“Cowboy” controversy continues

Community pharmacy in greater Auckland continues to experience unrest following the opening of a spate of new pharmacies in well-serviced areas.

It is not so much the competition posed by these new businesses, but the questionable tactics employed by some that is causing alarm.

The cases highlighted in Pharmacy Today last month are by no means the only ones of their kind. Onehunga is a similar example that has been brought to light.

Pharmacist Emad Jubbawy has been running the Onehunga Centre Pharmacy for the past 12 years. Mr Jubbawy says he served the patients of the Tongan clinic nearby, called Langimalie Clinic, and managed to build professional relationships with the clinic staff, which was reflected in good outcomes for their patients.

Several years ago, a small pharmacy opened up on Onehunga Mall, with a name similar to Mr Jubbawy’s pharmacy, about 300 metres away, and about 500 metres from the Tongan clinic.

“As time passed, we realised fewer and fewer Tongan patients were coming to our pharmacy. On investigation, we found out our regular patients were being instructed by Langimalie’s key staff to collect their scripts from the new pharmacy.

“As we voiced our concerns with [the clinic’s] practice manager, they promised to stop the practice. However, the situation has remained unchanged and they continue to send patients directly to the new pharmacy; by faxing scripts and directing patients there, telling them that the pharmacy is part of Langimalie Clinic.”

Mr Jubbawy says he has tried to raise the issue through his lawyer as the practice clearly amounts to breach of the code of ethics, “but we didn’t succeed because of the lack of evidence [mainly by patients themselves].” Over the years, he says, he has lost a lot of patients, who walk past his pharmacy to go to the clinic’s preferred provider.

The clinic staff Pharmacy Today spoke to confirmed the clinic did recommend a particular pharmacy in the past, but suggested we speak with their chief executive Paul Lavulo for the latest situation. Mr Lavulo was overseas at the time.

While such cases are threatening the commercial viability of both new and established pharmacies by spreading the script volume thinner than ever, authorities say they are helpless to do anything in light of the current legislation.

In Otara, local pharmacists claim patients’ coercion is still continuing.

Pharmacy Guild president Ian Johnson says desperation will often cause people to react in ill-considered ways as they address their individual needs.

He says necessary balance is required in any service that uses private investment to deliver public good, like health.

“Understanding where that balance sits is crucial. Coercing patients is both unprofessional and counterproductive to the goals of pharmacy and the wider health sector.”

In April, Pharmacy Today spoke to El-Fadil Kardaman, the pharmacist behind several new pharmacies named in similar cases, at his Dispensary Plus pharmacy in Henderson’s West Fono clinic.

While refuting allegations of influencing patients to fill their scripts at his pharmacies, he said co-locating pharmacies at medical centres could actually be the future of community pharmacy in the country as it aspired to the health minister’s Better Sooner More convenient healthcare through better coordination of medical and pharmacy services.

When asked how the series of pharmacies he now owns propose to provide value-added pharmacy services such as MUR and medication management, he said he planned to collaborate with a clinical pharmacist working for Counties Manukau DHB for provision of such services.

Incidentally, the Pharmacy Guild had highlighted the issue of “cherry picking” by new pharmacies like those of Mr Kardaman’s, which were focusing on basic dispensing, sending all the complex scripts to other pharmacies.

While pharmacy audit now takes a stern view of such practice, Mr Kardaman says his pharmacies are committed to providing “a complete range of pharmacy services” as sending patients away to others defeated the whole purpose of having the pharmacy within the medical centre and providing GP and pharmaceutical services in a coordinated manner under the same roof.

Meanwhile, as the dog-eat-dog practices grow in pharmacy, no credible solution has yet been floated by the leadership. One of the suggestions being advanced is that pharmacists should be required to have certain experience before they can be given a licence to own a pharmacy. But that is unlikely to address the core ethical issue.

“It would seem sensible that competency to operate a pharmacy and provide a high quality service, that the public rightly expect, is validated as part of the licensing process,” Mr Johnson says of the suggestion.

“This is the case with other licences, including the right to drive. Yet, I don’t believe we have seen the level of vigilance and diligence that should rightly be expected of those charged with the responsibility of issuing licences in the past.”

Reproduced below is a range of views on the issue, in the speakers’ own words.

 

Sue Scott
Team leader, Medicines Control

The director-general of health, as the licensing authority, grants an application for a licence to operate a pharmacy if he is satisfied the applicant has met all the requirements of Section 51 of the Medicines Act 1981.

All the pharmacies presently licensed meet these requirements.

The ministry, as the licensing authority, has no authority in relation to strategies adopted by pharmacies to attract customers as long as they do not contravene the conditions attached to the licence.

All the pharmacies at the time that their licence is approved meet these requirements.

 

Alan Wham
Chief executive, Pharmacybrands

I would caution young pharmacists about starting a new “greenfield” pharmacy business.

The ramp up is very slow, the cash required is always more than you think and the banks need other security for loans and are risk adverse to start ups. If the pharmacy is not sufficiently capitalised, you cannot draw a salary for some time.

Patients are very loyal to their pharmacy and change doesn’t occur easily.

It is a much less risky option paying goodwill and buying a successful business. Very few start ups make money for their owners in the first few years, unless the site has significant advantages over competition.

As a company, we look for existing businesses to buy and turn down a lot of start up sites. We bring many new young pharmacist partners into these acquired businesses as 51% equity shareholders.

Some countries do control the number of pharmacies through licensing type processes as they want fewer bigger pharmacies that benefit from economies of scale. Unfortunately, their rationale is to ensure they get the lowest prices for government expenditure. Licensing controls can create an inflated price for existing businesses.

My view is these start ups next to an existing pharmacy is a lose:lose equation for both operators and the health system. It doesn’t create goodwill and strong relationships with the GPs as they don’t like the conflict.

My advice is: don’t do it unless you have very significant consumer advantages.

 

Bronwyn Clark
Chief executive Pharmacy Council
Any new pharmacies must meet the same standards that exist for all pharmacists, and must not compromise patient safety, including the patients’ right to choose their own health provider.

On receipt of a written complaint, the council has mechanisms to refer matters to the health and disability commissioner. If the matter is referred back to the council, we can investigate concerns of improper conduct or competence.

 

Ramy Burjony
Auckland pharmacist and Pharmacy Today blogger
There should be a need for a pharmacy before it can be opened in a particular location. Not only that, the pharmacist who owns the majority share should have been working as a pharmacist for a certain number of years.

Surely you shouldn’t be allowed to be bankrolled into opening a pharmacy or, in some cases, a chain of pharmacies, after just being registered.

The pharmacy ownership criteria need to be modified. Following deregulation, pharmacists are able to own majority shares at five pharmacies. But there needs to be a restriction on how early you can own a pharmacy and where a new pharmacy can be opened.

 

Atul Mehta
Chartered accountant, Markhams

Not enough planning goes into what potential income the new pharmacy could earn by opening next to an existing business. Most of the time, emotion takes over and commercial reality takes a back seat.

In my view, a lot of times pharmacists are worse off, initially anyway, when they switch from a secure, well -paid job to their own business due to set-up costs and the operational costs of lease, borrowings, wages and other expenses without having sufficient income to support the overheads, specially in the first couple of years.

In some cases, this may work if they do not have a full time job and the business provides an opportunity. However, sometimes it means they are buying a job. A lot of new pharmacy owners do not work out these things before they take the plunge.

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