Owners speak up on location rules

Should they be left alone, tweaked or scrapped altogether? King Review submissions reveal a variety of opinions

So far the Review of Pharmacy Remuneration and Regulation has received and published 37 submissions from the public.

These submissions cover a range of topics including CAMs, pharmacist wages and more.

Here we delve into some of the submissions – mostly from pharmacy owners – looking at location rules, regulation and ownership in the sector.


Great for patients

Paresh Kerai, a pharmacy owner from the Wimmera Region of Victoria, says location rules are crucial to supporting pharmacy development in regional and rural Australia.

“The existence of location rules is probably the reason why I own a pharmacy in a rural town,” says Kerai.

“I am a bit surprised about the panel’s stance on relaxing the rules in cities and maintaining them in the country. I think the opposite should be happening.

“Relaxing them in the cities alone would allow many to explore opportunities there and perhaps result in the closure of rural pharmacies.”


Pharmacy owner Craig Clark, from Bunbury in WA, says “the current system has given Australia a great and fair distribution of pharmacies” throughout the country, increasing their value and making them more efficient.

However he highlights the ownership of pharmacy, saying it “should be tightened up and reviewed”.

“We should tighten ownership rules to only two pharmacies per pharmacies, allowing new graduates the ability to purchase a new pharmacy,” he says.


In his submission, Tim Rudd from Bawley Point in NSW says he is concerned that the panel’s discussion paper looks at other countries in which location rules have been removed.

“Many/most of these countries are not physically as large as Australia. Also Australia has an unusually low population density which deserve due consideration. Many of our residents live in small rural towns instead of build-up urban areas,” he says.

“Deregulation tends to result in more pharmacies opening in urban areas which already have good accessibility,” writes Rudd. This would put pressure on the rural pharmacies which would lose some business to new discount outlets, making them unviable, he says.


Warwick Best, owner of Bests Pharmacy Cherrybrook in NSW, says the current arrangements for pharmacy regulations, ownership and location rules work well and should not be changed.

“While the location rules are anti-competitive they help to achieve a high level of patient care,” he says.

“The people who come into our pharmacy are patients, not customers. I believe the current system works and provides good value for the money the government spends on it.”


Owner of two pharmacies in Geraldton in WA, Ross McKay, says location rules as they stand are “the least of our problems”.

“The current location rules seem to be working well in most instances, in terms of spreading pharmacies out from CBD areas into medical centres and the suburbs,” McKay wrote in his submission to the review.

However, he is concerned about large pharmacy chains.

“I can see the future being dominated by big box discounters with few services and the smaller full-service, independent pharmacies like mine disappearing.”


Mark Browne, owner of an Amcal Max pharmacy in Gympie, QLD, sees the landscape in much the same way.

“The current location rules have served the industry well to enable fair distribution of pharmacy services,” he says.

While recent location rules have allowed small communities to set up pharmacies, Browne argues out that “many of the state ownership rules are flouted by the C. W. group”.

“If the government believes they just want cheap drugs, you could bypass retail pharmacy, CW and the like and arrange alternative outlets like ALDI to sell drugs… However retail pharmacy is not about product. Health service is our business,” he says.


The need for change

Pharmacist Proprietor requests the review panel to consider relaxing the 1km short distance relocation rule.

“My pharmacy is very small in size and the nearest retail shops available is just under 1.5km. There are no retail shops available for lease under 1km. I hope to be able to relocate to the nearest retail shop available and still be 500m away from the nearest approved pharmacy (similar to the old short distance relocation [rule]).

“If I could relocate, then I’d be able to extend my pharmacy services to include a vaccination room and more stock AND perhaps tender for the 24 hours super clinic,” they say.


Meanwhile community pharmacy owner in Condobolin in NSW, Dave Rees, argues that the rural-related location rules should be even tighter.

“I feel that the rural location rules do not provide enough security to patients as they currently stand. When the population criteria was removed from the pharmacy location rules it left a window of error for towns of our size in my opinion,” he says, referring to rule 132 – new additional pharmacy.

“I feel that our population would not be enough to sustain two pharmacies, yet if we had four GPs (or other doctors) full-time equivalent, we could potentially have another pharmacy opened in our town.”

Rees explains that his pharmacy already faces increased competition from online and mail-order pharmacies and asks the panel to change the rules so they reflect town populations.


Pharmacies in general practice

In contrast, GP Dr Ivo Buters from WA argues that the current location rules unfairly favour existing pharmacy owners from new competition.

Dr Buters explains that he is the principal and owner of a medical centre, and has approached several pharmacists to start a business from the medical complex.

“They are all extremely interested and would be keen to take up a lease. However the current pharmacy location rules prevent them from obtaining a licence from the Department of Health at our location,” he explains, citing the distance rules as well as criteria that eight or more full-time doctors should consult at least 38 hours per week.

“This makes it extremely difficult if not impossible for existing established medical centres to expand and attract a co-located pharmacy unless the local pharmacy owner is happy to move their existing pharmacy,” says Dr Buters.

“If this type of restricted trade arrangement had been made by any other non-government body the ACCC would investigate and fine associated parties for anti-competitive behaviour.”


Pharmacist Harriet Wright, on the other hand, expresses her cynicism of deregulation and GPs’ foray into pharmacy.

“I can see a number of GPs who become keen to open a pharmacy – write a script, get it dispensed and then pocket both ends of the government subsidy,” she says.

“Or the big business supermarket chains who will simply open up, put everyone out of business and then own the market and set the pricing themselves.”


You may be interested in:

Location rules here to stay

Pharmacy location rules in question

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