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Why Plans To Deregulate Pharmacies Must Be Stopped

Opinion piece on pharmacy deregulation
01 May 2002
Sue Kedgley, Green Party Health spokesperson

Why Gov't Plans To Deregulate Pharmacies Must Be Stopped

New Zealand's 1000 or so pharmacies, which are all owned and operated by New Zealand pharmacists, are under threat. Pharmacies are one of the last surviving community-based services in many smaller communities which have seen their local bank and post-office pushed out by deregulation, profit-seeking and competition.

But the Government now wants to deregulate pharmacies too and allow supermarket-style pharmacy chains to open up in New Zealand. I think it's an absurd idea, and so does the Pharmacy Guild, which represents 85 percent of pharmacists and is campaigning strongly against the proposal.

At present only pharmacists can own pharmacies. That means only trained health care professionals, with a very strong interest in maintaining their personal and ethical reputation, can own and run pharmacies.

Under the present arrangements, pharmacists have a real incentive to distribute pharmaceuticals (over the counter and prescription) ethically and offer good advice. Many pharmacists go out of their way to help customers, and they build up a good level of trust and communication with clients over many years.

My own parents, for example, have dealt with the same pharmacist in Hataitai for more then two decades, and greatly appreciate his advice and expertise. Like them, many people rely on their pharmacists for support and one-on-one advice. Pharmacies are usually quiet places, too, where it is possible to have a relatively private conversation if you want to discuss a sensitive health condition with a pharmacist.

Under deregulation, all that would change. Many community pharmacists would be replaced by multinational pharmacy chains. Anyone that has travelled to Britain will be familiar with the pharmacy chain Boots. Found in prime High Street locations, they sell everything from sandwiches to cosmetics and are staffed by checkout girls fresh out of school. They're great if you're a fit, healthy businesswoman wanting a pair of pantyhose in a hurry. They're not so great if you're an older person with minor health niggles, or a young mother worried about a baby's rash and you need some advice.

Deregulation of pharmacies would pave the way for these types of chain pharmacies to open up here. The Green Party is strongly against the proposal, not only because we think it would inevitably result in a commercial rather than a healthcare ethic dominating pharmacy's, but also because we don't want to see the profits taken out of the community and sent overseas. Local pharmacists are not only part of the community, they also funnel money back into the community to help keep other businesses healthy.

It's true that community-owned pharmacies won't be forced to close right away. The problem will be that they will have to compete against chains with much greater access to funds, who can undercut other pharmacies in the short term and ultimately force them out of business. The focus of the pharmacy chains will be how to make as much money as possible rather than how to look after people's health. Slowly but surely the community-owned pharmacies will be pushed out of the profitable areas, as has happened in Britain and America, and a health based ethic will be replaced with a commercial ethic.

The government says this will result in more competition. But overtime, I predict, a small number of multinational pharmacy chains will come to dominate the New Zealand market, reducing rather than increasing competition.

Allowing pharmacy chains to dominate New Zealand is unlikely to lower the cost of most drugs, either, because most pharmaceuticals are subsidised by government. The subsidy won't change whether they are sold in a community-based pharmacy or a larger chain.

You would think after the deregulation and privatisation fiascos of the 1980's and 1990's that we would have learnt by now that it's not the way to go. Look at our rail service, our banking and our electricity industries. Not too many happy customers there.

Australia recently spent 18 months researching an identical proposal to deregulate pharmacies, and concluded that, overall, there were net benefits from retaining pharmacies in the hands of local pharmacists. The Australian Government rejected the option of deregulation and considers the matter settled.

The New Zealand Government has no good reason to welcome the overseas corporates into our pharmacies. We have a fully functioning pharmaceutical industry now - owned by New Zealanders and looking after New Zealanders. Let's make sure it stays that way.


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