Sunday, 18 February 2018

Pharmacy smokes

Pharmacies in New Zealand aren't the most competitive. We have a bizarre rule requiring that majority ownership of any pharmacy must be held by a pharmacist. It's just dumb. We don't require that restaurants be owned by trained chefs; we don't require that bookstores be owned by licensed authors; we don't require that vegetable shops be owned by registered farmers with a Bachelors in Agricultural Sciences. 

But only a pharmacist can own a pharmacy because somehow training as a chemist is exactly what you need to be able to run a retail operation.

All that's to say that there can be rents available in pharmacy because of stupid entry restrictions.

So Otago went and surveyed 30 Wellington pharmacies asking them if they'd like a monopoly on cigarette sales. Otago University wants to ban cigarettes everywhere, and the path to doing that can involve making it a hassle to get cigarettes. So making them available only in pharmacies can be part of that.

Pharmacies have some local monopoly power given the entry barriers caused by the ownership restrictions. Their markups on cigarettes could consequently be a fair bit higher than that seen at the local dairy.

And despite that, pharmacist support for selling smokes wasn't all that high.
Pharmacies may consider selling tobacco to help achieve New Zealand's "bold measures" of being smokefree by 2025, a research survey finds.

The small-scale University of Otago survey asked 30 Wellington pharmacies in 2015 if they would consider filling the void of tobacco sales if they were phased out in supermarkets, convenience stores, petrol stations and tobacconists.

It was a very likely option for 20 per cent of participants, but the majority of pharmacists said they were somewhat likely (43 per cent) to sell tobacco if the strategy was proven to be effective elsewhere.

However, pharmacists were concerned the sales could decrease safety through tobacco-related crimes like robberies and staff abuse, increase foot-traffic and work-load, and potentially damage the "health professionals" image of New Zealand pharmacies.
I don't get how a survey of 30 pharmacies asking them whether they'd like to be the sole suppliers of cigarettes gets to be a peer-reviewed journal article.

But it is kinda interesting that places that hold all kinds of high-demand products - all the prescription narcotics - and already have security measures in place for those restricted drugs, are scared to stock tobacco because it would make them a target for robberies.

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