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THE Government’s response to comments received during its consultation on how to implement the Competition Commission’s recommendations on the supply of prescription-only veterinary medicines appeared on the Department of Trade and Industry’s website last week. The response makes interesting reading – and not only because it clarifies how the recommendations will be implemented with effect from the end of October this year (see pp 302-303 of this issue). It also serves to demonstrate, if further demonstration were needed, just how determined the Government is to apply the recommendations. Its determination has been clear from the moment it accepted the Competition Commission’s recommendations in April 2003 and, despite representations made by the veterinary profession, it has stuck firmly to its position ever since. The one area where it has given ground is in accepting that some aspects of the recommendations can be more appropriately applied by professional regulation than by legislation. This will not lessen the impact of the recommendations. However, it leaves some room for professional judgement and means that, in practical terms, in some areas at least, a degree of sense might prevail.
The Government received 105 responses to its consultation, with most of them (75) coming from individual veterinary surgeons. It says that the majority of respondents – in particular individual veterinary surgeons – disagreed with the general thrust of the recommendations, feeling that the Competition Commission had failed to understand the market for veterinary medicines. The Government rejects this argument, saying it is content that the Competition Commission’s analysis of the market is ‘robust’ and that the problems it identified cause ‘a significant detriment to consumers and other users of veterinary products’. It also rejects suggestions that removing cross-subsidy of professional fees by medicines sales will lead to increased costs overall, commenting ‘The Government expects that veterinary surgeons will continue to set prices at a fair market rate. We accept that consultation fees may rise, but the corresponding downward pressure on prices for medicines should mitigate against this, and may even outweigh this through removal of the inherent inefficiencies of cross-subsidisation.’ It is equally dismissive of concerns about a ‘knock-on’ effect on animal health and welfare if people choose not to take animals to see a veterinary surgeon because of higher ‘up-front’ costs. It says it is ‘unconvinced by this argument, which was originally put forward at the time of the Competition Commission’s report’ and which, it suggests, was addressed in the draft regulatory impact assessment which accompanied its consultation document.
The Government’s determination not to waver in implementing the recommendations in full is further demonstrated by its response to comments on the requirement that veterinary surgeons should not be able to charge for prescriptions for a period of three years. Both the BVA and the RCVS have expressed concern that the measures proposed will reduce transparency in pricing, and that increased consultation costs will adversely affect animal health and welfare. In addition, the Government reports, the requirement was seen by many veterinary surgeons as ‘a direct attack on the veterinary profession, as many felt that providing a prescription was a service that should be chargeable, and prohibiting them from charging for an essential part of their service was demeaning’.
Despite these concerns, the Government remains of the view that ‘the provision is essential to provide an impetus to create a market for prescription-only medicines away from veterinary surgeries. Currently, prescription charges are between £0 and £30 (the average is around £5.24), and high charges prevent customers from shopping around. The Competition Commission felt very strongly that a three-year moratorium on prescription charges was essential to achieving this.’
The Government suggests that some of the concerns may arise from the fact that many veterinary surgeons include the cost of determining how best to treat an animal in their prescription charge or dispensing fee. It goes on, ‘While it is for individual veterinary surgeons to choose how they set their fees, we only intend the “free” element to apply where there is genuine added work in preparing a prescription – the element of determining how to treat an animal should occur in any case where a prescription-only medicine is to be recommended, and where veterinary surgeons are able to separate this from the cost of providing a prescription or dispensing a medicine, then they should be able to charge the full cost of the work to the individual client – as long as there is no discrimination where the work in writing a prescription is genuinely different from what would otherwise take place.’
The Government also remarks, ‘We are sorry that veterinary surgeons see this [measure] as an attack on their professional status, as neither the Competition Commission nor the Government intended it this way.’However, the profession might be forgiven for feeling a little hunted given the way its legitimate concerns have been ignored.
Perhaps one of the most revealing comments is made near the beginning of the response where the Government notes that ‘the Competition Commission looked at the market for veterinary medicines rather than veterinary services’. Throughout, the Government has failed to take account of the wider picture and that, coupled with its seemingly blind adherence to market dogma, has characterised the whole sorry saga from the start.
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