Pharmacies - Price competition - Why is there none?

[gearoid]

brutal cuts ...

5,000 jobs isn't a threat, its an unavoidable conclusion.

Why should the state pay enormous sums and make massive subventions to enable a small coterie of people make massive profits? Because the government has been weak, and the pharmaceutical lobby has been strong. Fostering internal competition will strengthen the country and save people money. The over-emotive guff from the pharmaceutical lobby should be resisted.

Labelling cuts in a GUARANTEED 50% mark-up as brutal is quite frankly bizarre! Why should there be any guaranteed mark-up?

This is a cosy sector that needs to be forced to compete openly.

Special interests groups in Ireland such as the pharmaceutical lobby need to be faced-down forcibly to reduce the taxation burden on those of us who actually have to compete in an open market with no guaranteed tax paid lolly.

Now I'm off to pay 4.56 for some eye-drops which should cost about 1.50 if there was proper competition.

 

[Complainer]

No, I don't.

You need to get out more.

Hi complainer. As a pharmacist, I used to sell aspirin 75mg over the counter without a prescription, which is cheaper (currently!) than dispensing it. However, the Irish Medicines Board (not to be messed with!) changed the regulations to make this illegal, and it can now only be bought with a prescription. The reason for this is that anyone who takes this medicine is on it to reduce their platelet count, i.e. thin their blood in order to reduce the possibility of clots occurring which could lead to strokes, heart attacks, deep vein thromboses etcetera. The 75mg dose isn't strong enough for pain relief, and is also coated to reduce potential stomach upset. Therefore, the logic is - anyone who is on this seemingly simple and old-fashioned medication should be on it for a very good reason and not just because they feel like it. Therefore, the IMB feel it should only be dispensed on prescription in to encourage patients who use it to get a check-up from their GP or cardiologist or whoever (in real life - not online!) every 6 months.

If, however somebody comes into my shop and is vocal and irritating enough about the price of the aspirin - I'll sell it to them for a quiet life. They are adults after all - and I'll explain the logic of not selling it without prescription - but they probably won't listen.

Thanks for the explanation, which is more than I got from my pharmacy, despite me being quite vocal and irritating. How does your OTC price compare to the US OTC price? Is Ireland the only country to go prescription only for aspirin?

Good question it's something that i have never even thought about. I suppose if your ill and need medicine you just go to the nearest place.

Many people are on ongoing prescriptions. I'll probably be on medication for blood pressure for the rest of my life, so I have lots of time to shop around.

You probably read about the brutal cuts being imposed too then:The following are the precise measures the Minister has decided:

• (a) re-balance the amounts paid in respect of, on the one hand, the GMS and, on the other hand, the Drugs Payments Scheme, Long Term Illness Scheme and other community drugs schemes, by:
  • (i) introducing a new higher dispensing fee structure for the schemes based on a sliding scale as follows: €5 for first 20,000 items, €4.50 for next 10,000 items and €3.50 for the remaining items; and
  • (ii) reducing from 50% to 20% the retail mark-up payable under the community drugs schemes (no mark-up is payable under the GMS); In these two measures, the Minister is responding to concerns expressed by pharmacists that medical card dispensing is cross-subsidised by the retail mark-ups on the other schemes. This should benefit pharmacies with relatively more medical card patients, for example, those serving poorer areas.

• (b) end a special payment to pharmacists in relation to the automatic entitlement of persons over 70 to a medical card, as that entitlement has been ended; and

• (c) reduce the ‘wholesale mark-up’ reimbursement price paid for delivery of drugs to community pharmacies, from 17.66% to 10%. This mark-up was intended to pay for wholesale distribution costs but it is almost double the European average for this type of service. Approximately half of this mark-up is being passed back by wholesalers to pharmacists by way of discounts.

The measures will be given effect through Regulations to be issued by the Minister in due course. It is intended to implement them with effect from 1 July.

5,000 jobs isn't a threat, its an unavoidable conclusion.

Any data to back this up? It would be interesting to see the split of revenue and profit between the prescription business and the OTC business for pharmacies. And the number currently employed in pharmacies. And the profitability level of pharmacies. Do you believe that pharmacies aren't outrageously profitable?

 

[outperform]

I can tell you from looking at my figures yesterday that the OTC section of my business has dropped 20% year on year. Big deal, whose hasn't you might say. Anyway, at those figures, my front of counter business is losing me money as we speak.

 

[outperform]

You need to get out more.

Thanks for the explanation, which is more than I got from my pharmacy, despite me being quite vocal and irritating.

All part of the service!

How does your OTC price compare to the US OTC price? Is Ireland the only country to go prescription only for aspirin?

Unfortunately I don't have the luxury of being able to reference US retail prices when I'm trying to earn a profit! However, I am aware that in different jurisdictions there are different rules and prices for different medicines. For example, in the US, Zovirax cream and I think Zirtek antihistamines are prescription only. I know that the Zovirax is also expensive. Here you pay 10euro or so to buy it over the counter or 6 or 7 euro for the generic equivalent. Here, melatonin is prescription only. In the US you'll find it in the vitamin section. I don't know how they treat aspirin 75mg in other countries.

Many people are on ongoing prescriptions. I'll probably be on medication for blood pressure for the rest of my life, so I have lots of time to shop around.

Hope you find a good pharmacy. I hear they've great value in Boots for shampoos and razors.

Any data to back this up? It would be interesting to see the split of revenue and profit between the prescription business and the OTC business for pharmacies. And the number currently employed in pharmacies. And the profitability level of pharmacies. Do you believe that pharmacies aren't outrageously profitable?

Like all business sectors, theres good and bad. Aer Lingus and Ryanair. Which is the good or bad between those two? I know some pharmacy businesses that are doing very well, and some that are struggling badly, and some that have closed due to recent economic occurences - not to mention poor location, over-leveraged, poorly managed etc. Make no mistake, should these cuts go ahead as announced, it will effectively be a government-backed cull of pharmacies. Don't expect any better competition or lower prices from the ones that survive. In fact I can guarantee you that as the prescription volume increases for surviving businesses, service levels will go down as it won't be worth employing extra staff.


In short, I know that most pharmacies aren't outrageously profitable.

 

[outperform]

Why should the state pay enormous sums and make massive subventions to enable a small coterie of people make massive profits?

Show me the massive profits! There's massive money involved OK, not a lot of it is profit - its mostly debt - secured on a government contract that they're now changing the law in order to renege on it.

Because the government has been weak, and the pharmaceutical lobby has been strong. Fostering internal competition will strengthen the country and save people money. The over-emotive guff from the pharmaceutical lobby should be resisted.

So you're OK with 5000 job losses then? And roughly 300 pharmacy closures? Even the ones that don't go wallop will cause even more trouble for the banks.

Labelling cuts in a GUARANTEED 50% mark-up as brutal is quite frankly bizarre! Why should there be any guaranteed mark-up?

The magnitude of the drop in income is absolutely brutal. The 50% mark-up (33% margin) only applies to the DPS part of the prescription business - roughly 70% of my business is GMS (medical card) which has a guaranteed 0% mark-up (0% margin). I haven't worked out yet what 20% mark-up is in margin terms. The average pharmacy will see a drop of 36% in their income from these cuts.Thats one hell of a haircut by any standards! Every other health professional and legal professional had their fees cut by 8%. Harney has a massive chip on her shoulder about pharmacy.She tried to implement similar cuts last year and she lost the battle in court. Now she's had the law changed to kill the profession.

 

[Complainer]

The magnitude of the drop in income is absolutely brutal. The 50% mark-up (33% margin) only applies to the DPS part of the prescription business - roughly 70% of my business is GMS (medical card) which has a guaranteed 0% mark-up (0% margin). I haven't worked out yet what 20% mark-up is in margin terms. The average pharmacy will see a drop of 36% in their income from these cuts.Thats one hell of a haircut by any standards! Every other health professional and legal professional had their fees cut by 8%. Harney has a massive chip on her shoulder about pharmacy.She tried to implement similar cuts last year and she lost the battle in court. Now she's had the law changed to kill the profession.

Are you ignoring the OTC business in these comparisons - 36% of the prescriptions, but not 36% overall - right?

 

[Fatphrog]

Are you ignoring the OTC business in these comparisons - 36% of the prescriptions, but not 36% overall - right?

I can tell you from looking at my figures yesterday that the OTC section of my business has dropped 20% year on year. Big deal, whose hasn't you might say. Anyway, at those figures, my front of counter business is losing me money as we speak.

 

[Protocol]

Hopefully these reforms will:

• bring down the price of prescription drugs
• reduce the excessive monopoly profits earned by pharmacies
• and so increase the welfare of society

 

[Protocol]

As only 1/3 of the pop have a med card, how can med card trade be 70% of business?


Mary Harney makes a good point:

“Put simply, it should not cost €640 million to get €1.04 billion of drugs from the factory gate to the patient,” she said.

 

[samanthajane]

But you do know of someone in your circle of family and friends travelling over the next six months?

No, I don't.

You need to get out more.

Apart from myself, i dont know anyone else that is going away either.

Do i need to get out more aswell??

 

[outperform]

As only 1/3 of the pop have a med card, how can med card trade be 70% of business?

Given that most of the medical cards are given to the elderly and people with high medical needs, e.g. transplant patients, they constitute the majority of business in 90% of pharmacies. I am far from unique - in fact my percentage is roughly average.

Mary Harney makes a good point:

“Put simply, it should not cost €640 million to get €1.04 billion of drugs from the factory gate to the patient,” she said.

She's right. It shouldn't. As pharmacists we could inform her of plenty of fairer and less destructive ways to reduce that cost, and of reducing the horrendous waste of drugs pharmacists see regularly. She doesn't think we're worth talking to, however. Just talking down to.
Having said that, pharmaceuticals aren't just an ordinary commodity. She'd be more right if she was talking about the cost of bringing cornflakes from the factory gate to the consumer. In her eyes, we're just retailers - not health professionals. Next time you have a query for your pharmacist (maybe you couldn't be bothered going to the doctor) thats worth bearing in mind.

 

[jpd]

As for the job losses, what about the effects of everyone paying higher prices than they should ? Putting that extra money into consumers hands will generate more jobs elsewhere in the economy.

This sort of argument is used all over the place to justify special treatment for a few, at a price to be paid by all !

 

[outperform]

I don't regard expecting fair and reasonable negotiations as special treatment. We're getting special treatment from Harney alright - a big two fingers!

 

[Smashbox]

Apart from myself, i dont know anyone else that is going away either.

Do i need to get out more aswell??

Thanks Sam, I did wonder why I need to get out more just because I dont know anyone travelling to America. Complainer, can you explain that one? And how you know that I dont get out too much, which in fact isn't true at all?

 

[Fatphrog]

Going to america to save a few euro on aspirin is a bt much. you could always buy a pack of disprin 300mg, less than €3 in Ireland I think, and divide them into 4. This is easy to do with the dispersible tablets since they are quite large.

 

[gearoid]

So you're OK with 5000 job losses then? And roughly 300 pharmacy closures? Even the ones that don't go wallop will cause even more trouble for the banks.

Your argument is economic nonsense.

It won't come to that. De-regulation and competition should benefit the wider society in the end. If there are a few temporary job losses then so be it. The more efficient pharmacists will flourish and provide cheaper and better services for the public and create employment. It isn't as if pharmacies are major exporters from Ireland. People will still get sick and need pharmacies so this kind of apocalyptic vision is being provided to justify unfair restriction of competition.

See this interesting EU internal market study.

[broken link removed]

The summary findings would support de-regulation.

In short lets de-regulate and see how it goes. Why should we pay to protect pharmacies when the export sector is suffering so much? It makes more sense to support export-led businesses than pharmacists.

This country should develop an aggressive internal market for services.

 

[Fatphrog]

Your argument is economic nonsense.

It won't come to that. De-regulation and competition should benefit the wider society in the end. If there are a few temporary job losses then so be it. The more efficient pharmacists will flourish and provide cheaper and better services for the public and create employment. It isn't as if pharmacies are major exporters from Ireland. People will still get sick and need pharmacies so this kind of apocalyptic vision is being provided to justify unfair restriction of competition.

See this interesting EU internal market study.

[broken link removed]

The summary findings would support de-regulation.

In short lets de-regulate and see how it goes. Why should we pay to protect pharmacies when the export sector is suffering so much? It makes more sense to support export-led businesses than pharmacists.

This country should develop an aggressive internal market for services.

Irish pharmacy has been deregulated for years and the deregulation process is now complete with foreign trained pharmacists now able to open and work in new pharmacies. A pharmacy can be set up anywhere.

The change is pharmacy renumeration is not deregulation, it's a straight cut in pharmacy income. This will lead a reduction in services because pharmacies will employ less staff. With less staff, pharmacists will be able to spend less time with patients and will stop services such as free blood pressure checks.

 

[gearoid]

Irish pharmacy has been deregulated for years

I pay the same overinflated price everywhere for OTC and non-OTC pharmacy products. Is that full deregulation?

 

[Fatphrog]

The cup of coffee I bought earlier cost too much. Do coffee shops need deregulation?

 

[Eithneangela]

Just back from France. On monthly Bonviva tabs for osteo - €60 here for one here, got 3 for €70 in France. Exactly the same mg. and even packaging. Wake up - greedy pharmacies in Ireland