By Melissa Hodd, Manager, Advocacy
Foodstuffs (NZ) Ltd
Changes to pharmacy ownership rules are in the pipeline and the law change is well overdue.
The Medicines Act 1981 is to be repealed and replaced with an entirely new Therapeutic Products Act. This will modernise the rules around the registration, classification, management, and dispensing of medicines.
As part of the changes, Cabinet has approved the removal of current restrictions on pharmacy ownership, allowing other businesses, including supermarkets, the opportunity to own pharmacies outright. The move will improve competition in the sector and encourage greater innovation.
Up until the early 2000s pharmacies could only operate under the full ownership of a pharmacist. Back then an open ownership model was proposed by the former Labour Government but it backed down in the face of the pharmacy profession’s scaremongering about public safety being jeopardised.
Instead, partial reform occurred in 2003 so that a pharmacist does not have to own all the shares in a pharmacy business, but rather must have a controlling interest of at least 51%. This shared ownership model and other restrictions have made it relatively unattractive for other businesses to enter the pharmacy market.
Foodstuffs has long been an advocate for change. Open ownership will provide better outcomes for consumers. There will be more pharmacies across a wider geographic area; more of them will have extended opening hours; and we will see more competitive pricing for pharmacy-only medicines.
This all adds up to greater and more equitable public access to this important health service. New ownership models and new pharmacy formats will lead to greater efficiency and innovation in the sector. There will be more career options for pharmacists and they will be able to focus on assisting customers with their health needs – freed from the responsibility of shop keeping.
Open ownership will not affect standards of care or the safety of pharmacy services. Pharmacies will continue to be licenced and there will be rules for the regulator to bar unsuitable licensees. Each pharmacy will operate under the supervision and management of a registered pharmacist. Individual pharmacists will be bound by professional standards and be subject to disciplinary processes for unprofessional conduct. The Ministry of Health will maintain oversight and have appropriate enforcement powers.
Open ownership can and does work. Developed countries that successfully operate this system include the UK, most of the Canadian territories, and virtually all the states in the USA. The Australian Productivity Commission recommended a move to open ownership in 2015, however individual States have yet to act on this. By moving to a model of open ownership, New Zealand is only catching up with other similar economies.
While the Government proposal is a big step forward, there is still a long way to go. An exposure draft of legislation is to be released later this year, but law-making processes move slowly. After public consultation, a fine-tuned Bill will be introduced in Parliament where it will go to Select Committee for a further round of public consultation. These processes take time and there is likely to be opposition along the way, but at last we’re moving in the right direction.