The Conflict of Interest Inherent to Community Pharmacy in England: A Game-Theoretic Analysis of the Failure of the Medicines Use Review (MUR) Service

69 Pages Posted: 18 Nov 2021

See all articles by Richard J. Fairchild

Richard J. Fairchild

University of Bath - School of Management

Jon Lischetzki

affiliation not provided to SSRN

Date Written: October 13, 2021

Abstract

The Medicines Use Review (MUR) service was costing the NHS £100 million per year in England alone, before the NHS decided to stop commissioning the service from community pharmacies. Game theory has not yet been applied to pharmacy practice, and has never been applied before to the MUR. However, thinking about this problem from a game theoretic perspective can yield interesting insights in an analytical process which Camerer (2003) calls “post-diction”, as opposed to prediction.

This dissertation will show how the MUR service’s failure can actually be seen as the inevitable outcome of each competitive player’s implementation of a payoff-maximising, dominant strategy. The incentive structure faced by the community pharmacy service providers gave rise to a real-world prisoner’s dilemma, with a Pareto-inefficient Nash equilibrium; a strategic trap in which nobody could increase their payoffs by individually taking a different strategy, despite the possible existence of an outcome that was better for all competitors.

The outcome was also bad from a societal perspective, due to the cost of financing an MUR service which failed ultimately, to deliver on its potential societal value.

An examination of the nature of our players and their respective value-systems, will help to diagnose what the author believes to be a fundamental flaw in the financial structure of NHS-commissioned, private pharmacy services. The author then proposes a solution to the financial structure of the pharmacy sector, which might better enable this arm of the pharmacy profession to act according to the best interests of the society for whose benefit it is employed to work.

Keywords: Health Service, MUR, Behavioural Economics, financial versus social incentives, game theory

JEL Classification: I11

Suggested Citation

Fairchild, Richard J. and Lischetzki, Jon, The Conflict of Interest Inherent to Community Pharmacy in England: A Game-Theoretic Analysis of the Failure of the Medicines Use Review (MUR) Service (October 13, 2021). Available at SSRN: https://ssrn.com/abstract=3941775 or http://dx.doi.org/10.2139/ssrn.3941775

Richard J. Fairchild (Contact Author)

University of Bath - School of Management ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom
01225 323456 (Phone)
01225 323902 (Fax)

Jon Lischetzki

affiliation not provided to SSRN

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