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Welcome to the May 2012 homepage edition of i2P-Information to Pharmacists. Rollo Manning has been having some time out having staples removed from the site of his open heart surgery.He is now at home recuperating in Darwin, having arrived home last Friday, beating a cold and hasty retreat from Canberra.We all wish him a speedy recovery and hopefully, he will be fit enough to contribute by next month.
This month, Pharmedia discusses the toll that is taken when someone complains about you to an authority without good cause. Well, the good news is that you can now take action to protect yourself if such a complaint is made, and that may even include action for defamation. Read about a recent case involving two doctors, with Mark Coleman drawing on personal experience to illustrate.

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Location rules, regulation rules and money rules

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	Chris Wright articles by this author...
Chris has spent many years in the pharmaceutical industry and is semi-retired. He has an interest in supply chain procedures, and work flows within community pharmacies, and he provides consultancies around those activities.

The National Competition Policy Review of Pharmacy has surely failed to protect the industry from itself.
The objectives of the restrictions include; “ Keeping pharmacy business small enough to facilitate the close personal supervision of their professional operation by the proprietor pharmacists.”
Oh, yeah, just how does that work?
And… “Protecting pharmacy businesses from perceived “unfair competition” and market dominance from large pharmacy-owning corporations and chains and, in some jurisdictions, Friendly Societies”.

Come on, let’s be serious!

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A regulated industry is anti-competitive by the very nature of the onerous impositions placed on those with a touch of flare, drive and business skills…pharmacy is no different.

The review is breathtakingly inconsistent insofar as it exhorts one of the social and economic costs of the restrictions as being; “ Not allowing fully effective price and professionally-based service competition between pharmacy businesses”

Yet, it supports the notion of multi-pharmacy businesses realising savings in areas such as bulk purchasing. Hmmm, call me slow, but doesn’t purchase power encourage discounting and aggressive marketing?

I note that there is no mention of exactly which products the review refers to. It could be anything from Lipitor to Lipstick……although Laxettes could be a chance.

Yes, you’ve read all this before, but I highlight these matters to make a comment about the location rules/approval number farce, which has no doubt contributed the probable consigning of community pharmacy as we know it to the history books.

It is easy to come to the conclusion that Big Brother (otherwise known as MediCare) does not place a value on pharmacies. After all, they dish out approval numbers for free, in spite of the location rules. Mind you, these highly prized and sought after approval numbers must be free, because their “sale” by Government is quite probably unconstitutional.

The following is from the Commonwealth Constitution sections 53 and 55.

53 “Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law.”

55 “Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect.

Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only. ”

Mumblings from the hallowed halls of Owen Dixon Chambers (after a long alcoholic lunch) were:

“How can charges for approval numbers be constitutional? To be constitutional, they have to be a tax, or a fee for service, or a licence fee, or a penalty. They aren’t a penalty. To constitutionally impose income tax, we have to have an ‘Income Tax Assessment Act’, an ‘Income Tax (Administration) Act’ and an ‘Income Tax (Rates) Act’. We don’t have a ‘Provider Number Tax Assessment Act’ a ‘Provider Number Tax (Administration) Act’ and a ‘Provide Number Tax (Rates) Act’ so there is no constitutionally imposed tax. The Commonwealth is not imposing any fee for service. And how could the Commonwealth be imposing a licence fee? State law governs who can prescribe pharmaceuticals, the Commonwealth law does not, it just decides who gets paid a benefit for doing so? So the Commonwealth is not doing any licensing.”

Now that you’ve either thrown the towel in or are in some sort of state of utter intellectual boredom I’ll get to the point.

An approval number can be acquired either for “free” as a consequence of meeting a certain criteria as set out by Big Brother’s location rules or, for another set of rules an inactive approval number can be “purchased” for the price of a nice house in Hobart. Even in a regulated market, this seems to be abject hypocrisy.

If an approval number is deemed to have the value of a house, only cashed up, entrepreneurial half-smart pharmacists are able to enter the “new” market. Young pharmacists have no hope of becoming proprietors in these circumstances and the sad fact is, nothing is being done to encourage them to do anything other than to become “sausage makers” in an environment the National Competition Review of Pharmacy attempted to avoid.

The end result is that pharmacy will continue to be dominated by the powerful brands, who I must say, are all brilliant marketers, whatever their model. Young pharmacists are becoming increasingly excluded from ownership, which does not augur well for the future.

If the combination of the powers that be and market forces in this regulated environment concludes that an approval number is the price of a house more must be done to assist young pharmacists in their quest to become proprietors. And let’s be frank about this, Big Brother must obviously give tacit support for the notion that a house is of equal value to an approval number.

That being the case, in the interest of protecting the right of choice for both pharmacist and patient in the future, why would Big Brother not “guarantee” the cost of an approval number for young pharmacists wanting to preserve the culture of community pharmacy. So, in the interest of ensuring individual ownership of pharmacies is at least possible in the future, why not support young pharmacists by way of financially supporting their approval number on the basis they will be “sole” proprietors for a minimum of 10 years and work full time in their pharmacy, which is becoming a rarity. More rules, but maybe an imbalance can be addressed.

Outrageous? Yeah probably, but something has to change because if this heavily regulated culture of rules, rules and more rules continues to favour dominance by few, pharmacy as we know it will be lost, if not already.

Chris Wright.

September 2009.

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