Commerce Commission Decision Supported By Linwood Community

Media Release 30 January 2013

Commerce Commission Decision Supported By Linwood Community Pharmacy

A decision by the Commerce Commission and quick action by DHB’s that will benefit communities is being applauded by the Linwood Community Pharmacy in Christchurch.

An investigation by the Commerce Commission into claims that clauses in the Community Pharmacy Services Agreement (CPSA) substantially lessen competition in the market, has resulted in a DHB variation to the original contracts being signed by pharmacies around the country.

In a letter sent to DHB’s in December last year, the Commerce Commission said their Commerce Act division’s “strongly held view” was that clauses M1.3 (No offering of an inducement or reward to an eligible person) and clause H4. (compulsory charging of full co-payment i.e.$5) were “likely to have the purpose, effect or likely effect of substantially lessening competition in the community pharmacy dispensary services market.

Joe Tiller of the Linwood Community Pharmacy is hugely relieved with the Commerce Commission’s view because it means they can continue to offer discounted prescription prices to the high needs population.

“It would have been extremely disappointing if we had been forced by the new contract to increase our prescription co-payment charges. We applaud the Commission’s decision as it has specifically highlighted the effects the contract may have had in lower socio economic areas where patients might forgo their medication or other necessities if the co-payment is not able to be discounted,” says Joe Tiller.

“We welcome the speedy action and communication from the DHB’s to put this right for those who are most vulnerable in our communities,” says pharmacist Ann Tiller.

Joe and Ann Tiller opened the Linwood Community Pharmacy two years ago with lower costs, to help those on limited budgets. They charge no more than $3 per prescription item despite prescription fees recently having increased around the country to $5 per item. When they opened two years ago, the prescription fee was $1.50 instead of $3 charged elsewhere.

“People who had reached their limit of 20 items and were no longer having to pay for prescriptions, will have to start paying the new fee of $5 per item from the end of this week. Our customers though, will be paying less,” says Ann Tiller. “We set the pharmacy up to enable and encourage access for those who can least afford it.”

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