Local chemists fight uphill battle against arrival of superstores

The winds of competition are blowing through the pharmacy sector, but Pharmaceutical Union president Richard Collis believes they bode ill for the customer, writes Conor Lally

Mr Richard Collis is not a happy man. As the new president of the Irish Pharmaceutical Union (IPU) the Dublin pharmacist finds himself battling against the introduction into the State of what he terms supermarket style "wrap and pack" super-chemists where drugs are sold like groceries without the in-store advice given by Irish pharmacists.

He believes such stores, which thrive in the UK and US, will begin to take hold here now that the industry in Ireland has been deregulated. But it is not too late to influence Irish policy-makers and convince them the US and UK routes are far from best practice. But in lobbying against what he sees as the ills of the deregulation, he cuts a very lonely figure indeed.

In January, while the Pharmacy Review Group was midway through reviewing the rules governing pharmacies, the Minister for Health, Mr Martin, said the sector would be deregulated.

The regulations, introduced in 1996, restricted the freedom to set up new pharmacies. A health board could refuse permission for a pharmacy if it believed the viability of an existing pharmacy would be endangered. The IPU claims the restriction prevented big chains from taking over the retail pharmacy sector.

The Competition Authority has welcomed deregulation. It argues Irish pharmacists have had it too good for too long and that the rescinded restrictions were "deeply anti-competitive". Under the new regime, they say, customers will be able to choose between attending a traditional quality pharmacy run by an individual pharmacist or opt for a more cost-driven no-frills store.

Mr Collis is far from convinced.

"When you look at the US where there's a total free market, no regulation whatsoever, the pharmacy industry is dominated absolutely and completely by insurance companies, by drug companies and by the likes of Walmart supermarkets," he says.

"Around 10 to 15 years ago, 54 per cent of pharmacies in the States were individually owned, now there's only 40 per cent. Of that 40 per cent, their market share is just 15 per cent."

He insists it is not enough simply to take a prescription from a customer, put the drugs in a bag and send people on their way. But he understands why the restriction on the numbers of pharmacies as contained in the 1996 legislation might be seen as protectionist. He argues the framework laid down for the sector in 1996 should be retained and tweaked rather than flinging the doors to the industry wide open.

"[The 1996 legislation] obliged the pharmacist to be available for the consumer at all times, to be available to the patient to discuss their medicines, to be able to answer and deal with queries regarding those medicines and to be aware that they are the responsible agents regarding the distribution of that medicine and that everything must be right with it. The emphasis was very much put on patient care and that was the big leap forward."

But surely the cost-driven chains could provide in-store on-the-spot consultancies while offering drugs at cheaper rates?

Not so, he argues. "At present the Irish pharmacy is a highly personalised business. You become a focus in the community where you can be accessed and where you are trusted. In the American model staff turnover is huge - you do not have that consistency of staff."

Many big groups are so anxious not to provide an informal consultancy service they have a deliberate staff-rotation policy to prevent relations building between staff and customers, he claims. And, he adds, at least one multinational chain has a policy of no eye contact between staff dispensing drugs and customers on the other side of the counter. "It only slows down the process, impacts on productivity," he says. "I have a health perspective in my business, whereas they have a financial perspective and it is very, very hard to get that message across."

He uses one recent case at his own pharmacy to illustrate how the one-to-one in-store consultancy service is key. A heart-transplant patient was prescribed an anti organ-rejection drug by his hospital. In another department of the hospital the same patient was prescribed a second drug for stomach problems. But the second drug has a significant effect on the anti-rejection drug. When the patient came in to pick up his prescription Mr Collis spotted the mistake, rang the hospital and the patient was taken off the stomach drug. If that error had not been spotted in the chemist and the two prescribed drugs had been handed over the patient would have been compromised at a very vulnerable stage of recovery, he said. He strongly believes multinational "wrap-and-pack" chains would not provide such a service. But what about the argument that the old restrictions meant a select group of pharmacies, whose position in the community was never challenged, could charge what they wanted?

"The Department of Health controls the costing terms of prescription medicines, which accounts for around 70 per cent of all pharmacies' business," he says.

"The Deloitte and Touche value-for-money review of the health services last year revealed that drug prices had not risen as much as they would have been expected to given the environment in which we are working. The review said there was a 12.4 per cent increase in drug prices over a five-year period. It is interesting to note that other medical products and equipment rose by 35.6 per cent over the same period. That demonstrates that prices are competitive, and are being controlled."

But a recent report by Indecon International Economic Consultants for the Pharmacy Review Group showed Irish pharmacies had the highest profit margins in the EU and charged the most for many products.

He says one of the three products surveyed - the box of over-the-counter "coughing and throat relief" - was more expensive in seven other EU countries. For the second product, Band Aid, Ireland and France were the most expensive but Mr Collis insists plasters are sold in shops and chemists all over the country and "it is up to the individual store to be price-competitive if they want to sell them". And the third product surveyed, Augmentin 500, he says is not even available in Ireland, so the surveyors made comparisons with a replacement drug, which is almost 30 per cent cheaper in Ireland than in the UK. He says chemists sell thousands of drugs and to review pricing on the basis of just three is nonsense.

"You can't employ the same economic theory to, say, Ryanair that you can to pharmacies. All Ryanair has to do is get bums on seats, get people from A to B and it is a no-frills airline. We cannot give that kind of service if we are true to what we are doing."