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Fears for future of community pharmacies

Community pharmacies fear for their financial future from the rise of “discount” operators such as the new Countdown supermarket to open in Gisborne this week.

The supermarket, which opens on Thursday, will have an in-store pharmacy that will offer free prescriptions among its services.

Gisborne community pharmacies outlined their concerns in a letter to district health Hauora Tairawhiti and unsuccessfully asked that a local contracting policy introduce “transparent criteria”, such as evidence of an existing unmet service need that new pharmacies must meet in order to obtain a contract.

The health board did not reply to The Gisborne Herald inquiries but Countdown confirmed that its pharmacy will not impose the standard $5 prescription charge.

Countdown's head pharmacist Jeremy Armes said its Gisborne pharmacy would offer free prescriptions and fully-trained, on-site specialist pharmacist advice and a broad range of health and wellbeing products.

“Countdown has 34 pharmacies in our stores across the country, as well as online, and we're really pleased to be able to provide this new service in Gisborne as part of our new store,” he said.

Community pharmacies, however, fear they could be affected in the same way as small local retailers had been by big-box retailers — potentially having to reduce services and staffing levels, or ultimately closing their doors.

They do not have the volume or bulk purchasing power enjoyed by discount pharmacies to allow them to compete with non-pharmaceutical retail products that provide wider margins for the retailer.

A Gisborne community pharmacy spokesman said the Pharmacy Guild of New Zealand, which represents over 650 pharmacies nationwide, had recently met with Health Minister Andrew Little to discuss key issues.

“The predominant focus was, however, to stress that the value of community pharmacy's role is in real danger from pressing business financial viability and professional workforce sustainability challenges.

“Financial pressures have been driven by a lack of recognition of cost pressures facing community pharmacy services over a decade due to health board deficits and financial pressure when discount pharmacy chains open nearby,” the spokesman said.

“A growing number of these pharmacies are losing market share to the big retail chains, leading to smaller pharmacies cutting services and opening hours, discounter chains waiving the $5 government co-payment for commercial gain and the Covid-19 pandemic, which reduced retail sales and increased costs.”

The $5 prescription charge (known as a co-payment) is not income for pharmacists, as many people think, but is taken off their government funding.

Pharmacy Guild of New Zealand chief executive Andrew Gaudin said he had seen independently-owned-and-operated pharmacies reduce hours and staff, and in some cases close altogether.

The Gisborne community pharmacy spokesman said they were locally-owned health professionals committed to their community and to providing quality professional healthcare.

Mr Armes said that wherever they were located, “Countdown Pharmacy aims to make healthcare more affordable and accessible for New Zealanders and feedback from our customers has been overwhelmingly positive”.