Chemist Warehouse store coming to Rotorua - sparking concern among pharmacists

Rotorua’s first Chemist Warehouse store is coming to town, but a local pharmacist is concerned about what the store opening could mean if the Government reintroduces the $5 prescription co-payment.

David Honore, commenting on behalf of Unichem Rotorua Central Pharmacy, said the arrival of Chemist Warehouse would, in his view, “affect the viability of the community pharmacies we’ve got within Rotorua”.

“All the [community] pharmacies are patient-centric pharmacies, all closely associated with the medical centres next to them,” Honore told the Rotorua Daily Post.

In his view: “I can’t see what the need is to give licences to other pharmacies to come into town. The services we all give are second to none.”

However, Honore said he was not opposed to an increase in competition.

“As far as the retail side of things goes, good luck to them. Their business model is very good and they’re very clever [regarding] what they do.

“Supermarkets have been around for a long time and community pharmacies competes with what’s in a supermarket, so there’s no real difference there.”

But Honore said he was concerned about what would happen if the Government reintroduced the $5 prescription co-payment - a fee that Chemist Warehouse does not charge.

The previous government scrapped the $5 prescription fee in May.

In August, in the lead-up to the election, Christopher Luxon announced the National Party would bring back the $5 prescription fee for those who could afford it and use the money for 13 cancer treatments available in Australia but not in New Zealand.

David Honore, commenting on behalf of Unichem Rotorua Central Pharmacy, was concerned about the possible return of the $5 prescription co-payment. Photo / Andrew Warner

Honore, who campaigned for years for the removal of the co-payment fee, said its return could affect how community pharmacies compete against large operations such as Chemist Warehouse.

“Community pharmacies can’t afford not to charge that, because if we didn’t charge that, we wouldn’t get paid at all,” Honore said.

“I just hope the people within the health system see the benefits of the community pharmacy network that’s within New Zealand at the moment.”

Pharmacy Guild of New Zealand chief executive Andrew Gaudin said: “Some people will invariably choose a discount pharmacy. As a result, discount pharmacies are putting community pharmacies under financial pressure.”

“A growing number of community pharmacies around the country are losing market share to discount pharmacies, leading to smaller pharmacies cutting services, cutting opening hours, and in some cases closing altogether.”

Gaudin said the guild encouraged people to continue supporting their locally owned and operated community pharmacies.

“They are an integral part of their community and have been for many years.’'

The news comes after Melbourne-based Sigma Healthcare announced a $752 million cash and shares merger with Chemist Warehouse, pending approval from watchdogs including the Overseas Investment Office.

In July, the NZX-listed owner of the Life and Unichem pharmacy franchises, Green Cross Health, told the NZ Herald it had been impacted by the aggressive expansion of Chemist Warehouse nationwide.

But the company’s chief executive, Rachael Newfield, told Markets with Madison the franchises were still confident they could compete.

“It has had a bit of an impact on margins, but our strategy is around making sure we show value to the customer, coupled with our expert care and advice,” Newfield said.

Chemist Warehouse will be opening in Rotorua on the corner of Amohia and Amohau streets. Photo / Andrew Warner

In light of the competition, Newfield said the company was having to be competitive with pricing on over-the-counter products such as medicine, supplements and cosmetics.

Chemist Warehouse has hundreds of stores across Australia and New Zealand, with an estimated 600 in Australia.

Chemist Warehouse was approached for comment for this article. The Rotorua Daily Post asked the company how many jobs would be created by the store opening in Rotorua and for an official opening date.

Job search website seek.co.nz had nine listed vacancies for roles at Chemist Warehouse in Rotorua in early January. As of today, there were no more Rotorua vacancies listed under “Chemist Warehouse” on the site.

A Ministry of Health spokesperson said it was aware of concerns in the pharmacy sector about the effects of co-payments on local businesses.

“The policy approach to prescription co-payments is currently being considered in line with the current Government’s election commitment.”

The spokesperson said it was a business decision to discount the prescription co-payment.

“[The] Commerce Commission has signalled that not allowing discounting of the prescription co-payment would be anti-competitive.”

The spokesperson said the Medicines Act did not impose restrictions on the number of pharmacies that can operate within a given area.

“Medsafe conducts an assessment against the pharmacy ownership requirements of the Act and a licence can only be granted where the applicant meets these requirements.”

The spokesperson said a company operating a pharmacy must be incorporated in New Zealand and effective control of the company must be vested in a New Zealand registered pharmacist holding a current annual practising certificate issued by the Pharmacy Council of New Zealand.

Maryana Garcia is a regional reporter writing for the Rotorua Daily Post and the Bay of Plenty Times. She covers local issues, health and crime.