Pakuranga pharmacist Vicky Chan says government funding has not kept pace with other costs and she has to work harder to keep her business viable by offering extra government-funded services such as sleep clinics. Photo: Sharon Brettkelly
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In less than 10 years, nearly 100 Chemist Warehouses and Bargain Chemists have opened across the country – so where does that leave local pharmacies?
New 12-month prescription rules came into force this weekend, saving time and cutting GP visits for patients – but community pharmacists warn they are the latest in a raft of changes in a sector that is struggling to survive.
The rules mean that people with long-term, stable conditions can now get prescriptions of up to a year from their prescriber, which the government says could save up to $105 in GP fees annually.
Pakuranga pharmacist Vicky Chan says the change has no financial impact on her business but it adds to the hours of unseen, unpaid work she and other community pharmacists do.
“There will be more clinical responsibilities to make sure their health circumstances haven’t changed and that’s almost on us, the community pharmacist,” she says.
Chan, a member of the Independent Community Pharmacy Group, says government funding has not kept pace with other costs and she has to work harder to keep her business viable by offering extra government-funded services such as sleep clinics.
She is looking at buying a $100,000 pill-counting robot for her Auckland pharmacy but she worries that her business may not be able to support the investment in the future, given the threat of increased competition from discount pharmacy chains.
“In east Auckland we have seen another local pharmacy closed three months ago and there will be another closing at the end of the month. If you look at the numbers of pharmacy closures, I think we’re almost 100 community pharmacies down from 2020.
“There are a lot of workforce pressures, smaller operators are finding it harder to recruit and retain, there’s the burnout after the covid response, we did see a lot of people leave the profession.
“The funding hasn’t been recalibrated in a way that fits the model now.”
Chan says she spends a lot of time on tasks that make no money because she wants to do the best for her customers, some of whom are third generation.
A study by University of Otago in 2021 found that unfunded customer services comprise a significant share – between 15 and 50 percent – of a pharmacist’s daily activities, requiring cross-subsidisation using revenue from other activities like dispensing or retail sales.
“I think a lot of work we do is invisible, that has helped reduce pressures on the GP, but also reduced ED (emergency department) admissions because we were able to pick those things up early, because we have that relationship with our patients,” Chan says.
Wainuiomata pharmacist Clive Cannons says people can come in to ask for a free diagnosis on an ailment or treatment, but there is nothing to stop them going elsewhere to buy the medicine if they think they can get it cheaper online or at a discount pharmacy.
He gets emotional when he talks about the threat to the 1000-odd community pharmacies around the country.
“I’m very worried,” says Cannons, chair of the community pharmacy group.
“We’ve lost our local GPs, we’ve lost those things that hold communities together and the last bastion is the local pharmacy.”
He admits that not all local pharmacies offer a top quality service and the sector needs to help itself to adjust to the growing competition from Chemist Warehouse and Bargain Chemist.
“However, there is a need for that high-service model where the owner knows their community,” he says.
Cannons’ group is calling for country-wide consistency in the way Health NZ grants contracts under the National Pharmacy Agreement.
In his Hutt Valley region he says new pharmacies can only get an agreement if the local funders consider there is a need. In other regions agreements are more accessible but that leads to oversupply.
He calls Pukekohe, on the southern edge of Auckland, “ground zero”. With a population of around 28,000, it has 13 pharmacies clustered in a high-volume area. Other parts of Auckland are also oversupplied, and many community pharmacies are struggling to break even.
Cannons’ group is also fighting industry deregulation proposals that would open up the pharmacies to non-pharmacists by removing the Effective Control Principles. Under those rules, pharmacies have to be more than 50 percent owned by pharmacists.
The associate health minister Casey Costello says deregulation will enable different models for pharmacy ownership, “allowing for more innovative and integrated healthcare that will improve safe access to medicines”.
A supporter of deregulation, Dr Eric Crampton of the think tank NZ Initiative, wrote last year that the existing ownership rules protect pharmacies, calling it an “odd little regulatory cartel”.
He cited a Ministry of Health report that it has not seen any clear evidence that the ownership restrictions contribute to patient safety or service quality.
Cannons disagrees.
“The questions is, what do the people of New Zealand want? What sort of pharmacy industry does the man on the street want. If they want us to go like America then that’s exactly what’s going to happen.”
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