MP Queries Discount Pharmacy Model

Posted on

Wednesday 13 April 2022, 02:50 AM
2 minutes to Read

Labour MP Tracey McLellan intends to advance conversations with officials about script fees [Image: Supplied]

Pharmacy Today reporter Paulette Crowley finds some political interest in the practice of large pharmacies providing free prescriptions to consumers, as the practice impacts on the wider pharmacy sector.

The “predatory” business model used by discount pharmacy chains is being looked into by an MP
after being alerted to the issue by a fellow MP Australian-based Countdown and Chemist Warehouse, along with New Zealand-owned Bargain Chemist, absorb the $5 prescription co-payment charge, often to the detriment of surrounding independent pharmacies.
Tracey McLellan, the Labour MP for Banks Peninsula who sits on the Government’s health select committee, told Pharmacy Today she is talking to pharmacists about their concerns after Wigram MP Megan Woods alerted her to the issue.
Dr McLellan says she is aware of pharmacies being forced to close after discounters in their area
“Some pharmacists have also told me that the discounters are doing all of the easy scripts and
leaving all of the complicated ones for community pharmacists to do.
“It does seem like a predatory business model.”
14/04/2022, 15:57 MP queries discount pharmacy model | New Zealand Doctor 3/6
However, Chemist Warehouse chief executive Azman Haroon says his pharmacies fill all prescriptions presented in their stores.
“There may be times during an out-of-stock situation or a prescription item that may take longer
to source or prepare, that we offer the patient an option of coming back,
” he says in an email.
He adds that Chemist Warehouse pharmacies will continue to absorb the $5 co-payment to “make
healthcare more affordable and accessible for all Kiwis”.
Bargain Chemist director Atif Malkonyan says their pharmacists endeavour to fill every prescription,
unless raw ingredients are un-procurable. Then they would refer the prescription to another pharmacy
able to help.
“We do not pick and choose the easy ones, as every patient is important to us, ” he told Pharmacy Today
by email.

14/04/2022, 15:57 MP queries discount pharmacy model | New Zealand Doctor 4/6

All 39 Countdown Pharmacies offer “free prescriptions” after others in the market did this first, Jeremy Armes, Countdown’s merchandise manager – pharmacy told Pharmacy Today in an email.
Mr Armes says Countdown Pharmacies take contractual obligations under the Integrated Community Pharmacy Services Agreement very seriously and have never engaged in the “cherrypicking” practice. However, he adds, some dispensing decisions may come down to human nature.
“We wouldn’t condone the behaviour at Countdown Pharmacy, but some people will always be drawn to
completing easier tasks and let others complete the more difficult.”
Dr McLellan says, although she’s not working on anything specific to prompt government intervention on the co-payment issue, she intends to advance conversations with officials and continue to talk with community pharmacists.
“All change starts with a discussion.”

Cabinet minister Dr Woods alerted Dr McLellan to the discounters’ practices after asking Christchurch
pharmacist Des Bailey, president of the Pharmacy Guild of New Zealand, about it.
Mr Bailey says Dr Woods raised the discounter issue after asking about workforce burnout when she was
on a constituency visit to his pharmacy in late February.
The Selwyn Village Pharmacy owner says he welcomed the interest from a Cabinet minister and Dr McLellan, and hopes the issue will be picked up from a political angle, rather than a financial one.
The Commerce Commission told Pharmacy Today in 2019 that it didn’t consider the discounters had
predatory pricing as they didn’t have “substantial market power”. The body considered the practice of
free scripts to be greater competition, and wouldn’t look at the matter further, senior communications
adviser Christian Bonnevie said.

This followed Wellington pharmacists Angela Liu and Andrew Irvin complaining to the commission
about anti-competitive behaviour on the part of discounters.

Mr Bailey tells Pharmacy Today: “It sends an ambiguous signal to the consumers when somebody’s charging $5 and somebody’s not.”
“Really, the discounters are manipulating that co-payment to get you into the store to buy a whole
lot of other stuff. If we’re going to have one Health New Zealand and all the 20 DHB’s gone, it would
make sense that we’re all operating off the same platform.”
Mr Bailey adds the co-payment issue exacerbates inequity for people who don’t have access to free
prescriptions in their area.

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