Mob rules

Tuesday 1st May 2001

How chemists are keeping out the Mongrel Mob

So, you believed ex-reformist finance minister Roger Douglas when he said New Zealand was pretty much deregulated - if you ignore the odd well-debated agricultural monopoly here or 5% import duty there. Then you'll be astonished to learn that the pharmacy industry is governed by a set of laws as illogical in our free market economy as they are arcane. Look at these rules, unchanged since the 1954 Pharmacy Amendment Act:

Only pharmacists can own pharmacies. We're not talking dispensing drugs here, though only pharmacists can do that too, but actually owning the business - or more than 25% of it, at least.
Pharmacists can only own one pharmacy each. Chains like Unichem are purely marketing and buying groups, with individual pharmacists as owner-operators.

These pharmacy ownership rules were introduced in the 1950s as protection for pharmacists, who were concerned that companies like UK-based Boots the Chemist would get a foothold in New Zealand and take their customers away. (A Boots representative told there was no business case for coming here anyway, but never mind.) Meanwhile, although most other retail or manufacturing-based protection regulation has been scrapped, the 3000 or so practising pharmacists (who between them receive $700 million a year from government coffers) have managed to persuade successive governments not to change the rules. This prevents the really good pharmacists making a killing by buying and running other stores, and prevents supermarkets and chains like The Warehouse getting into the pharmacy trade.

The Pharmacy Society argues that consumers get a better deal under these regulations, though it's a hard argument to justify. There's nothing to suggest that the Boots chain provides worse service or patient care than your local New Zealand pharmacy. In fact, a recent government-funded study showed that our pharmacists aren't necessarily paragons of professionalism. When mystery shoppers visited 180 pharmacies to buy two restricted medicines, almost 20% of pharmacies failed to ask the questions they are supposed to. Ownership regulation also prevents big competition and the sort of efficiencies of scale that ought to provide savings to customers. (Compounding the nonsense is that the rules don't apply to urgent pharmacies, the sort that only dispense drugs in the middle of the night. Figure that one out.)

If consumers aren't getting a better deal, given nearly 20 years of reformist zeal in New Zealand and lobbying from supermarkets and others, the industry must have a killer argument against deregulation, right?

Right. Now don't laugh - this argument is for real, quoted by no less than three Unlimited sources, including a representative of the Health Minister and the head of the highly respected Pharmaceutical Society of New Zealand. Deregulation of pharmacy ownership, they say, equals open slather, which in turn equals Mongrel Mob members being able to buy up pharmacies and help themselves to drugs. Yes, they actually mention the Mongrel Mob.

A sensible argument? Quite apart from the fact that the ethical operation of any pharmacy, Mongrel Mob-owned or not, would presumably remain in the hands of a pharmacist, even the experts say there isn't anything stopping a gang member from training as a pharmacist (though they may have a little trouble registering with the Pharmaceutical Society if they have a criminal conviction under their belt). And are New Zealand pharmacists really suggesting that the UK's Boots chain is in danger of being infiltrated by gang drug-lords, to the detriment of patient care?

No, to Unlimited it looks like this is protection, pure and simple.

Is this outdated regime set to change, as the government's Health Professional Competency Assurance legislation, due in April 2002, repeals a plethora of legislation relating to the primary health sector? Doesn't look like it. Both government and pharmacist lobbyists say that there are more important issues at stake, and they don't want to compromise useful discussion on how to improve patient health with endless arguments about barriers to pharmacy ownership.

Sorry, Mongrel Mob, but it's back to the pharmacy textbooks.

Nikki Mandow
nikki@unlimited.net.nz

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Mob rules

Comments from our readers

Add your comment:

Related News: