Pharmacy ownership rules “irrelevant”


Chemist Warehouse Woden, September 2013.
Chemist Warehouse believes there is not enough competition under the current pharmacy model.

Chemist Warehouse’s market power is leaving existing rules exposed, national newspaper claims 

The recent deal between the My Chemist/Chemist Warehouse Group and EBOS Group has revealed both the market power of CWH and the irrelevance of existing pharmacy ownership laws, a national media column has claimed.

The Australian Financial Review’s Chanticleer column said yesterday (3 July) stated that “the spirit of the ownership limit law is now being broken in every state by a number of chemist retailing groups”.

In what may be the first shot in the lead-up to 7CPA negotiations, the article said “It is obvious from the networks of retail pharmacies operating in Australia under various national brands that the decades-long campaign by the Pharmacy Guild to protect pharmacists from supermarket-like operations is a complete failure.”

“The Guild… has been powerless to stop multiple groups building pharmacy chains which threaten the earnings of Guild members.”

In response, the Guild said it was “determined to ensure that the pharmacy ownership rules are maintained and enforced.

“In every State and Territory, these laws prohibit anyone other than a registered pharmacist from owning a community pharmacy.

While the laws differ slightly between jurisdictions, their intent is the same. Lawmakers around Australia have made clear that pharmacists – not big corporations – should own and control community pharmacies”.

A Guild spokesperson said it had been encouraging all pharmacy registering authorities to ensure proper scrutiny of applications for approval.

Pharmacy ownership rules have come under criticism in the last year with Ramsay Healthcare having said that “ensuring the safe and competent practice of pharmacy and related services does not require a registered pharmacist to own a pharmacy”.

In addition, the switch of MC/CWH supplier from Sigma to EBOS demonstrated the market power of the former, Chanticleer claimed. 

“It has managed to lever its market share of 7 per cent of the national pharmacy network… into a 25 per cent share of the overall market by revenue,” the article said. 

Previous Full steam ahead for Sigma?
Next Cannabis and pain: it's complicated

NOTICE: It can sometimes take awhile for comment submissions to go through, please be patient.

11 Comments

  1. pagophilus
    04/07/2018

    Not only are the ownership rules irrelevant, but how level is the playing field with prices/discounts negotiated with the CMH/MC group? How much less will they pay for the same products from the same wholesaler as someone else? How about trading terms?

    • Willy the chemist
      04/07/2018

      The ownership rules are not irrelevant. In fact this is the reason why they are required. Health should ultimately not be privatised and deregulated for pure profit.
      Ownership rules have not been enforced by the pharmacy authorities, and these failure rests squarely on their shoulders.

    • M M
      16/07/2018

      Purchase power, bulk buying and Minimum order quantities are all relevant in this context “Big pharmacy chain; > 30% market share and an efficient wholesaler”

  2. chung Liauw
    04/07/2018

    The business of pharmacy, like all business will progress to areas that are most favourable, this is what is occurring. Pharmacies, like all businesses, move to models that are most profitable for the least effort.

    We have three core elements in our repertoire, our retail business, our dispensing business and our individual professional skills. You can commoditized the first two but the last is unique to each of us and under utilised, The commoditization of our pharmacy will lead to the inevitable direction of the US pharmacy model. The good news is it difficult to commoditized professional social health skills. Change the fight.

    The Guild’s role in the 6CPA is to be commended and has represent a significant contribution to pharmacy..
    However, it needs to refocus its leadership role in furthering tools and activities in CONSUMER paid professional services (non-product based) in a sustainable innovative approach addressing the changing consumer environment.
    It had developed its own business in an attempt to make the Guild sustainable. Now these businesses have had unintended consequences of having a priority to treat its members as customers for its Guild products and barriers to entry to external innovation which are deemed to be competition.

    The grass roots empowerment of the Guild needs to occur to ensure the continuation of one of the best pharmacy services in the world. Guild has been a great organization for pharmacy and can still be going forward – maybe its just lost its way for now. Note: the PSA is also on a similar trajectory. We need to take action ourselves and not wait for a benevolent solution to appear!

  3. Vahe
    04/07/2018

    This is what happens when the corporation take control, the whole nature of the industry changes & our private ownerships go under the heavy weight of mogouls with unlimited funds for lobbying & legal power.
    We either stick to our guns & fight or give it all up & our future pharmacists will nearly be franchises like HN & 7Elevens with just a wage & if lucky end of year bonus if the shareholders are pleased with their fat cuts!!

    • M M
      16/07/2018

      There are Pharmacy Groups in Australia as well as individual pharmacies that set budgets and end of year bonus. Should we report them? and who do you think we should report them to?

  4. Anthony Tassone
    04/07/2018

    There are a number of important public interest reasons for maintaining ownership and control of pharmacies in the hands of licensed pharmacists.

    Ensuring that a pharmacist owns and controls a pharmacy practice is a social objective underpinned by pharmacy legislation. It reflects the community expectations and desire to maintain the integrity of the professional relationship between pharmacist and patient.

    That relationship hinges on trust and personal service, with pharmacists being directly accountable and liable for the services they provide. The clear intent of the ownership legislation is to ensure that professional standards and principles are not subordinated to commercial objectives and pressures in the practice of pharmacy.

    While the laws differ slightly between jurisdictions, their intent is the same. Lawmakers around Australia have made clear that only pharmacists – not big corporations or anybody else – should own and control community pharmacies.

    The role of the registering authorities is to ensure that only registered pharmacists can hold a proprietary interest in a community pharmacy. In some States and Territories.

    Pharmacist-only, pharmacy ownership is fundamental to the community pharmacy model and has been supported by political parties and parliamentarians from across the political spectrum.

    Anthony Tassone
    President, Pharmacy Guild of Australia (Victoria Branch)

    • M M
      12/07/2018

      “There are a number of important public interest reasons for maintaining
      ownership and control of pharmacies in the hands of licensed pharmacists”

      May you please list those reasons? and may you please clarify who do you refer to as “Public”?

    • M M
      12/07/2018

      “There are a number of important public interest reasons for maintaining
      ownership and control of pharmacies in the hands of licensed pharmacists”

      May you please list those reasons? and may you please clarify who do you refer to as “Public”?

      • Anthony Tassone
        15/07/2018

        Mina

        We have had this discussion and debate several times already over the past year on various forms of social media. I have pointed you towards previous submissions by the Pharmacy Guild to reviews such as the Harper Competition Policy review (in 2014 and 2015) which included; a consumer survey reflecting the preference of consumers that health professionals own their own practice and a cost benefit analysis of regulation for the broader healthcare system.

        There are fundamental benefits for health professionals owning their own practice given they are accountable to their patients and the professional board they are regulated under, rather than being accountable to shareholders.

        A link to the summary version of the Guild’s submission to the Harper Competition Policy Review is below (again) for your reference:

        https://www.guild.org.au/__data/assets/pdf_file/0017/6173/summary-of-submission-re-competition-policy-review-draft-report.pdf

        Below is a link to all of the submissions and responses undertaken by the Guild to the Harper Competition Policy review;

        https://www.guild.org.au/resources/competition-policy-review

        These submissions and responses are still relevant today.

        Anthony Tassone
        President, Pharmacy Guild of Australia (Victoria Branch)

        • M M
          15/07/2018

          Thanks for the reply Anthony,

          So do you mean that All the KPIs that we have from the pharmacy owners are not right/illegal because they serve pharmacy owners interests and not patients interests?

          Any pharmacist working at a pharmacy owned by an organisation must be following pharmacy board/AHPRA regulations, policies and laws and a premises to be given a license to be a PBS pharmacy it must meet certain criteria.

          Re: the survey that you mentioned, consumers were asked the wrong questions.

          To be honest, I am not sure what you are trying to prove here. Good luck with that.

Leave a reply