June 2002 issue Pharmacy Today magazine

CONTRACT DEBATE

The Pharmacy Services Contract faces further debate after the Pharmacy Guild withdrew its Commerce Commission application.

Last month, the guild halted its application to have the draft national contract exempted from anti-competition regulations under the Commerce Act.

The commission had earlier released a draft determination declining the exemption on the grounds that it is not convinced public benefits outweigh the "competitive detriments.

There were two parts to the guild's application - one relating to pharmacy services under the draft contract - the second relating to future agreements, allowing the guild to enter a "head agreement" on behalf of its members, with the ministry and DHBs.

The commission's preliminary assessment found both parts held a cost to the public through loss of competition of between $130 million and $182 million.

The commission was scheduled to hold a public conference on the issue early this month.

No breach

Guild chief executive Murray Burns says the guild does not aggree with all of the commission's conclusions and, in terms of core services, he believes pharmacy has not breached the Commerce Act.

The decision to withdraw was made after seeking legal advice, he says.

The commission's draft determination has been "helpful" and provides a guide to further negotiations with the ministry over the draft service agreement template, he says.

The ministry and DHBs are now considering the commission's preliminary findings and reviewing their situations in light of the guild's application withdrawal.

Director-general for DHB funding and performance Gordon Davies says the administration of existing contracts has been possible because of the goodwill of pharmacies, DHBs and the ministry. He wants that goodwill to continue while the ministry assesses the current situation.

The draft determination can be downloaded from

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