It will soon be possible to buy your imported cheeses and pick up your Prozac in a one-stop operation — depending on where you shop.
This is the upshot of changes to regulations under the Pharmacy Act, which will allow non-pharmacists to own a pharmacy.
The long-awaited changes have been greeted with a mixture of mild enthusiasm, glee and excitement among the country’s leading retailers.
“The new regulations will help broaden access to medicine, especially in rural areas,” a pharmaceutical analyst said this week.
But he added: “Whether it reduces prices will depend on what the department [of health] does with pricing regulation.”
At the presentation of his company’s results recently, Pick ‘n Pay CEO Sean Summers said the group would examine its options once the regulations were formally adopted. But the group was not in a hurry to take the plunge as a “drug dealer”.
Two retailers which have voraciously lapped up the option are Shoprite Checkers and Clicks. Shoprite CEO Whitey Basson confirmed that “we will apply for a licence without delay”, and that the strategy would vary from employing pharmacists to creating franchises and joint ventures. All the outlets will be housed within stores.
Basson added that the group has thoroughly researched pharmaceutical products suitable for the mass market, as well as distribution channels and the administration of medical aid schemes in terms of payment.
The group hopes to leverage its position in the mass market, where it claims to enjoy a 60% share, to deliver to a broader, especially rural, customer base.
New Clicks Holdings, owner of health, home and beauty store Clicks, has been the boldest and most advanced in its plans. One industry executive earlier described the group’s plans as highly dependent on the regulation changes.
CEO Trevor Honeysett recently unveiled plans to spend R100-million in the next three to four years converting stores to accommodate pharmacies. The group’s approach is centred on its acquisition of Purchase Milton & Associates (PM&A), currently before the competition authorities. PM&A holds about 80 Link and Link Max franchises.
The group will then apply for between 20 and 25 licences for its 267 stores where PM&A does not have a presence.
This week, a Clicks spokesperson expressed confidence in winning approval for the PM&A deal. He believed Clicks would exploit its feminine chic, tapping into its 80% female customer base as “a destination store, where women want to be” rather than a food store, where “you go because you have to”.
The department is to finalise pricing regulations some time in the next year. Basson expressed confidence that the department’s focus would be on maximum rather than minimum prices.
A retail analyst, who asked not to be named, said he expected the department to identify a class of drugs that was most commonly needed and cap prices on those. He warned against any attempt to regulate the volume discounts that would be enjoyed by chain stores, as this did not “make commercial sense”. “It will prevent chain stores from passing on discounts,” he remarked.
What does this all mean for your corner pharmacy? Both analysts believe that although chain stores will have an edge in price, independent pharmacies will continue to enjoy the advantage of “personal service and relationship”.
A pharmacy owner, who also declined to be named, expressed apprehension over the new law, but also voiced confidence that if it was carefully implemented, there was room for old and new druggists.
“If the licence conditions — of showing a need for service and looking at what is available in the vicinity — are enforced, there will be room for all of us to operate.”
The pharmacist owns three pharmacies in downtown Johannesburg and the upmarket north. He believes support from the community and the level of attention paid to individual customers will help him maintain an edge over the competition.