Aussies don’t care who owns pharmacies: CWH co-founder

Chemist Warehouse
Image by Francisco Anzola

Many of the arguments voiced by those in favour of current pharmacy ownership laws are “truly grounded in self-interest being disguised as community care,” says Gance

CWH co-founder Damian Gance appeared before a public hearing being conducted as part of Queensland’s Parliamentary Inquiry into the establishment of a Pharmacy Council and transfer of pharmacy ownership.

He outlined how instead of retaining the current pharmacy ownership rules, owners should instead be subjected to a “fit and proper person” test, which could see corporate owners act more ethically than pharmacist owners.

“Whilst I can appreciate the historical context and at least fathom the rationale for the introduction of these laws, I contend wholeheartedly that they have no place in a modern Australia,” Mr Gance told the panel.

“Regulation governing pharmacy both national and state based has been reviewed and re-reviewed and re-reviewed many times in the past. Almost without fail, the primary recommendation of these reviews is a deregulation of both ownership and relocation laws. And yet legislative inertia continues to prevail.

“I believe one of the reasons for this inaction is a propensity for decision-makers outside of our industry to confuse the provision of primary pharmaceutical services with the proprietorship of what is a retail business.

“Those who passionately advocate for the status quo will deliberately attempt to blur this distinction.

“Yet as the provision of primary medical care from a general practitioner is entirely unrelated to the ownership arrangements surrounding his or her medical practice, so is the provision of pharmaceutical care entirely unrelated to the ownership of a pharmacy.”

The primary societal benefit enjoyed by Australians through engagement with retail pharmacy is “absolutely in no way” coupled to the ownership structures behind that pharmacy, Mr Gance said.

“Society is for the most part ignorant, if not indifferent, to the commercial structures that stand behind the pharmacy of their choosing. Where the final profits of any transaction reside, the public is not ultimately interested.

“The societal engagement with our relationship with the dispensing and counselling pharmacist – that is a primary one.

“The Australian public forge a bond of trust, and one of respect, with the chemist who assists them with their pharmaceutical needs. And in many, if not most, this is not the store proprietor.”

The notion that pharmacist-only ownership results in a better calibre of owner is “misguided and misplaced,” he said, citing a number of recent cases of poor pharmacist behaviour, each of which plainly showed the individuals putting “profits before health” and shown disregard for patient wellbeing as well as the law.

Damien Gance speaks at the hearing.
Damien Gance speaks at the hearing.

“We are human and we are subject to the same failings and frailties as everyone else.

“The important thing is not whether or not you hold a Bachelor of Pharmacy, but rather that you are ethical, you are responsible, you are of a high moral standing and let me tell you, a pharmacy degree by default does not confer any of these traits.

“The test should be one of a fit and proper person. A fit and proper person test is neither novel nor new but a well-established principle in many areas of the economy.

“The test could include a requirement to demonstrate appropriate upstanding financials, criminal, business and professional histories and I would suggest to you that this is a far superior test in order to establish appropriateness of a person to own a pharmacy business than a simple degree.”

When business and health interests diverge, many pharmacist owners have been found wanting, he said, citing the case of the controversial $1 script copayment discount.

“The vast majority of pharmacies other than Chemist Warehouse do not pass this on. Why? They do not because it is not profitable for them to do so.”

Yet medicines compliance are directly related to cost, he said.

“If failing the fit and proper person test results in an entity losing its rights to own any and all the pharmacies, is the owner of a hundred pharmacies more likely to act appropriately than the proprietor of a single retail store?”

He asked who was more likely to inappropriately dispense, for example, large amounts of oxycontin: a pharmacist owner of a single store with a mortgage, or a corporation with thousands of staff and shareholders?

“Many an argument voiced by those in favour of the status quo are truly grounded in self interest being disguised as community care,” Mr Gance told the panel.

He said that Woolworths, for example, was a good retailer and that if there was a commercial case that consumers wanted pharmacy services such as vaccination and mother-and-baby care in any potential Woolworths pharmacies, “I actually believe Woolworths is more likely to provide those services than a small independent proprietor”.

“To suggest that pharmacists today exclusively believe that providing service to your customer is a good thing is selling every other retailer on the planet short.”

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  1. disillusioned

    think it might be worth handing pharmacies to non-pharmacists, most insiders already know how ethical pharmacists can be… never worked for Chemist Warehouse but can only applaud Mr Gance for speaking up about the issues that are rife in pharmacy.

    To work in Woolworths could be a good thing if you can get a job there: air conditioning that works, a toilet that isn’t broken… many local pharmacies are so run down that the “old fashioned”, “heritage” etc labels are just a facade for a shop that’s falling apart and not to mention another way to hold onto overcharging patients by supplying them “generics”.

  2. geoffrey colledge

    Firstly I think the $1 discount is not a good idea because people who use several prescriptions a year already have the safety net to reach and this is the same regardless of the $5.40 or $6.40 charge.
    Secondly over my career I have seen what has happened with the drug wholesalers. Originally only pharmacists could own shares but now the shares are on the open market. The end result of this has been a decline in the lines that wholesalers stock . Some don’t stock every line ( even if it’s PBS listed ) because some lines are not profitable.
    In the case of nursing homes and doctors surgeries they are not always owned by medical professionals and I’ve noticed that decisions on how they are run are often profit based not patient centred. Profits often come before ethics . The doctors still act professionally but the company discourages long consultations and also short procedures because standard consultations are more profitable.
    In my own practice pharmacists have to dispense an unreasonable number of scripts nowadays just to compete and make a profit because so much profit has been lost to ” the warehouse ”
    This means an average of 3 minutes per script is common,which is unethical and dangerous.

  3. PharmOwner

    Now I’ve heard it all. Anyone from CWH group accusing opponents of their views on pharmacy regulation as “truly grounded in self-interest being disguised as community care,” is quite simply the height of hypocrisy. Mr Gance does make a good point advocating for a fit and proper person test in order to be a pharmacy owner. “The test could include a requirement to demonstrate appropriate upstanding financials, criminal, business and professional histories”. The test could also include an ethical component and whether your ownership group adheres to the PSA code of ethics on such practices as homeopathy. I envisage the time that a fit and proper person test comes into effect and hundreds of Chemist Warehouses are forced to sell because their owners cannot pass such a test.

    • Tamer Ahmed

      This test is technically impossible to make .How can you measure someone’s ethics in pharmacy unless he is a pharmacist who went through years and years of academic training and experience to understand what kind of ethics is needed.

      • PharmOwner

        I’m being a little facetious here. On the other hand, if a pharmacy stocks, and actively promotes homeopathic products (such as Bioglan Homeopathic Melatonin $13.99 on the Chemist Warehouse website), one could argue this is unethical practice.
        According to the PSA code of ethics, a pharmacist “will only purchase, supply or promote any medicine, complementary medicine, herbal remedy or other healthcare product where there is credible evidence of efficacy and the benefit of use outweighs the risk.”

  4. Jarrod McMaugh

    There is a difference between the dis-interest of individuals in who owns a business in which they shop, and “public interest”

    Conflating these two points doesn’t result in a compelling argument.

  5. james koolis

    Damian. Who better to quote on “self interest” than you? Be honest mate, why are you pushing this line? Every pharmacist (non cwh pharmacist, that is) knows why you are arguing for deregulation. Its about time you came out and showed us your hand. Your argument serves nobody but you and your “family”.

    • Joseph Conway

      It sounds like Gance is hoping that deregulation will increase the value of the pharmacies that the Gance and Verrocchi families have personal interest in?
      Currently, no pharmacist group can buy most CWHs in the country effectively making the group worth less than they would be in a deregulated market? In a worse case scenario, they could be broke up though the cat is out of the bag now on that one deregulation is inevitable as Cwh gives the lowest price (on branded products at least).

      Sounds like Mr Gance is lobbying to increase the value of his and his family’s personal assets? This for his self interest not the public interest surely?

    • Ugh

      Love this!

  6. Greg Meaghan

    He asked who was more likely to inappropriately dispense, for example, large amounts of oxycontin: a pharmacist owner of a single store with a mortgage, or a corporation with thousands of staff and shareholders?

    Not necessarily Damien…I have worked with some very ethical owners who would not do such a thing.

    Lately I have been reading about Woolworths owned poker machine venues, and I’m not sure how someone would conclude that there would not be pressure to dispense it either..

    Apparently Woolworths is a good retailer…

  7. Jeff Lerner

    Damien Gance cites:
    ” … the case of the controversial $1 script copayment discount”

    and states: “The vast majority of pharmacies other than Chemist Warehouse do not pass this on. Why? They do not because it is not profitable for them to do so.”

    This statement seriously misrepresents the situation, either intentionally or otherwise.

    There is nothing to pass on. Nothing. ZERO.

    Pharmacies are not given funds to either keep or “pass on” as they choose. It is simply that they are now legally permitted to reduce by $1 the patient co-payment which they are obliged to collect. If they do give a $1 discount it reduces their bottom line.

    Gance’s misrepresentation maligns pharmacists by implying that they are pocketing money which is a government largesse intended to be given to patients. He would certainly know that this is not true.

    To be fair, I concede that I agree with some of what he said.

    I declare that I have no conflict of interest as I moved out of community pharmacy many years ago and am now retired.

  8. Michael Post

    Happy to have deregulation when pharmacists have provider numbers instead of brick and mortar approval numbers. Happy to work for anybody as long as the money flows through pharmacists and is distributed to interested parties rather than funding direct to non-pharmacists. Medical centres are funded in this way and this gives clinical control to medicos.

    I would like to see location rule removal before deregulation occurs to see how it goes and to give all pharmacists the opportunity to practice at their best and in a self-determined manner.

    I agree with James that Damien appears to be willing to sell out his pharmacist employees and colleagues in order to benefit his family.

    The alleged abuses of CPA funding in the past by CW seem to have been overlooked by Damien in his appraisal of ownership by large groups.

  9. Nicholas Logan

    I believe a young, disillusioned pharmacist
    on minimum wage,
    restricted to frantically clerking hundreds of scripts in a dispensary every day,
    for the benefit of a tycoon,
    who is discouraged from professional interaction with consumers,
    with no chance of improving health outcomes in their community,
    and resenting the day they decided to study pharmacy,
    is more likely to dispense inappropriately than an individual pharmacist who has made a significant financial commitment to the community.

  10. Willy the chemist

    Corporate greed and excesses created the GFC with their creative sub-prime mortgages backed securities, lax regulations and oversights.

    Fit and proper persons as directors, accountants and CEOs ran our financial institutions which overlooked the great swindle of ordinary hard working Australians, and is now the reason for the establishment of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry on 14th Dec 2017.

    Whom do I trust?

    Certainly not people whom I don’t believe is within the Pharmacist Act 1974 in regards to pecuniary interest.

    Certainly not the large corporations who have been stealing from ordinary hard working Australians.

    Certainly not all those fit and proper Directors, CEOs, Accountants and their mates.

    I trust the ordinary hard working Australians more than any of you.

  11. John Wilks

    I think I will need a few cups of coffee and a revision of logic 101 to fully comprehend the wisdom and insights of a multimillionaire who has a stranglehold on pharmacy ownership yet suggests that “Many an argument voiced by those in favour of the status quo are truly grounded in self interest being disguised as community care.”

  12. Tamer Ahmed

    One of the main reasons that the ownership of the pharmacies is given to the pharmacist is that it puts pressure on him to fulfill the regulatory authorities requirments to continue owning the pharmacy.And in the case that he fails to do so he looses the buisness.Now how are you going to take away the right of proprietorship from a person who is not a pharmacist who doesnt need to be registered to practice ?How are you going to provide the working pharmacist his needed autonomy when even the pharmacist owners push pharmacists to break professional boundaries or risk getting fired ?

  13. David Lund

    How can corporate owners be more reliable or trustworthy than the average hard working Aussie Pharmacist? Aussies will worry when they don’t have quality pharmacists serving them when they leave the industry

  14. Willy the chemist

    Excuse my dim view of the article, especially Mr Gance advocating deregulation. I can’t help but be a little cynical. If you suggest to give the keys to the money safe to robbers, do you think they won’t want the keys?
    Fit and proper white collar executives, accountants, financial planners, banking & finance directors have been robbing Australians blind. Today Mr Gance who is a many times over multi-millionaire is suggesting we give the keys of the vault to them for safe keeping. Safe keeping, wink wink.

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