World news wrapup: 14 December 2017

‘Traditional retail pharmacy is dead’ in the US; German pharmacy sector labelled ‘rent-seeking cartel’; Chemist Warehouse, large players to ‘gobble up’ small pharmacies

US: Pharmacy is dead, according to an article in Drug Topics: and the acquisition of Aetna by CVS Health only goes to prove that it’s already happened.

This means the largest pharmacy, the third-largest pharmacy benefit manager and the third-largest insurer in the US will merge should it be permitted under antitrust legislation – which is likely, writes Nicholas Hamm for Drug Topics.

“Perhaps most significantly, the deal represents a shift in pharmacy and in its value to health care,” Mr Hamm writes.

He quotes David Balto, the former Policy Director at the FTC and current Director of the Coalition to Protect Patient Choice, who says the deal raises “serious concerns” as CVS will then be enabled to use its “gatekeeper position to prevent Aetna customers from using the pharmacy of their choice.”

CVS would also have the power to push up drug prices and increase issues around rebate schemes.

Mr Hamm writes that CVS’ intent would be to fill a market niche with wellness spaces which would include much more than pharmacy services.

“If CVS—by far the largest and most profitable pharmacy operator, and a company willing to spend $77 billion to get into the insurance world—is right, then the future of health care is integration,” he writes.

“The pharmacy of the future will no longer be only about dispensing pills, it will be about providing a variety of health services. It will be about value, rather than volume.

“Traditional retail pharmacy is dead—Amazon and others will come along to beat pharmacies on price and accessibility. The challenge for pharmacies is to add value where value is needed.”


Okotoks, Canada: A pharmacist has been charged with the theft of more than 33,000 pills, all opioids, from the Safeway Pharmacy in Okotoks, Alberta.

Royal Canadian Mounted Police in the town were contacted in October 2017 by loss prevention officers from a local Safeway, and told that a “significant” amount of narcotics had gone missing from the pharmacy.

Their investigation showed that the 33,000 tablets had been stolen over a five-year period from August 2012 to October 2017.

They charged Leanne Rogalsky with Fraud over $5000, Theft over $5000, Breach of Trust, and 15 counts of Trafficking a controlled substance, as well as 15 more offences against the Narcotics Control Regulations.

The RMCP allege that Ms Rogalsky created “fake patients” and then logged fake prescriptions under their names, then taking the drugs.

CBC News Calgary reported that Ms Rogalsky had previously admitted to previous offences regarding missing medicines at two pharmacies where she worked in 2003 and 2004, and had previously had her registration suspended by the Alberta College of Pharmacists over the matter. She had satisfied the requirements of its reinstatement by 2009 and had registered again as a pharmacist.


New Zealand: Small pharmacies are likely to be “gobbled up or amalgamated” as a result of the activities of large-scale pharmacy groups, including the entry of Chemist Warehouse to the market, one pharmacist has warned.

Following the launch of Chemist Warehouse in Auckland, Wellington pharmacist Ben Latty spoke to Radio NZ’s Nine to Noon program and warned the big players would have a significant impact.

“Eventually you’ll probably see smaller pharmacies go on and get gobbled up or amalgamated, and then you’ll probably have bigger hubs where a particular pharmacy controls a lot of meds for that particular region,” he told Nine to Noon.

Countdown supermarket pharmacies are cutting prices, and Chemist Warehouse is offering free dispensing of subsidised medicines, according to the Auckland store’s owner, and discounts of up to 50% on non-subsidised medicines.

Mr Latty warns that the big players are “essentially giving all of that away” and making up the profit in high-volume retail.

“No pharmacy can compete with the types of gross profit these guys are running on,” he said.


Germany: A consumer choice advocate has strongly criticised the country’s pharmacy sector as “protectionist and backward” due to ownership and other regulations which restrict competition.

Writing in Handelsblatt, Fred Cyrus Roeder, managing director of the Consumer Choice Center, says that “Most Europeans have convenient access to drugs (the kinds prescribed by doctors, at least) around the clock, and can order online”.

“Not so the Germans. They not only have to purchase medicine in person but also face restricted opening times, and cartel-inflated prices on top.

“This is because Germany’s pharmacists have successfully lobbied their regulators to shield themselves from modernization, and thus competition.”

He points out that German law permits pharmacists to own only up to four drugstores, and that ownership is restricted to pharmacists only; patients need to send physical prescriptions via “snail mail” in order to access online pharmacies, which are also fully owned by pharmacists.

“German law also prohibits discounts on drugs sold by pharmacies,” he writes. “That means a pharmacist cannot decide to offer his customers a better price than that mandated by the government.

“Even over-the-counter drugs such as Aspirin may only be sold by pharmacies; no Aspirin can be bought in grocery stores or supermarkets. That’s why, even though a pill of Aspirin retails for around five cents in the US, Germans pay eight times more.

“Germany’s pharmacy lobby is a successful rent-seeking cartel. Its members make an annual income of six figures on average, which comes at the expense of 82 million German patients and consumers. Germany should liberalize its pharmacy market – for the sake of most Germans.”

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