This is Australia, not Russia: CWH


3d rendering of an old soviet flag on a dirty wall (Leyonhjelm story)

A senior Chemist Warehouse spokesperson has called for relaxation of the location rules, following mainstream media reports which were condemned by the Guild

Following Tuesday’s News Limited reports regarding the results of a recent Chemist Warehouse survey of 325 people, the Pharmacy Guild issued clarification around the Location Rules and said they ensure community pharmacies are established where a genuine need exists.

The Guild criticised an article by News Limited’s Sue Dunlevy as a “misleading shameless beat-up”.

The article cited Chemist Warehouse survey results which showed that two in three people had driven to another town to have their scripts filled more cheaply. In around 90% of these cases, the distance was greater than 50km.

Mario Tascone, chief operating officer of the My Chemist Group (which includes Chemist Warehouse) told the AJP that the group wanted to conduct research in towns where it receives a significant number of enquiries as to whether a Chemist Warehouse is planned for the vicinity.

“We’re not in those towns, and it’s not easy to get into these towns,” he said. “But we want to just see how big demand is.”

Mr Tascone said that the Guild’s response to the News Limited articles was disappointing.

“The main issue that I have with the Guild’s response to Sue Dunlevy’s article is that they’re unapologetic for Australians paying more for their medicines. That’s disgraceful,” he said.

“Of all the Australians that need help, it’s regional Australia. We’ll continue to conduct more surveys where they’ve little access to affordable medicines – research proves that the more affordable you make medicines, the better compliance is, and this brings better health care outcomes.”

He said the New Zealand model, which has looser ownership, location and discounting laws compared to Australia, offered greater benefits to patients than the Australian model.

Chemist Warehouse has opened several stores in New Zealand.

“They [the Guild] keep quoting that Australia has the best system for pharmacy, but I’ll argue that,” he said.

“We’re in New Zealand now and I reckon it’s far better than Australia: there’s relaxed ownership laws, no location laws, you can open where you like by who you like.”

He said that New Zealand patients – metropolitan and rural alike – enjoyed good access to community pharmacies.

“There’s independent pharmacies, major groups, there’s supermarkets with pharmacies and the sky hasn’t fallen in.

“In New Zealand, they’ve got cheaper co-payments. You can discount to anything you like there. And the sky hasn’t fallen in New Zealand, and I don’t know why we have to keep pulling out these arguments that the laws here are to the benefit of the community.

“They do nothing to serve new graduates who are dissatisfied with pharmacy, that want to be owners of pharmacies,” Mr Tascone said.

“They’ve got a very hard path to becoming an owner, with inflated pharmacy prices – no pharmacist can afford a million, $2 million when they graduate.

“If we didn’t have these laws they could set up their own shop from scratch and ply their trade. This is why there’s no innovation in pharmacy, and that’s sad

“The location rules need to change. We need to see innovation, and that’s never going to happen the way it is.”

He criticised the Guild for making significant donations to all sides of politics, including the donations to One Nation (which were payment for attendance at party events) which attracted controversy earlier this year.

However, he said that the Guild’s recent proposal to reduce the cost of script co-payments for all patients had some merit.

“We sort of agree with that $1 discount. It sounds like a good idea, but until that happens, the optional discount is there.

“This is Australia, not Russia. I want to be able to discount whatever I like, and if I want to give away scripts for free, it should be that there’s no law that says I can’t do this.

“Let’s make medicines affordable for more Australians. That leads to better compliance rates.”

Related:

Guild hits back at location rules ‘beat-up’

Previous Guild hits back at location rules ‘beat-up’
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15 Comments

  1. Tim Hewitt
    19/06/2019

    Australian ownership and location rules have allowed Mr Tascone and his mates on the CWH politburo to become some of the richest people in this country .. they call them oligarchs in Russia..
    It’s pretty cynical that now he wants to change ‘the rules’ because he feels safe on his pile of cash. Anyway, he can BUY any pharmacy in any town in Australia he wants!! so whats the problem!!
    you can have mine at the right price!
    The markets of America and Europe (and probably Russia) are there for the picking.. go get ’em Tony!
    If New Zealand i so good, why not move there..??
    Proshchay…

  2. Angelica Rostov
    19/06/2019

    I was deeply upset when I was reading a Mario Tascone comment “This is Australia, not Russia. I want
    to be able to discount whatever I like, and if I want to give away scripts for free, it should be that there’s no law that says I can’t do this”.
    What did you mean buy this Mr. Tascone? First of all, every county has different economical,
    medical, pharmaceutical system and it would be nice not to compare countries in
    such a disgraceful manner.
    Secondly, have you been in the pharmaceutical industry in Russia yourself to make the
    comment like that?
    I am an Australian pharmacist with a Russian background. I had my own pharmacy
    and the wholesaler back in Russia. I always tried to negotiate the price with a
    big suppliers in order to my customers had a better price. And no one dictated me
    how much discount I could or not do. So I really do not understand that comment or why you would even say such a comment.
    And, by the way, I paid my pharmacists good salary.
    We live in multicultural county. And we have Australian pharmacists with different
    background. It would be nice not to talk disgraceful regarding other counties. It would be nice to have an apology from Mr. Tascone for his racist and degrading comment regarding Russia.
    Angelica Rostov
    BPharm, GradDipClinPharm, MPS, AACPA, CDE, MADEA

  3. United we stand
    20/06/2019

    Mario please do tell how $28/hr script monkeys can save up for a deposit. I hear you’re good with money.
    Don’t play with young pharmacists emotions by giving them false hope, when the only winner in this game will be big boys with very deep pockets.
    Absolutely shameless

    • Michael Khoo
      02/07/2019

      Pharmacies have not increased in value in over 20 years. Houses on the other hand have more than doubled. I would argue it is impossible to finance a pharmacy without the security of a residential mortgage, or two. I would contend that pre-existing exposure to the risks of community pharmacy, such as owning another pharmacy, is more likely to be an impediment to securing finance in current times. The few banks that will finance a pharmacy will not lend to those who lack the financial fortitude to sustain a low margin long game investment. In a way they are protecting your “young pharmacists” from themselves. There is no conspiracy, just common sense.

      • Michael Post
        03/07/2019

        You describe a broken system Michael. Innovation is lost, the rich control a health field and the average pharmacist faces perpetual employee status. This system is ripe for disruption in the form of location rules removal.

        • Jarrod McMaugh
          03/07/2019

          not that I support the removal of location rules, but this isn’t how disruption works.

          Disruption is finding a way to utilise existing rules/regulations (or what they don’t cover) to gain an advantage.

          Uber did this by not technically needing a taxi licence until it was “too late” and they had gained notoriety.

          Disruption in the context of location rules has already occurred IMHO.

          • Michael Post
            03/07/2019

            Disruption can take any form Jarrod. It is not limited to existing rules/regulations.
            If pharmacy is now relegated to majority ownership by the 1% it was not the intention of the initial location rules in line with the first PBS.
            Rules that serve to inhibit innovation and impair the ability of communities to choose their preferred pharmacist or service model must be addressed .
            Imho if rules are relaxed or removed CW will be the biggest loser – pharmacists will have greater choice in their employment and unless CW substantially increase remuneration their workforce will disappear .
            Having said all this the rules are very unlikely to change -vested interests and lack of political will shall maintain the status quo.
            Location rules are still effectively intact with minimal disruption from Section 90 owners themselves.
            The latest I have seen is a pharmacy setting up a private chemist in a nursing home and packing onsite claiming third party packing arrangements there through a different structure. It is not a stretch to imagine scripts are supplied directly to walk ins and where applicable claimed at the section 90 a couple KMs down the road although I have no first person evidence for this . The pharmacists involved are using existing rules here to circumvent the spirit of the rules and this degrades the goodwill value prospective owners and banks place on Section 90 approvals in line with location rules.

          • Jarrod McMaugh
            03/07/2019

            Michael, I think you may be confusing ownership rules with location rules.

            Location rules – if removed – won’t make it easier for any person to own a pharmacy that can’t own one now.

          • Michael Post
            03/07/2019

            I am not confused at all!

            Location rules removal will make ownership much easier. In fact by definition location rule removal will make ownership simple . Saying location rule removal will not make ownership easier for current non owners is akin to saying removal of border patrol and barriers at the US- Mexico border won’t make access to the US easier for south American migrants. It is obvious that in both cases removal of a barrier that people want to cross yet cannot is the ultimate barrier – everything else is straight forward and in the case of pharmacy – cheap.

            Let’s agree to disagree .

          • Jarrod McMaugh
            03/07/2019

            Here’s my caveat….

            Removing location rules right now would not make pharmacies easier to purchase for someone who is not in ownership now; but it would make opening a new pharmacy/buying out existing ones easier for those already in the market.

            If we were starting from a level playing field, I would agree with you.

          • Michael Post
            03/07/2019

            I strongly disagree but neither of us can accurately predict the outcome – the real decisive outcome would depend on wholesaler support for new and existing clientele.
            The reason pharmacies have goodwill is predominately location rules. Remove rules and current mortgage on a pharmacy will be dead weight on existing owners placing them at disadvantage compared to new low cost entry owners.
            This is all hypothetical because for better or worse nothing is going to change in our economic and political climate.

          • TALL POPPY
            04/07/2019

            Location rules definitely need to be softened as they are overly protectionist. Period. However, Jarrod does have a point that removal *could* favour existing owners, as they are generally the most well-connected. However it would not benefit their capital values and would technically make 100% ownership access to younger pharmacists much easier. Note that I do NOT recommend junior partnerships in most cases where a junior partner does 99% of the work for 20% of the profit.
            The current location rules are a massive impasse to pharmacists who wish to be owners. And quite rightly SHOULD be owners in many cases. So much so that many that are in the process of or planning to leave the profession!
            Michael Post I think your points hold substantial weight and are indeed, in theory, correct.

          • Paul Sapardanis
            05/07/2019

            Problem is ownership rules NOT location rules. If location rules were to be removed it would mean current groups that have shady ownership arrangements would open up everywhere that would be profitable to do so. Regulators have failed in not investigating these groups to ensure that the relevant state legislation on who can own a pharmacy is being met. Note it more than the obvious one that behaves in this manner. All that would happen is current non owners would open up non profitable pharmacies that are doomed to fail. We need to get to a model where an employee pharmacist is bettrr remunerated than is currently the situation as rolling back the current ownership situation maybe futile.

        • Michael Khoo
          04/07/2019

          Very Broken, but I would not take the advice of those who broke it and seek to gain from the loss of location rules. Consider what happened in Norway. Several Hundred well dispersed independent pharmacies congealed into 5 banner groups concentrated in major population centers only, often within a block of each other, when they deregulated both location and ownership. I believe the Norwegians had to pass laws to allow prescriptions to be picked up from petrol stations. I don’t recall the statistics clearly, but the mean distance between dispensaries fell from over 30km to less than 800m, and ownership fell to less than 10 licensed owners. How is that for disruption!

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