We spoke to Nigel Morley, Consultant Pharmacist, to hear his thoughts about the importance of experience as an expert witness. Nigel Morley has been providing expert evidence in a range of settings for several years. He is one of several pharmacy/toxicology experts on our trustee panel of expert witnesses.
Thank you, Nigel, for speaking to us again. Could you tell us about some examples of pharmaceutical expert witness reports that you have undertaken during your career?
Community Pharmacy Valuations
As an Expert Witness the most common expert valuation I am asked to provide is that of valuing community pharmacies. There are a number of reasons why a fair and reasonable valuation of community pharmacy is needed.
- The pharmacy is being purchased by a third party.
- A shareholder is being bought out by existing shareholders of a community pharmacy.
- A valuation is required by HMRC as a capital gain had been crystallised or for Inheritance Tax purposes of an existing shareholder.
This list is not exhaustive and there are some rarer examples e.g., Compulsory Purchase where there is a significant land redevelopment.
What examples can you share?
An example of such was when an elderly patient of a dispensing doctor’s practice put his car into reverse by mistake. The car went backwards and demolished the dispensary and the practice could not dispense NHS prescriptions for four months. They incurred a finite loss which had to be calculated so a claim could be made against the motor insurers of the patient’s car that caused the damage. Another example that comes to mind was of a community pharmacy that was flooded and the valuation was required of the damaged stock, lost profits and consequential losses.
Are pharmacists ever instructed to provide evidence in criminal proceedings?
There have been occasions sadly where community pharmacists have stolen legitimate medicinal pharmaceuticals from their employers. This is relevant as the valuation of the stolen stock will have significant weight on the determination of the sentence length or the penalty imposed by the courts. In one case, a multiple community pharmacy chain assessed stock stolen at NHS list price ignoring the fact that, because of a ‘brand equalisation deal’, they received an 80% discount. They initially denied knowledge of any discounts but documentary evidence in the public domain contradicted their assertions.
I have been asked for several valuations regarding the value of illicit controlled drugs. The police will invariably value seized illicit drugs at their street value e.g., price per wrap for the individual transaction despite the fact that the quantity seized was of wholesale quantities. As illicit drugs pass down the supply chain the valuations of the drugs when significantly sub-divided can increase 100-fold. In this case, the valuation is not needed for sentencing purposes but for the purposes of the Confiscation of The Proceeds of Crime Act, where there is a direct correlation between the extra imprisonment sentence for failing to pay the Confiscation of The Proceeds of the Crime Assessment. This can amount to imprisonment of several years. In any case, if the assessment is not paid any outstanding amounts can be compulsorily taken from the defendant’s estate, if any.
There will be occasions where the expected dispensing profits of the dispensing practice or of a community pharmacy fall dramatically and significantly below what is expected. At best incompetence is assumed and at worse malfeasance is suspected. In any case, the reasons must be discovered, assessed and remedies suggested. The two usual reasons for the shortfall are fraud and or transfer pricing, which may or may not be of criminal intent.
Fraud against the NHS
The two main significant methods of community pharmacies defrauding their NHS are:
i, Claiming for NHS prescriptions which have not been dispensed, often in collusion with a prescriber.
ii, Fraudulent endorsement on an NHS prescription that a higher priced drug or a significantly larger quantity has been supplied. Examples include:
- Claiming for brands when generics have been supplied.
- Claiming for an outer or pack of ten when a single unit has been supplied.
- Where a prescriber has issued multiple prescriptions either in error or fraudulently and only one has been dispensed.
This list is not exhaustive new methods of fraud occur all the time.
In all the above cases it is important that the Expert Witness endeavours to be totally impartial, neither favouring the Crown nor the defendant in criminal cases where the balance of justice and the rights of the defendant must be observed. It is not for the Expert Witness to make a value judgement regarding the morals of the defendant but issue their report on the facts and the law applicable.
In the case of civil proceedings or matters, the Expert Witness must again be completely impartial between the plaintiff and the defendant parties, or the party undergoing the loss and the party responsible for defraying such a loss.