Pharmacy services don’t belong in aisle six: Tassone

view from supermarket shopping trolley

Supermarkets are only interested in the most profitable areas of pharmacy, one sector leader has warned, as marketing experts write in favour of deregulation

In a piece in The Conversation, Queensland University of Technology Professor of Marketing and Consumer Behaviour Gary Mortimer, and University of Tasmania Lecturer in Retail Marketing Louise Grimmer take a look at the concept of supermarket pharmacies and whether they would deliver better service to patients than the traditional community pharmacy model.

The piece is the latest in a series of mainstream media articles examining the issue of deregulation, following calls from Chemist Warehouse’s Mario Tascone, the Australasian Association of Convenience Stores’ Jeff Rogut and former ACCC chief Graeme Samuels to relax or scrap the ownership and location rules.

“On the way home, you wander into the supermarket for a loaf of bread. But before you reach the bread aisle, you drop in your prescription at the supermarket pharmacy. Shopping done, you pick up your pills on the way out,” Dr Mortimer and Dr Grimmer write.

“Across the US, UK and mainland Europe, supermarket pharmacies are becoming the norm. But in Australia, they’re banned.”

In their article, the two explore whether pharmacies in supermarkets could be an option for Australia – whether via “straight-out ownership,” where a supermarket owns a pharmacy group and pharmacists are their employees; or via a “strategic alliance, where a pharmacy chain, like Chemist Warehouse, has smaller versions of its stores inside a supermarket”.

They give Sainsbury’s in the UK and Walmart in the US as examples of “straight-out ownership”.

Walmart has recently laid off around 3% of its pharmacy staff in the US, nearly half of whom were senior staff.

Dr Mortimer and Dr Grimmer give the example of the agreement between Boots in the UK and the Waitrose supermarket chain, who in 2019 made an agreement to stock each others’ products.

“Boots supplied health care, pharmaceutical products and services, like flu jabs and medical check-ups to Waitrose, and Waitrose supplied food to Boots,” they write. “Pharmacies in 13 Waitrose stores were also re-branded ‘Boots Pharmacy’.”

Boots has also been closing a significant number of stores in the UK.

The authors note that “European countries seem to be moving towards deregulation”.

They write that following deregulation in the UK, pharmacies were able to operate more efficiently, but that in countries such as Spain which retained stronger regulations, access to the stores improved, “as new pharmacies were opened based on geographic, demographic or needs-based criteria”.

They conclude that if supermarkets were able to guarantee certain controls, such as staff training, safeguards for equitable access by older people, Aboriginal and Torres Strait Islander people and those in rural and remote areas, as well as safeguards on the quality use of medicines, “it would be hard to argue for existing rules about pharmacy ownership and location”.

Anthony Tassone, president of the Pharmacy Guild’s Victorian branch, told the AJP that supermarket pharmacies would likely result in a reduction of services.

“Modern community pharmacies, owned by pharmacists, are part of the primary health system, performing a whole range of roles including medication management, advice, health screening, vaccination and other professional pharmacy services which do not belong in aisle six of a supermarket,” he said.

“Some people argue that supermarkets want to have pharmacies, but in truth the supermarkets are only really interested in the most profitable parts of pharmacies – not the full range of services provided by community pharmacies.

“The trouble is, if supermarkets were allowed to cherry-pick what they may believe are more lucrative parts of pharmacy the local pharmacy performing all of those additional services (such as dose administration aids, medication checks, wound care, blood pressure testing, opioid replacement therapy etc) would become economically unviable, and close.

“In other words, the impact of supermarket pharmacies would be the loss of services for patients.”

He said that there was a false assumption amongst the community that medicines would be cheaper for patients if they were able to be accessed in supermarkets.

However, “90% of the subsidised PBS prescriptions dispensed in Australia each year go to pensioners and concession cardholders – who pay either $6.50 or as little as $5.50 if the optional pharmacy-funded discount is applied,” Mr Tassone said.

“That wouldn’t change – supermarkets would be required by law charge those pensioners and concession cardholders the same amount.  When it comes to prescription medicines, community pharmacies are largely price takers not price makers.”

He cited the 2015 CHOICE survey in which the prices of a range of unscheduled OTC medicines in supermarkets were compared with the same drugs in pharmacies.

“It concluded that ‘In general, pharmacies equalled or beat supermarkets on price when comparing brand for brand, and with larger pack sizes available in pharmacies, the price per dose was even cheaper’,” Mr Tassone said.

“This helps demonstrate the significant amount of competition amongst the 5700-plus community pharmacies across Australia owned by over 4,000 individual proprietors delivers value to the Australian public. 

“Compare this to the duopoly that we see in deregulated industries like supermarkets. Hasn’t it been enough that supermarkets have wiped out the choice the Australian community has for other services and businesses including; butchers, newsagents and petrol stations?”

Mr Tassone said the location rules mean that 87% of Australians live within 2.5km of a pharmacy.

“Combined with many pharmacies operating extended hours and over weekends, the Australian public already enjoys vast and equitable access to a highly trusted health care professional via a community pharmacy model they are largely satisfied with – and supermarkets may not necessarily substantively improve any further access.

“Supermarkets are large corporate players who must put their shareholders and their profit ahead of all other considerations.  

“Pharmacists put their patients first and are accountable to them as part of their registration to practice. Under our current legislation and professional guidelines, the responsibilities on pharmacists as proprietors imposes a level of accountability and risk on the pharmacy owner which would not be borne by a corporate entity.

“If a pharmacy owner does the wrong thing, they may be de-registered and lose their business, and possibly any other assets that are secured against it.

“And then there’s the big supermarket reliance on alcohol and cigarette sales. Is it a positive step to be having PBS prescription medicines dispensed next to the cigarette and alcohol counters?

“Whilst other jurisdictions like the United States have long had deregulation of pharmacy ownership, they are hardly a leading or shining example of what we should be striving for as a healthcare system for our patients and community.”

Read the piece in The Conversation here.

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