Corporate vs Independent Pharmacies

Siboniso Bophela

29 Apr 2022

Does the franchising of pharmacies lead to prioritising profits?

Regulation

In the aftermath of the democratic elections in 1994, the private pharmaceutical industry in South Africa was largely centred in the cities along with a few pharmacies scattered further out in less crowded areas. To address this, a government regulation aimed at improving access to pharmaceutical services by removing ownership restrictions from 'only pharmacists' was introduced on the 25th of April 2003.


Concentration of pharmacies

To explore the effects of the legislation, a research article published in 2020 examined The South African Pharmacy Council's register from 2004 to 2014. While pharmacy ownership opened up in South Africa, there was no increase in access to previously less populated areas. A steady rise in corporate pharmacy ownership (35%) was observed along with the concentration of pharmacies in well-resourced areas.


The overall growth of pharmacies was only 1.88 pharmacies per 100,000 population. 23.9% of pharmacies active within the system closed between 2004 and 2014, of which, 91.7% of them were independent pharmacies.


In the United States, during the North Dakota Pharmacy Ownership Initiative in November 2014, a chain pharmacy group attempted to repeal a 1963 state law restricting pharmacist ownership and lost. In every measure of pharmaceutical care, including prescription prices and patient care levels, as well as rural access, North Dakota ranked higher than other states.


Conclusion

Despite producing more graduates in pharmacy over the years, South Africa is failing to provide them with employment opportunities. Policymakers need to consider other incentives to improve access in underserved areas to reduce the pharmacist-to-population ratio deficit. Where ownership is exclusive to pharmacists, there is an understanding that community pharmacists form an extension of the healthcare system and provide an essential public service. The industry cannot be solely driven by profit incentives and serve densely populated high-income communities alone. Regulations to improve rural health services may be required.