Discount pharmacy chain concerns

Cancer care is soon to be overhauled, but Pharmac should be left alone. PHOTO: ODT FILES
Discount chains’ focus on retail sales was to offset losses from waiving government prescription charges. PHOTO: ODT FILES
Free prescriptions offered by discount pharmacy chains are driving some smaller pharmacies out of business, the Pharmacy Guild of New Zealand says.

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.



Yeah, yeah, yeah. We've heard it all before.
Pharmacies are businesses, first and foremost. They are in business to make a profit for their owners, as big a profit as they can, like any business. They are not they to provide a community service, the belief that they are is the result of a superbly orchestrated public relations programme that has been going on for the last several decades.
Like it or not pharmacies are operating in a free market and they either adapt and find new strategies to deal with the new competition or they go out of business.
There seems to be a growing trend among retailers who are facing competition from new and innovative competition to cry foul when their profits start to suffer. Rather than adapt to effectively compete they look for support, usually from the govt, to restrict the practices of the new competition or to penalize them in some way or to provide some sort of subsidy so they can stay in business.
My feeling is that they should stop whining and do something positive and innovative to maintain their customer base.


Our journalists are your neighbours

We are the South's eyes and ears in crucial council meetings, at court hearings, on the sidelines of sporting events and on the frontline of breaking news.

As our region faces uncharted waters in the wake of a global pandemic, Otago Daily Times continues to bring you local stories that matter.

We employ local journalists and photographers to tell your stories, as other outlets cut local coverage in favour of stories told out of Auckland, Wellington and Christchurch.

You can help us continue to bring you local news you can trust by becoming a supporter.

Become a Supporter