Small Pharmacies Group slams Ramsay testimony


Community pharmacists share concerns about Ramsay’s claim it will be able to offer services where it is not economically viable for others to go

Earlier this month, Ramsay Pharmacy CEO Peter Giannopoulos appeared before a panel at a Brisbane public hearing as part of Queensland’s Inquiry into the establishment of a pharmacy council and transfer of pharmacy ownership.

Mr Giannopoulos told the panel that many independent pharmacies don’t have the resources to provide the same professional services a corporate could offer.

He said the relaxation of ownership laws would allow for businesses to be viewed as an “aggregated consolidated business – which means that we would be able to have what would be marginal operations in regional areas funded by other, more robust businesses in metro areas,” Mr Giannopoulos said.

“So we’d be able to provide services across our wider network. We operate 70 hospitals across Australia; many of those are in regional towns and regional locations.

“If ownership rules were lifted, we’d be able to provide services in needed locations within rural and regional towns.”

The Small Pharmacies Group (SPG), which represents owners of approximately 300 small pharmacies around Australia, says Ramsay’s claim that it will be able to offer services where it is not economically viable for others to go is “particularly concerning”.

“Publicly listed companies are beholden to their shareholders first and foremost – it is highly unlikely that such a company would provide services where they are not financially viable,” argues Fredrik Hellqvist, co-founder of the Small Pharmacies Group and owner of a small, rural pharmacy in Dover, Tasmania.

“Community pharmacy already has excellent distribution across Australia – this has been achieved under the current ownership regulations and location rules. Other industries without such regulations have not managed to achieve this level of distribution, for example, banking, grocery and GP surgeries.”

Mr Hellqvist adds that “there is evidence from several studies that while deregulation may increase the overall number of pharmacies, new pharmacies tend to cluster in urban areas”.

Finally the Small Pharmacies Group argues that there are numerous examples in submissions to the Inquiry from community pharmacy owners of the many services pharmacies currently offer to their patients at no cost to patients.

“We do not think it is likely that this level of service would be offered by corporate owned pharmacies,” says Mr Hellqvist.

He refers to the submission of Broadwater Pharmacy owner Amin-Reza Javanmard.

Mr Javanmard says he believes any deregulation of current laws of ownership threatens the existence of independent, community-based pharmacies in Queensland, and thus threatens the community benefits.

“Under a corporate structure, the sole obligation of a company – particularly a listed company – conducting a pharmacy business is to return a profit to shareholders. There are many activities and services that my pharmacy does that perform an essential public service but would not be provided if returning a profit to shareholders was the primary concern of my business.

“The best example I can give is the dispensing of medications used to cure Hepatitis C,” says Mr Javanmard.

He explains that dispensing this medication leads to a cash flow shortfall that must be carried by the business for up to three months, which for some pharmacies is too much to bear financially.

“At present, the dispensing of these medications on the PBS is not profitable. I can guarantee that no pharmacy would agree to supply these medications under these arrangements if their only obligation was to make a profit for shareholders,” says Mr Javanmard.

Redland Bay community pharmacist Fiona Watson says she feels that allowing non-pharmacists to own pharmacies will allow “ruthless corporatisation” to override the clinical judgement of pharmacists.

“This can only be at the detriment of community health. At our pharmacy we provide a lot of services that have limited financial benefit. One of these is the opioid substitution program.

“I often hear customers tell me that the corporate pharmacy located nearby ‘can’t’ make the cream that the doctor has prescribed. This is incorrect – they choose not to make it as they consider that it doesn’t bring them enough financial remuneration. I make decisions every day that are not in my best financial interest – but are in the best interests of my patients.”

Meanwhile Mr Giannopoulos argues that as a corporate, Ramsay would be able to “support what would otherwise be marginal businesses.

“I would also see an investment in infrastructure and technology that’d support those patient journeys…

“Independent pharmacists don’t have the capacity at the moment, given the erosion of margins, given the erosion of remunerations through strategies that are designed to create sustainability.

“That’s inadvertently impacted on pharmacists’ capacity; when we’re looking at pharmacists as individual business owners, not necessarily part of groups, it hampers their ability to reinvest in those businesses.”

Mr Giannopoulos says there are independent pharmacists that have not made any active contributions or investments in their business “for many, many years”.

“That doesn’t lend itself to optimising improved community needs and meeting needs, and equally doesn’t lend itself to optimising patient outcomes as it relates to medications.”

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  1. michel ibrahim

    Ramsay, I am happy to give you my small pharmacy in Mullewa WA for free if you can maintain operation there for 5 years like I did, so you can prove to all of us that you can provide a service better than the one we did in remote Australia 🙂

  2. William

    It is a matter of commercial reality, the days of sub and uneconomic businesses are past and either government of free enterprise need to step in.

  3. Paige

    This entire article is a beat-up. Their sole issue revolves around Ramsay’s desire to turn a profit as a function of providing shareholder return. As if profitability isn’t the goal of literally every other pharmacist owner in the country. You people realize that you’re bashing the ability of the biggest private hospital company in the country to deliver health outcomes right?

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