Health Practitioners Competence Assurance Bill

Part 9 is about pharmacies, the restrictions on ownership, and the provisions under which they operate. Pharmacies in this country are reeling at the moment. Why? Because of stat dispensing. As a geriatrician I was very well aware that it was a sensible move to go to monthly dispensing. I used to go into people’s houses to assess elderly people, and I used to take shopping bag after shopping bag of medication out of their houses. Not only was a lot of money being wasted but the medication made people sick. People used to share the pills around. If one pill was good, they would have six of them. People got very muddled about what they were taking.

That led to something called closed control, where medication was put into little pop-out packs. Pharmac these days changes the medication that people get—the colour, the shape. It is the same generic drug, but the appearance changes a lot, and that really confuses older people. So rather than their trying to figure out every day what to do with all the different medication, under what is called closed control it now is put into a pack showing the day and the time to take it.

Pharmacists have paid for that. They have basically subsidised it out of the money they have been getting. They have done it for all the rest homes and all the elderly people who are a bit confused about their medication, but they have never really been paid for it. They have just done it. Now, because stat dispensing has gone—we are going to 3-monthly dispensing—pharmacists will lose 30 percent of their revenue. Because of that loss they will not be able to take on interns. There are a whole lot of pharmacy interns who cannot get positions.

We will see pharmacy closures in rural areas. I went to Clevedon the other day with my associate health spokesperson, Judith Collins. A pharmacist there said there is no doubt about this; she has worked out the impact of stat dispensing on her pharmacy, and it is going to close. She works next to a doctor’s practice, and that closure will mean that people in Clevedon, in rural, outlying areas of Auckland, will not be able to get access to medication. Nor will the people of Wakefield; Wakefield, near Nelson, is another place that is affected. The pharmacists there have said they will be closing the pharmacy. So pharmacists are reeling under what has happened to them due to Pharmac and the Minister of Health making these changes.

This bill talks about partial deregulation, which means that 51 percent of a pharmacy business needs to be owned by a pharmacist, and that a pharmacist can own up to five pharmacies. This is the situation currently in Australia. It is quite a move from the situation here at the moment, where pharmacists can have only one pharmacy. We are really concerned about protecting access in rural areas, and improving that access, but the Minister’s clause 254—and we will be supporting Heather Roy’s amendment—states that she can determine, by Order in Council, that a pharmacy can be owned by any particular community organisation or person, if she believes that health services, or access to those services, in that location will be improved. This is all about the Minister wanting primary health organisations to be able to own pharmacies. She wants to nationalise primary health-care in this country. She has already done it with the doctors. She has forced them to join primary health organisations, because they get no access to new funding if they do not join. Now she wants primary health organisations to be able to own pharmacies, as well.

The Minister has made disparaging comments about pharmacists being in retail as well. Well, it is the retail part of their businesses that cross-subsidises some of the other activities that pharmacists do. But now they are going to have to tell the district health boards that they cannot do those things any more for free, and that the boards will have to pay them. If the boards want closed control, if they want pharmacists to dispense medication, they are going to have to pay them to do that. I was in Kaikoura the other day, and the pharmacist there took me through some of the accounts. He showed me that to provide certain things, like methadone, costs him more; it costs him an awful lot. So I am afraid that the district health boards will actually have to pay pharmacists for what they do.

This part of the bill, as my colleague Dr Lynda Scott has stated, is primarily about pharmacists and pharmacies. Perhaps the most important provision in this part is one that might surprise people. It is the insertion into the principal Act of new section 55G, in clause 252. What does this section provide? It provides an exemption for mortgagees in possession. Do members know what that means? It means that all the regulations and the rules about who can operate pharmacies, who can own pharmacies, and who can be in charge of pharmacies are relieved for a period of 3 months when there is a mortgagee in possession, which means that the pharmacist has gone broke. That is exactly what is happening right now, in this country, to pharmacists.

Dr Lynda Scott came to my electorate of Clevedon, the wonderful electorate of Clevedon, and came with me to see the Clevedon pharmacist. We then trotted across to the Manurewa electorate, the electorate of the Hon George Hawkins. We did the job of George Hawkins. We went to see one of the pharmacists there who was just getting over a ram raid through her shop window. She had been burgled. Her shop window, in the electorate of the Minister of Police, had been ram-raided by people wanting drugs, and they got them. So that is what we have got; we have got a section in this bill that is devoted to what to do when the pharmacists go broke, because they surely will.

Under the stat dispensing rules that this Government has put in place, pharmacists are, in fact, going broke. They are worried people. Pharmacists are not simply sellers of medicines. It is a sad point, but it is true, that this Minister of Health has no respect for pharmacists. I do not know what she thinks pharmacists are learning in their 5 years of full-time training. I think she thinks they are learning just to type a few labels and stick some pills in bottles. But that is not true. The pharmacists whom we are talking about are highly trained health professionals, and they deserve to be treated as such. To have this Minister of Health denigrate them and say that, because they have sold a camera, they are not health professionals shows the absolute limit of her capability as Minister of Health—and that is not very much.

That is what we are dealing with here; we are dealing with a profession that is under siege. Not only is it under siege from the stat dispensing rules but also it is under siege from the fact that our qualified pharmacists, who are very well-qualified, are able to do much, much better if they go overseas. One particular pharmacist told me that he is dispensing 300 times a day. This is a pharmacist who, as he said, would normally now want to be retiring or working part-time, but he has to stay working because people have been going to him for years, and they trust him, and they trust his advice. They know that he does more than just type a few labels and stick them on bottles. They know they can trust him.

This pharmacist cannot get locums. He cannot get graduates coming out of pharmacy school to work for him, because instead of earning just $65,000 a year, which is the average, I am told, that well-qualified pharmacy graduates can expect to earn in this country, they can earn A$90,000—in other words, some real money. They can earn $90,000 a year in Australia, just like that. These health professionals do not want to stay here, under this sort of Government. They do not want to stay here, talking about stat dispensing and nonsense like that.

These people have shown me what is happening. I go around my electorate and I see what they are doing, just as I go around the Hon George Hawkins’ electorate and find out what he is doing, which is not much. They have shown me the boxes and boxes of drugs that elderly people routinely have. I think now of my dear departed mother, and the huge boxes of drugs that she used to take. It was very, very confusing, even for a woman as intelligent and vibrant as her. She used sometimes to get a bit confused, and would have to make a little list of what she had taken and when. That is quite normal. A lot of older people, particularly if they have had strokes—a lot of elderly people have a series of strokes—find that their memory becomes a little less reliable.

These pharmacists are such professionals. They put the drugs in little bubble packets, put dates on them, and go to a tremendous amount of effort. And what does this Minister do? She lets Pharmac rob the pharmacists. She lets Pharmac get away with it. She lets Pharmac actually say to the pharmacists: “We don’t care if you have extra work; we’re not going to pay you.”

I rise to speak to Part 9, “Amendments to Medicines Act 1981”. I would like to address my Supplementary Order Paper 98, which seeks to make an addition to clause 254. Basically, as Lynda Scott mentioned previously, it seeks to prevent the Government—district health boards and primary health organisations—from coming in and taking over pharmacies throughout the country, and turning pharmacists into State employees.

This Supplementary Order Paper is indicative of a growing problem within the health sector. It is the Government’s intention to nationalise or socialise the health sector, and we are seeing it with the primary health organisations. They are umbrella organisations that are being set up around the country. General practitioners are certainly being encouraged to join them, and the incentive is there to do so, because if they do not, then they miss out on cheaper health-care for their patients. The intention is for health care eventually to take this form everywhere in the country, and for general practitioners no longer to own their practices. The Minister of Health has made no secret of the fact that she wants pharmacies to be part of public health organisations. She has made very encouraging noises and wants pharmacists to participate. As yet very few have. I think only a handful of pharmacists have gone in with primary health organisations, but the Minister has certainly made her intention well known.

It is a shame that the Minister does, in fact, have such contempt for the health professions. As I mentioned previously, the Minister’s comments on the front page of Pharmacy Today a few weeks back were very revealing. She said that pharmacists are not real health professionals because they have diversified; that they sell gifts, sell cameras, and develop photographs, and that means they are not committed to providing health services for the community. Anybody who has had any dealings with pharmacies, or regularly attends pharmacies, of course would not agree with that, at all. My Supplementary Order Paper is to prevent the Government from coming in and taking over pharmacies, and in fact turning pharmacists into State employees.

The pharmacists have been under siege of late, and have been subject to concerted attacks on several fronts. It is no wonder that we see a shortage of pharmacists in this country. Like other health professionals, they are heading overseas to greener pastures where working conditions are better, where ownership is better, and where they can certainly earn a lot more money. In this country we are seeing the socialisation of health services. Certainly, one is encouraged to be part of a group rather than to own one’s own business. Small business is the backbone of this country and should be encouraged. Owner-operators, particularly, have provided a great deal to the economy of this country, and my fear is that the pharmacists will join those groups that are being really discriminated against because of increasing compliance costs, more and more difficulties in owning one’s own business, red tape, and all those things that make it very difficult to make one’s own living. My Supplementary Order Paper seeks to address that.

I too would like to speak particularly in relation to pharmacies. The Green Party was extremely pleased that we managed, at an earlier period in time, to stop provisions that were originally in this bill that would have completely deregulated pharmacies. But it does seem to me that what we may be seeing—and we can start to see this pattern emerging, and this bill is part of that pattern—is the Government trying to deregulate or get rid of pharmacists in a more indirect and covert way.

This bill has some quite good regulations on the ownership of pharmacies. They all look well and good until one notices that one of those little provisions allows the Minister of Health to recommend, by the making of an Order in Council—a secret provision that we continually see slipping into legislation now—the exemption of any pharmacy from all the regulations contained in this bill. We did manage to get some amendments to this provision during the Health Committee hearing, and I am pleased about that. Before the Minister makes her secret Order in Council she has to be convinced that health services will be improved, that the change is necessary to meet the needs of the community in that particular location, and so on and so forth. So we did give some parameters to this sweeping exemption by Order in Council.

But, nevertheless, we do have concerns that there may be a hidden agenda at work here. It is a great mystery to me why this Government seems to have a hidden agenda to undermine the pharmacy sector in New Zealand. I cannot understand it. I have tried to work out what is really going on here. It may just be that the Minister has had a fight with the pharmacy sector, and as a result has decided that it needs to be got rid of or undermined. I am not sure.

Anyway, what is worrying me, as Lynda Scott pointed out previously, is that stat dispensing has wiped out 30 percent of the revenue of pharmacies. Can members imagine wiping out 30 percent of the revenue of MPs, taking off 30 percent of our income, or wiping out 30 percent of doctors’ incomes or the incomes of anyone else? There would be an uproar. But, no, we just quietly wiped out 30 percent of the revenue of pharmacies. So, inevitably, there will be a demise of rural and community-owned pharmacies in particular. It might take a year or two, but very soon we will see them starting to go into receivership, as Judith Collins has said, and close down in various parts of New Zealand.

What will we do then? Well, under the provision in this bill we will start replacing the small, owner-operator pharmacies in New Zealand, which have been in existence for decades and decades. One would have thought the Government would support small, owner-operator businesses, but, instead, it will shut them down and will replace them with primary health organisations. Clearly, that is the underlying agenda here.

One of my concerns about that is the potential conflict of interest. On the one hand a primary health organisation doctor will be prescribing medicines, and on the other hand a primary health organisation pharmacist will be dispensing those medicines. There has always been a very clear distinction between the writing of pharmaceutical scripts, the prescribing of medicines, and the dispensing of medicines, for the very good reason that there are huge potential conflicts of interest, because a good way of making money would be to prescribe a great many medicines, which are subsidised, and then dispense them. But there are other conflict of interest issues as well. I do have concerns.

Let us talk about consumers for a change, rather than suppliers. We want to make it cheaper for New Zealanders to get prescribed medicines and to enable them to buy over-the-counter medicines, like cough mixtures and flu tablets, more cheaply. We can all agree that that is a good goal, but Part 9 still provides a privileged position for pharmacists with regard to pharmacy ownership. Despite 15 years of attempts to deregulate and open up the ownership of pharmacies, the monopoly provisions continue. I still cannot believe that we in this country deliver that privilege to 931 pharmacists, rather than concentrate on supplying the best service to customers, particularly to those people who want low-priced drugs—children and the elderly, who are the ones most in need of them.

No other professional body in New Zealand has that kind of protection. Any one of us can own a doctors’ surgery or a drug warehouse, but only a pharmacist can own a pharmacy. That is wrong, because it creates an artificial monopoly that jacks up prices and lowers the level of service. I ask the Government to support my amendment that deregulates the ownership of pharmacies in New Zealand, because that will provide a better service and lower-cost drugs.

I tell Government members that I am not a lone voice in saying that. The Consumers Institute, hardly a bastion of right-ACT thinking, says that the current privileged and protected status of chemists shops prevents consumers from benefiting from lower prices and extended operating hours. Government agencies, ranging from the Ministry of Health to Treasury, the police, and Te Puni Kōkiri, all say we should get rid of the pharmacists’ monopoly, and that is what my amendment does. It removes the ownership provisions, and it ends the privileged status of chemists.

Of course, dispensing and selling medicines requires high professional standards, and those will be retained. A licensed pharmacist will always be required to operate a pharmacy. No matter who owns the pharmacy, a licensed pharmacist will always be there. My amendment contains a number of consequential amendments that are required once the ownership restrictions found in new sections 55A to 55G, inserted by clause 252 of the bill, are removed. But those are technical details. I hope the Committee sees that this amendment of the bill is comprehensive.

It is time that we stood up for the consumers in all of this. My amendment will answer the health Minister’s own concerns. The Minister of Health was quoted last month in the New Zealand Doctor as follows: “If pharmacists just sold things related to health care, it wouldn’t be so offensive, but they run Lotto outlets, they sell cameras, gifts, and you name it. They’ve turned themselves into retailers of anything they like, but they’re opposed to other retailers having a pharmacy outlet in their organisation.” I agree with the Minister. On top of that, I say that a pharmacy located within a supermarket will deliver cheaper medicines to lower-income New Zealanders, at a venue where, and at times when, they can access them.

I have another quote from the Minister of Health, again from the same publication: “Everyone knows it is a nonsense. As long as you’ve got a pharmacist dispensing, that’s what’s important, not who owns the building.” I find myself at times agreeing with Annette King, and I agree with her on this matter. Let us end this ridiculous anomaly. I urge Government members to vote—

💬 Hon Annette King: What about those ones?

The National Party is all right. I urge the Labour Party to vote for working people, for our elderly, and for our young people, so that they can access low-priced drugs in extended hours. Let this Parliament stop protecting 931 privileged suppliers who have a monopoly. We have done so everywhere else. I say to the Minister that we even did that for the dental nurses.

💬 Hon Annette King: They were never regulated; it was the dentists.

The dentists; I am sorry. We did it for the dentists, and the consumer benefited from that. We have done it elsewhere in the economy. Let us in this Committee fix this monopoly tonight. I ask members to please vote for my amendment.

STEVE CHADWICK (NZ Labour—Rotorua): I move, That the question be now put.

Thank you, Mr Chairman, for the opportunity to speak on this part of the bill. I must say—

💬 Hon Dr Michael Cullen: The late night port.

The late night port? What an odd remark, but it has come from the left and that is totally appropriate. We have just heard Dr Rodney Hide talking about—I am sorry, Rodney Hide; we will not confer an honorary doctorate on him.

💬 Hon Dr Michael Cullen: No, it was Dr Jekyll and Mr Hyde.

Maybe that is more appropriate. We have heard Mr Hide talk about consumers, and that is absolutely right, because when it comes to pharmaceuticals we want to make sure there is safe dispensing. The whole point of this bill is to protect the public. That is absolutely vital, and it depends very much on the professionalism of pharmacists. This bill has been all about quality assurance, continuous quality improvement, and peer review. All those things will hopefully ensure that there is safe dispensing and that the consumer will be protected.

There has been great concern amongst pharmacies throughout the country over the last few months, particularly out in small towns and hamlets like Port Waikato. That pressure has undoubtedly been influenced enormously by the dispensing change that the Minister has ushered in. I realise that the Minister will once again get that toothache—that Pavlovian response—and say it was not him but Pharmac. But undoubtedly the change has put huge pressure on pharmacies throughout the country, and particularly, as I say, in the country areas. Pharmacists have frequently come to me and expressed their concern about the fact that the smaller pharmacies, in particular, may go out of business. They have been concerned about their trainees, and about the flight of young pharmacists to Australia. There is no doubt that it has had an incredible effect on them.

One aspect of this issue has been the gradual and stealthy nationalisation of the health system under Labour. For example, there has been the establishment of the 21 district health boards and the extraordinarily inequitable primary health organisations. I think it is absolutely appropriate that Heather Roy has brought in Supplementary Order Paper 98 to ensure that the primary health organisations are not able to buy out pharmacies throughout the country. That is absolutely right and proper, because the basis on which the primary health organisations are structured is totally inequitable. That is yet another reflection of this Labour Government’s stealthy nationalisation of the health services in New Zealand. Today the Press Club was addressed in Wellington by an English psychiatrist who said how bad the situation was in Great Britain, yet that is the very model that Dr Cullen and Annette King are trying to emulate in New Zealand. The health system is becoming worse and worse in the UK, and it will become worse here for New Zealand consumers because of what those Ministers are trying to do. However, I think that Heather Roy’s amendment is absolutely right and proper.

There is another characteristic that I think is worth mentioning in this debate, and that is the fact that Pharmac does dominate the situation in New Zealand. If we are to consider making major changes at some stage, we will probably have to think about removing the commercial protection of Pharmac. If we are to think about getting free-trade agreements in the long term, that is one of the things that we will have to think about. There is no doubt that the market in New Zealand is hugely distorted, and that is one of the effects of the dominance of Pharmac.

I have been waiting for Part 9 of this bill for a long, long time. I will begin by thanking Rodney Hide for his honesty, and for having the courage to put forward an amendment that he believes in, and which his party stands for. He was prepared to stand up in this Committee and support that amendment.

I say to Mr Hide that the comments he quoted from me were absolutely correct. I firmly believe them. I would have very much liked to deregulate pharmacy ownership. I tried very hard to deregulate pharmacy ownership before the last election. I went along to the Pharmacy Guild’s conference before the election, and said that I was very keen to deregulate pharmacies. I did not think that one needed to own a pharmacy in order to be a good pharmacist; I thought that one needed to be competent, with the skills to be a pharmacist. I said that I would like to deregulate pharmacies, and I was followed by one Bill English. When Bill English spoke at the Pharmacy Guild’s conference, he said National did not support deregulation. He said that there was a safety issue in doing that, and that National opposed deregulation.

One could have knocked me down with a feather, because I happen to have 1998 Cabinet papers in my possession, and who signed those papers? A former Minister of Health named Bill English. What did those Cabinet papers state? They stated that pharmacies should be deregulated. Those papers were also signed by Mr Luxton, who was an honest member of Parliament. He said pharmacies should be deregulated. Those members said that there were no safety issues in doing that, and that we ought to deregulate pharmacies. What happened then? We got a little close to the 1999 election, so they then put in a deferral proposal to Cabinet, and that was in place until National lost the election. Now, before the next election, National is opposed to deregulation.

The story has not stopped—this is very funny—because Rodney Hide has put forward an amendment. Mr Hide, who is an honourable man, has told me that the National Party will support his amendment. National was in favour of deregulation—flip. Then it was opposed to it—flop—and what has happened? Now it is in favour of it again. There is another flip. National is the flip-flop, finger-in-the-air, which-way-is-the-wind-blowing party. What a lot of cant we have heard from that party. If any New Zealander wanted to know about a party that could not stand on its principles, that person should look at the National Party. Now National is in favour of deregulation again, and Mr Hide has said that National Party members will vote for his amendment. How could one trust them on absolutely anything? One could not. At least ACT, through Mr Hide, has had the courage of its convictions.

No members of the National Party had the courage to even speak to the amendment. They want to vote for it, but we should not ask them to speak to it, because they just want to pretend that they are in favour of it to some of their constituents. But when those members are talking to their pharmacists, they are real lions. They say that they have real courage and that they stand up for pharmacists. When they are talking to their business people, they say that they stand up for them. One would not know where they are.

I say to Mr Hide that I am sorry I cannot vote for his amendment, and neither can our party, because when we introduced this bill we gave a commitment to pharmacists that we would support 51/49 percent control.

Progress reported.

The House adjourned at 9.56 p.m.