Supermarket Pharmacies Would Lower Medicine Costs

Supermarket Pharmacies Would Lower Medicine Costs, Provide Longer Opening Hours

Removing pharmacists’ monopoly control over chemist-shop ownership would reduce the cost of prescription medicines, extend opening hours and benefit rural locations, supermarket operator Foodstuffs has told Parliament’s health select committee.

The Foodstuffs NZ Ltd submission to the committee today stated that an Office of Fair Trading study in Britain – where there are 450 supermarket pharmacies – showed that:

The average supermarket pharmacy opens around 80 hours a week, compared with around 50 hours a week for the average independent pharmacy

Supermarket pharmacies reduced prices for a basket of pharmacy-only medicines by up to 30 per cent compared with other pharmacies.

When pharmacies faced competition in their locality it tended to result in improved quality of service

After the delivery of the submission, Managing Director of Foodstuffs (NZ) Ltd, Tony Carter said that: “These are the sort of benefits New Zealand consumers could expect if ownership of pharmacies was opened up in New Zealand.”

He emphasised that under the supermarket proposals for law changes, qualified and registered pharmacists would still be in control of any supermarket pharmacies and there would be no compromise on professional, consumer safety or security standards.

The Foodstuffs submission to the select committee stated that the Health Practitioners’ Competency Bill, if passed in its current form, would essentially maintain pharmacists’ monopoly control over pharmacy ownership, contrary to Government’s stated intentions of moving to a system of open ownership.

Citing the results of the United Kingdom study released in January, the submission pointed out that the Office of Fair Trading found that entry regulations “inhibit price competition” and “stifle efficiency improvements and innovation”, as well as “limit the availability of pharmacy services.”

Tony Carter said that if permitted in New Zealand “open ownership will result in a greater number of pharmacies, wider geographical spread of pharmacies, benefiting rural populations, and will lower the price of medicines and other pharmacy-only products.

“This all adds up to greater accessibility for all New Zealanders to medicines – a key objective of the primary health care strategy.”

He said the pharmacists’ monopoly on ownership was “an anomaly of history which places pharmacists in a privileged trading position and enables them to maintain margins higher than the norm in the retail industry - to the obvious disadvantage of consumers.”

Third-party ownership would also open up new career opportunities for pharmacists and could revitalise what was an ageing profession. The safety of pharmacy services would not be affected – only who could own a chemist-shop.

Mr Carter said open ownership was common overseas. Apart from the UK and Ireland, several European countries permitted non-pharmacist ownership, as did all but one state in the USA.

In New Zealand, non-professionals were already permitted to own hospitals, doctor and dental surgeries and other healthcare businesses. The professional standards of health services had not been adversely affected by having non-professional owners.

The submission stated that the only major groups opposing change in the pharmacy ownership situation were organisations representing pharmacists’ interests and no Government agency or consumer organisation opposed open ownership.

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