by John Saywell - The IPG
Green Cross Health is right about one thing: community pharmacies can do more to relieve pressure on New Zealand’s health system. Its open letter to politicians called for pharmacists to treat more common conditions, support people with stable long-term illnesses, and receive better funding for that work.
Those are worthwhile objectives. But the debate needs to go beyond what pharmacists could do next. We must ask whether the pharmacies delivering care today can survive - and whether the reforms being promoted will strengthen local healthcare or accelerate it’s consolidation into fewer, larger corporate businesses.
The central issue is sustainability.
Asking pharmacies to take on more responsibility without fixing their structural underfunding is not health system reform. It is shifting work from one overstretched part of the system to another.
Fund the work pharmacies already do
Dispensing is not simply counting tablets and attaching labels. It involves clinical judgement, identifying medicine-related risks, resolving prescription problems, explaining treatment and helping patients use their medicines safely.
Yet community pharmacy’s core funding has not adequately addressed the costs of maintaining that service. Pharmacy sector groups have repeatedly warned that annual funding uplifts are insufficient to meet wage pressures. This undermines pharmacies’ ability to recruit and retain staff. Its position is supported by an independent review identifying substantial remuneration gaps across community pharmacy roles.[i]
From the perspective of independent pharmacy owners, successive funding rounds have eroded confidence that Health New Zealand’s contracting arrangements can deliver a sustainable service.
The National Annual Agreement Review - the NAAR process - is supposed to provide a mechanism for reviewing the agreement with Health NZ. Currently, the Independent Community Pharmacy Group is seeking a High Court declaratory judgment to clarify contractual obligations surrounding that process. That is not a court finding that Health New Zealand has breached its obligations. But it is a serious indication that owners believe the current arrangements are not working as they should.
We can’t assume that the retail shop will make up the difference. Pharmacy retailing traditionally helped support the clinical work behind the dispensary counter. That contribution is shrinking: the 2025 national pharmacy benchmarking survey reported average retail sales at less than 15% of total revenue, alongside growing financial challenges for smaller pharmacies.
Discount competition is part of the commercial environment owners must navigate. But a publicly funded health service should not depend on a local pharmacist selling enough cosmetics and supplements to make essential medicines care viable.
Ownership protections must mean something
New Zealand’s pharmacy ownership rules have a purpose. They require pharmacist majority ownership and “effective control”, and restrict a person or company from operating or holding majority ownership in more than five pharmacies. They do not, however, impose the same numerical limit on minority interests. That distinction helps explain how large networks can exist under the present framework.
The question is not simply whose name appears on a share register. It is who ultimately controls the business.
The 2023 High Court decision concerning five Countdown pharmacies demonstrated that this concern is real. The Court found that their licenses had been unlawfully granted because the arrangements did not give pharmacist shareholders the effective control the law required. Medsafe subsequently issued more explicit principles covering pharmacist ownership, board control and decisive decision-making authority.
That judgment did not establish that every pharmacy associated with Green Cross Health, Woolworths, Bargain Chemist or Chemist Warehouse operates unlawfully. However, it does establish why regulators must examine actual control rather than accept ownership structures at face value.
Corporate investment and pharmacist ownership are not automatically incompatible. But professional control must be meaningful - not a legal formality surrounding a business whose important decisions are made elsewhere.
More pharmacies do not automatically mean better access
A new pharmacy can improve access through longer opening hours, lower patient costs or a genuinely underserved location. However, adding another outlet in an already well-served shopping area is not the same as addressing an unmet health need.
Every additional pharmacy requires staff. Health New Zealand’s workforce analysis estimated shortages of around 1,000 pharmacists and 620 pharmacy technicians, while the Pharmacy Guild has documented recruitment difficulties, reduced services and substantial burnout.
When businesses compete for the same scarce workforce, policymakers must consider the effect on the whole network - particularly smaller towns and rural communities.
The pharmacy sector needs evidence about whether new openings improve access overall, or redistribute dispensing volumes and staff while leaving other communities more vulnerable. Counting shopfronts is not enough.
Technology must reduce work - not merely move it
Electronic prescriptions and better access to health information and automation can support better care. But digitalisation should not be confused with an automatic reduction in workload.
The practical question is whether technology removes tasks or adds another layer of checking, documentation and troubleshooting. Access to more information is valuable only when staff have the time and systems to interpret and use it.
The workforce evidence already identifies increasing administration and compliance requirements, alongside staffing shortages and pay, as reasons people consider leaving New Zealand pharmacy.
Before politicians promise an expanded clinical role, they should ask a straightforward question: where will the additional professional time come from?
Clinical services are welcome - but they need a viable funding model
Vaccination is a positive example of pharmacy contributing more to public health. But providing a clinical service requires trained staff, appropriate facilities, equipment, administration and time away from other work.
The same applies to consultations for common conditions. The expansion of funded medicines available directly through pharmacies from June 2026 is welcome. It creates another route to treatment without first obtaining a prescription.
However, a list of additional services is not, by itself, a sustainable business model. Eligibility restrictions, consultation payments, staffing requirements and the cost of maintaining capacity all matter.
Health New Zealand itself acknowledges that clinical pharmacy services have not been funded consistently and that many pharmacies still depend on medicines sales and retail products to remain viable.
If government wants pharmacy to become a more substantial part of primary care, it must fund the capacity to deliver that care - not merely announce permission to do more.
Beware the Trojan horse of policy change
My concern is that a persuasive case for expanded pharmacist care is becoming bundled with a much broader deregulation agenda.
ACT’s Pharmacy First policy combines expanded treatment and long-term-condition management with removing the five-pharmacy ownership cap and rules it describes as preventing new pharmacies from opening. Those are separate policy decisions, with different consequences. Supporting the first does not require accepting the second.
That is the potential Trojan horse: better access to clinical care at the front of the proposal, greater corporate consolidation behind it.
Hub-and-spoke dispensing which transfers dispensing to centralised hubs is a separate reform question already considered in government advice. Centralised automation may offer efficiencies. But the policy test cannot stop at cost per item.
Who owns the hub? Can independent pharmacies access it on fair terms? Who retains the funding? Who handles urgent changes, supply problems and patient questions? Who remains accountable when something goes wrong?
My concern is that, without safeguards, centralised dispensing could concentrate volumes and bargaining power in the largest companies while leaving local pharmacies with the relationship-intensive work and insufficient income to support it.
Legislation changes that support dispensing automation need not weaken local care. But we should not assume that the financial benefits will automatically sustain the pharmacist who knows the patient.
Protect the network, not just the transaction
A medicine can be delivered efficiently while the wider service deteriorates.
The value of a local pharmacy includes the onsite health professionals and their staff who notice confusion, question an unexpected change, recognise that someone is struggling, or help a family manage increasingly complicated treatment.
Those relationships should be measured and supported - not treated as an incidental extra attached to supplying a product.
We should be wary of repeating the experience communities associate with losing banks and post offices: an apparently efficient restructuring that leaves the public travelling further and doing more for themselves.
Before further deregulation, government should gather evidence from owner-operated pharmacies across New Zealand’s roughly 1000 pharmacy network. It must examine the total costs of safe dispensing, unpaid clinical work, workforce pressures, continuity of care, and the consequences when a local service closes.
That evidence should shape sustainable core funding, properly costed clinical services, workforce investment and ownership rules that protect genuine professional control.
Community pharmacy is a social service delivered through businesses. Commercial viability matters because care cannot continue without it. But that does not mean the best system is the one that channels the most prescriptions through the biggest provider - particularly where control and financial returns sit overseas.
Let pharmacists do more. Fund them properly to do it. But do not use that ambition to justify a market structure that undermines the local pharmacies on which equitable access depends.
The objective should be healthier communities - not simply larger pharmacy chains.
