Changes threaten traditional role of pharmacists.

New Zealand community pharmacies under threat from international players eyeing the local market - and impending de-regulation - are at a crossroads, industry experts believe.

"Many community pharmacies are extremely worried about coming changes," says Gina Cook, partner with BDO, the business advisory and accountancy firm. "There is no doubt the industry is facing challenges."

Moves by the Australian-based Chemist Warehouse - a $NZ4.8 billion business with 400 stores -to set up in New Zealand is one development sparking debate among pharmacists over the industry's future.

But the industry - which has had a new funding model in place since 2012 - is also facing legislation which, if passed, will open the way for anyone to own a pharmacy, not just registered pharmacists.


More than 90 per cent of those who took part in a recent BDO pharmacy survey say they are concerned about disruption facing pharmacies - there are just under 1000 operating throughout the country - by moves such as the Chemist Warehouse is planning.

However Cook says the survey also showed the industry rates itself highly on its ability to review and tailor its products and services - an indication of the high level of customer-focus that exists within many pharmacies.

She says it is this focus that will set community pharmacies apart from operators seeking to entice price-sensitive consumers by offering retail products like supplements, vitamins and cosmetics on a high-volume, low-price supermarket-style basis.

"There is also concern technology and online shopping will cause disruption as tech-savvy people have changing expectations of how and where health care and medicines are delivered," says Cook. "But supermarkets and online retailers have been offering competing products for some time so these avenues are likely being used already.

"Community pharmacies need to remain focused on what they do well - providing good health care - rather than competing on bargain basement pricing."

Rachel Shoebridge who is also a business partner with BDO, envisages a future where pharmacies strengthen their work in the community by increasing collaboration with doctors and other healthcare teams.

"Indeed this is the focus of the Pharmacy Action Plan 2016-2020, a document produced by the Ministry of Health," she says.

"There is a lot of collaboration now; but in the future it is anticipated it will be closer with pharmacists likely to assist with a lot of the lower level medical tasks carried out by GPs like immunisations.

"With an increasing and ageing population, the burden of long-term conditions including diabetes, asthma, arthritis and mental health - to name a few - will grow and place greater pressure on a health system already struggling to meet demand," she says.

"For this reason the action plan has identified the need to make better use of the existing pharmacy workforce."

Shoebridge says the legislation now before Parliament - the Therapeutic Products and Medicines Bill - will open the door for anyone to set up a pharmacy.

"At present 51 per cent of a pharmacy business is required to be owned by registered pharmacists, but the bill will allow anyone to do so, although they will still need to employ those who are registered.

"Obviously people are worried about this," she says. "If the bill is enacted into law - and since the general election who knows what will happen to it now - it will be seen as a real barrier for potential new owners, particularly young student pharmacists looking to ultimately set up in business for themselves.

"So I think we could see a degree of consolidation among owners and although I don't believe this will lead to a decline in the number of pharmacies, I certainly think there won't be a lot more opening in the future."

Shoebridge says the experience of the pharmacy industry in Ireland provides heartening news for New Zealand: "Ireland, which has a population similar to ours, has been through de-regulation but most businesses there are still owned by pharmacists."

# About 1.3 million visits are made to pharmacies each month throughout the country; there are more than 3500 practising pharmacists, 75 per cent of whom work in community pharmacies and are part of the health system people have the most regular contact with and easiest access to.

For more information on BDO's pharmacy services, click here.