Hewitt listens to fears of small chemists threatened by reforms

The Government yesterday signalled it was likely to water down proposals to shake-up Britain's prescription pharmacy market amid concerns that the changes could put 6,000 smaller chemists out of business.

Patricia Hewitt, the Secretary of State for Trade and Industry, said that while she acknowledged the benefits of greater competition, there were "limits to markets".

She also voiced doubts that "simply deregulating" the sector would enhance the wider role envisaged for local chemists in the NHS Plan. It is thought the Government will now seek a "middle way" which will see a more limited relaxation while offering greater protection to community pharmacies.

Her comments, made in the House of Commons, follow a report by the Office of Fair Trading in January which recommended a radical shake-up of Britain's pharmacy market. It proposed relaxing the restrictions of licence applications, claiming this would increase competition, lower prices and lead to more convenient opening hours.

But the move was immediately criticised on the grounds it would lead to the closure of thousands of smaller, community chemists as the major supermarket groups muscled in.

Vincent Cable, the Liberal Democrat MP, said: "The Government will not be lightly forgiven if you allow the pharmacies to go the same way as the Post Office networks."

Ms Hewitt's said she welcomed the OFT's report: "But I am also clear that there are limits to markets, particularly in the delivery of health services. It is indeed essential that pharmacists should be able to fulfil not only their present valued and trusted role but the wider role that is envisaged for them in the NHS Plan.

"Simply deregulating the market will not do that, so we need a balanced package of measures and that is precisely what we will draw up."

She added that it was not part of the OFT's role to consider the wider health service objectives of the Government. "Let me stress these decisions will be made not by the OFT whose role in these matters is advisory. It will be made by Government and in the full context of the NHS Plan."

Boots, Britain's biggest pharmacy chain which had been seen as a major loser from deregulation, welcomed the developments. The company said: "Whilst we welcome competition, we believe it's in the public interest to retain some form of regulatory framework."