The Health Minister isn’t ruling out widening the net on who can own a pharmacy in New Zealand. 

The introduction of the long-awaited Therapeutic Products Bill has excluded changing the rules on pharmacy ownership but Andrew Little told Newsroom he’ll keep an open mind. 

New-look regulator will demand ‘robust’ evidence for natural remedies’ claims
New $2.3b natural health industry’s power stifled by old rules

“We thought we’d leave the status quo as it is for now. Obviously, I’m keen to hear submissions once the bill goes to select committee to see what pharmacists and the public think of that … I have an open mind about what the future might look like.” 

In a Ministry of Health newsletter confirming the bill’s introduction, it added that changing the rules would be too disruptive at this time.  

“Given the significant changes underway with the health and disability system reforms and the ongoing Covid-19 response, the pharmacy sector does not need further change. The removal of restrictions on pharmacy ownership would create additional uncertainty and disruption for the sector in the short term.” 

Under the Medicines Act, pharmacies must be majority owned by actual pharmacists who have “effective control” of the company.  

But in preparing the bill only a year ago, the Ministry of Health strongly recommended relaxing the rules, saying current regulations were no longer fit for purpose and relaxing them would enhance competition to benefit consumers.  

“Maintaining the ownership restrictions would limit the opportunity to innovate. For instance, healthcare service providers (such as iwi organisations) would be prevented from establishing pharmacies to serve particular areas or consumer groups.” 

“The status quo is not effective in achieving the original aim of keeping pharmacies as small businesses, as corporatisation has already occurred in the pharmacy sector,” a regulatory impact statement made public last month said.

The ministry noted large pharmacies have managed to enter the system, which was not in line with the original intent of the ownership regulations.  

“Regulatory changes in 2004 to partially relax pharmacy ownership restrictions resulted in legislative provisions that have allowed a range of business arrangements to develop that comply with the letter of the law, but not the original intention of preventing corporatisation of the sector.  

“Experience shows these arrangements can be difficult to regulate.” 

Recently the decision to allow Countdown to operate in-store pharmacies faced this ownership question, with the New Zealand Independent Community Pharmacy Group seeking a judicial review of the decision to grant pharmacy licences to some stores.

The decision was reserved with the judge left to weigh up what exactly “effective control” was and whether Countdown’s pharmacies had it.

“This whole notion that current owners can’t actually innovate and adapt to evolving market needs. It’s a bit of a misnomer.” – Andrew Gaudin, Pharmacy Guild.

ACT wants to see ownership rules relaxed. Health spokesperson Brooke van Velden said not including the changes in the introduced bill was a missed opportunity.

“What we see with GP clinics up and down New Zealand is the ability to have GP-owned and operated or commercially owned and GP-operated facilities. The same should be said for pharmacy. I think the laws need to allow for innovation and they’ve missed an opportunity by leaving it out of this legislation.” 

But the Pharmacy Guild, which represents community pharmacists, is supportive of plans to leave things as is. 

Chief Executive Andrew Gaudin said the ownership rules added a layer of public safety.  

“Fundamentally the regulatory regime is first and foremost around public safety and so the provisions in the Medicines Act are all about ensuring that it’s about public safety and professional obligations for service delivery – doing that safely and effectively for New Zealanders. It’s about protecting that.”

He said community pharmacists were already innovating and creating benefits for customers without the need to change the regulations.  

“Community pharmacies innovated in spades over the last two and a half years through Covid, they really responded to the pressures presented and stepped up vaccinations, rapid antigen testing, now the provision of antiviral medicines, and introduced new technologies to be able to use telehealth to talk to people in their homes.  

“So this whole notion that current owners can’t actually innovate and adapt to evolving market needs. It’s a bit of a misnomer.” 

The Therapeutic Products Bill will replace the Medicines Act and the Dietary Supplements Regulations – both of which came into play in the 1980s. 

It’s wide-ranging and the culmination of many years of policy work, which mostly tackles the regulation of medical devices, treatments and natural health products. 

It is expected to have its first reading in Parliament before Christmas but it will likely be several years before any changes fully come into force.  

Emma Hatton is a business reporter based in Wellington.

Leave a comment