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June 28th, 2012

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Competition authorities have appealed to the government to act to force the nation’s chemists to deregulate their industry.

In a letter to the Health and Business ministers, Konkurrencerådet proposed that chemists’ state-sanctioned monopoly on the sale of pharmaceuticals should come to an end.

“We can’t find any worthwhile argument against liberalising this industry,” Agnete Gersing, the head of Konkurrence- og Forbrugerstyrelsen, the nation’s highest consumer watchdog, and the parent authority of Konkurrencerådet, said.

Under current laws, pharmacies must be owned by chemists, and there are limits on the number of pharmacies a single chemist may operate. According to Konkurrencerådet’s recommendations, those laws would be repealed as part of a deregulation of the market. Instead, any individual or company would be allowed to open a pharmacy, provided it was staffed by qualified pharmaceutical professionals at all times.

Konkurrencerådet based its recommendations on a study that found Denmark had Europe’s most restrictive pharmacy regulations, and as a result fewer pharmacies per capita than other European countries.

Should Denmark implement the same level of liberalisation as other European countries, the increased competition, the report concluded, would save consumers 250 million kroner annually on prescription drug expenses.

Konkurrencerådet’s call comes as a government-appointed panel that includes representatives from competition authorities, is already reviewing pharmacy regulations to identify ways the industry can be modernised.

Brushing aside the criticism, Niels Kristensen, the head of chemists’ association Apotkerforeningen, described the nation’s pharmacies as “a well-functioning system”.

“We’ve heard these arguments many times before,” Kristensen told Politiken newspaper. “But it’s pretty obvious that competition authorities aren’t taking into account the fact that it takes a healthcare professional to operate a pharmacy.”

One of the companies that stands ready to gain from liberalised pharmacy regulations is the high-street retailer Matas. Already the nation’s leading seller of over-the-counter medications and other health products, over the past year the chain has exploited a loophole in pharmacy regulations that allows it to sell prescription drugs by allowing a chemist to set up a drug dispensary inside its stores.

The company has already established 50 dispensaries, all served by a single chemist.

That move has irked Apotekerforeningen to the point where it has excluded the chemist, Danji Bhanderi, who is based in the Jutland town of Uldum, from its organisation.

The organisation is currently under investigation for its possible wrongful exclusion of Bhanderi.  

Meanwhile, Matas says it is ready to open full-service pharmacies as soon as the industry is deregulated.

In recent years, many rural chemists have shuttered as their customer bases shrink. And Henrik Engberg Johannsen, a Matas spokesperson, said the move would counter that trend.

He added that the company supported keeping safety regulations in place, but argued that with its network of 294 stores nationwide, Matas would be able to offer consumers better service without compromising on safety.