NHS contract. They can also provide patients
with enhanced and advanced services on the premises, but cannot
provide essential services on, or in the vicinity of, the premises.

“There are internet pharmacies that regularly dispense over 10,000 items per
month,” Daly adds. “The largest dispenses over 50,000 items per month, so it is
possible to dispense high volumes of items if the business proposition is right.
But there is no point in just setting up a pharmacy and website and thinking the
prescriptions will start flooding in automatically — they won’t.”

As soon as your internet pharmacy is up and running, you need to have a

method for getting prescription medicines to patients. Ian Ashby, pharmacy
superintendent for PCPDirect.co.uk, says that around 95% of his prescriptions
are delivered to local patients by delivery drivers employed by his business. The
rest need to be sent by courier or registered post. This could mean that a
pharmacy owner would need to spend around £7 to send 28 aspirin tablets by
Royal Mail, he suggests as an example.

According to the General Pharmaceutical Council (GPhC), there are currently

496 websites attached to 453 pharmacy premises registered in the UK, so there
is already a lot of choice available to customers. Your chances of business
success could be enhanced if you offer something that others do not.

“Aim to find yourself a niche product as this will make your business stand out
from the crowd,” Ashby recommends. When his internet business started, his
business partner identified a natural soap made using spring water from
Yorkshire. They secured exclusivity with the product’s manufacturer and the
agreement has been a win-win for both businesses — boosting sales of the soap
while drawing more internet traffic to Ashby’s website.

“You will also need to decide the best way to advertise your services — this may
be through leaflet dropping or advertising in the local press. Therefore, think
carefully about whether there is a market in your area,” Ashby adds.

Care homes are one audience that could be targeted by a distance-selling

pharmacy as a method for getting prescription figures up quickly. This is a tactic
that Ashby has used but, with hindsight, he warns: “They recognise their value
and tend to demand something in return for switching to use your service. We
are also often faced with late evening requests for urgent antibiotics. Are you
prepared to offer exceptional service levels?”

Internet versus bricks-and-mortar pharmacies

There are undoubtedly pros and cons for owning an internet pharmacy. “On the
plus side, it offers pharmacists an opportunity to open their own pharmacy
without having to buy an existing business or argue the need for a new NHS
dispensing contract,” Ashby points out. “It also offers the opportunity for
pharmacies to be built in areas where community pharmacies aren’t
traditionally located — such as industrial estates.”

“The biggest disadvantage is the lack of patient contact. It doesn’t matter how
many questions you ask someone by phone or by email — you will still miss the
mannerisms and facial expressions of a face-to-face discussion.

“You will also need to make the case for patients to use you rather than walk
into their local pharmacy. That said, with several internet pharmacies [having]
become well established, there is clearly a market for them.”

Selling overseas
Although internet pharmacies are not contractually obligated to dispense
prescriptions from other countries, the worldwide web does provide an
opportunity to tap into markets on other shores. However, Ashby warns, you
need to be aware of the import restrictions that exist in other countries. This
information is usually available from government websites for the countries in
question.

Value of online pharmacies

Although rare, online pharmacy businesses do occasionally become available
for purchase, allowing the buyer to inherit its existing customer base. Ashby
believes there are pros and cons to buying an existing internet pharmacy and
highlights that, once purchased, one could be moved to any other part of the
UK. “You would need to decide whether the head start you get from adopting an
existing business is worth the additional investment,” he surmises.

Setting up the pharmacy

Before you can apply to be on the NHS pharmaceutical list, you need to identify
suitable premises. Daly says that any type of premises can be used to operate
an internet pharmacy — be they residential, retail, office or warehouse. There
are two provisos:

a. Will the council allow a distance-selling pharmacy to operate from the

premises?

b. Will the GPhC approve the premises?

“It is worthwhile talking to the local council early to get their view on the
suitability of the premises,” Daly suggests. “Anyone looking for premises will
need to ask the landlord what type of planning permission the proposed
premises has and check with the local council to ensure that it allows you to
operate a distance-selling pharmacy.

“You may need to submit a planning application or request formal confirmation

from the local council that the premises may be used in the way that you want
to. The landlord is also likely to want to know what type of business will be
operating from their premises.”

NHS dispensing contract

Successfully applying for an NHS dispensing contract will be an essential
component of the business model for most distance-selling pharmacies. “Many
internet pharmacy applications are refused because applicants don’t provide all
necessary information with their application or, worse still, provide information
that shows they will not operate in accordance with the regulations without
even realising it,” Daly warns. The main difficulty applicants face, he says, is
Regulation 25(2)(b) — it states that the NHS must refuse the application unless it
is satisfied that the pharmacy’s procedures are likely to secure: the
uninterrupted provision of essential services during the opening hours of the
premises to persons anywhere in England who request them; and the safe and
effective provision of those services without face-to-face contact between any
person receiving those services (whether for themselves or on someone else’s
behalf) and the pharmacy staff.

“Applicants often ask whether the mention of ‘pharmacy procedures’ means the
local area team will want to see standard operating procedures,” Daly adds.
“They may do. Each area team in England seems to interpret the regulations
differently. Even within the teams, individual members of staff can interpret
things differently. We have seen examples of two identical applications
submitted to two different area teams where one was approved and the other
refused. However, since it costs £750 to submit an application, it’s worthwhile
getting it right first time.”

GPhC licence
“Once the application is approved, the pharmacy normally has six months to
open — although it is possible to extend that period by three months,” Daly
explains. “GPhC approval is the next hurdle. A pharmacy cannot open unless it
is approved by the GPhC. While the GPhC publishes guidelines on premises
standards, these are also open to interpretation and different GPhC inspectors
can take slightly different approaches. It is therefore worth involving the GPhC
as early as possible.”

A GPhC spokesman told The Pharmaceutical Journal that premises can only be
registered as a pharmacy if the owner’s service model from those premises
includes one of the following:

1. The sale of Pharmacy (P) medicines;

2. The supply of P medicines or Prescription-only medicines (POMs) against

prescriptions;

3. The supply of P medicines or POMs against prescriptions written by

veterinary practitioners for the treatment of animals under the ‘cascade’.

The spokesman added: “All services provided from registered pharmacies and
by pharmacy professionals must comply with our standards. Our standards,
and the legal requirements that apply to supplies made in a high street
community pharmacy, apply equally when a supply is made over the internet.
[Pharmacy professionals] must also make sure that they do their best to provide
medicines and other professional services safely … and be satisfied that patients
know how to use their medicines.”

Consultation on draft GPhC guidance for internet and distance-selling

pharmacies ended in December 2014. Feedback from that consultation is being
reviewed and the amended guidance will be published in the coming months.

No shortcuts
For those who think an internet pharmacy might be a shortcut to a
bricks-and-mortar pharmacy, Daly highlights the following circumstance:

“A pharmacy company in north west England thought there was a

loophole in the regulations and decided to open internet pharmacies with
a twist. They would have two separate premises within the same building
that were connected by a hatch in an internal wall through which
information, documents and medicines could be transferred. One
premises was used to collect the prescriptions. These were then sent to
the second premises for dispensing and then back again to the first
premises for collection by patients. The company involved set up several
such pharmacies until primary care trusts challenged their legality. Each
one ended up being shut down and the company went into administration.

“I still receive enquiries from pharmacists who think they are the first to
spot this loophole even though people have tried to exploit it since 2005,”
he says.

“The 2013 Regulations say that the pharmacy must not offer to provide
essential services to persons who are ‘present at’ — which includes ‘in
the vicinity of’ — the listed chemist premises. I suspect there will be
further challenges to this wording as the word ‘vicinity’ is considered by
the courts to mean the same as ‘neighbourhood‘ — so it could cover a
very wide area.”

Internet pharmacy in the United States

In the United States, since patients pay for most prescriptions, they are
free to choose where they get their medicines dispensed (i.e. pharmacies
do not need to be put on an equivalent to the NHS pharmaceutical list). A
spokesman for the National Association for Boards of Pharmacy told The
Pharmaceutical
Journal that legitimate internet pharmacies in the United States must be
registered with the pharmacy board for the state in which they are
located, and with the pharmacy boards for any state “into which they
practise pharmacy”.

However, he added: “If a rogue pharmacy is located outside of the United

States and is obtaining drugs from non-US sources, it may deceive
patients into believing that the entity is legitimate”. Consequently, the
‘Verified Internet Pharmacy Practice Sites’ programme has been
developed. This, the spokesman explained, “assists the regulatory efforts
of the state pharmacy boards in identifying sites that are rogue — most
of which are located outside the United States — or pharmacies
operating in the United States contrary to internet pharmacy laws and
regulations”.

Last updated 12 February 2021 16:24

Citation
The Pharmaceutical Journal, PJ, 25 April 2015, Vol 294, No
7859;294(7859):DOI:10.1211/PJ.2015.20068262

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