Discount pharmacy chain concerns

Free prescriptions offered by discount pharmacy chains are driving some smaller pharmacies out of business, the Pharmacy Guild of New Zealand says.

• Cutting stores to counter competition
• Duty of care first concern
• Bargain Chemist director defends business model
• Risk seen to rural, suburban business

Discount pharmacies are more focused on retail sales than on services to keep New Zealanders well and out of hospital, guild chief executive Andrew Gaudin said.

The guild was calling on the Ministry of Health to step in.

The growth of discount chains was distorting the community pharmacies sector, Mr Gaudin said.

Discount chains’ focus on retail sales was to offset losses from waiving government prescription charges.

Big pharmacies such as Bargain Chemist and Chemist Warehouse waived the $5 pharmaceutical co-payment on subsidised medications.

Their bulk retail buying power allowed them to cram shelves with discounted non-dispensary items such as vitamins, baby food, sports supplements, first aid and beauty products.

"It is important to understand that the Government collects the $5 charge from the pharmacy, whether or not the patient was charged," Mr Gaudin said.

"Discount retail pharmacy chains are putting independently owned and operated community pharmacies, that have a greater focus on service provision, under significant financial pressure."

A growing number of community pharmacies were losing market share to the big retail chains, leading to smaller pharmacies cutting services, opening hours, and staff, and in some cases closing altogether, he said.

"This issue should be fixed by removing the Government’s $5 prescription charge. The guild is currently pursuing this further with the health minister.

The Southern District Health Board was open to discussion on community pharmacy services to ensure the needs of the southern population were well served, board strategy, primary and community executive director Lisa Gestro said.

The SDHB contracted community pharmacy services to pharmacies who were licensed by the Ministry of Health, and met service, quality and safety standards required by the Community Pharmacy Services Agreement.

"We are aware that pharmacy is a rapidly evolving sector, and we will maintain a strong interest in seeing how different approaches uphold these standards and meet the needs of customers," Ms Gestro said.

The Otago Daily Times sought comment yesterday from the ministry and Pharmaceutical Society of New Zealand but did not receive responses by deadline.