SMC files bill to deregulate pharmacy business, chamber critical

Ljubljana – The coalition Modern Centre Party (SMC) has tabled amendments to the pharmacy practice act that would partly deregulate the retail pharmacy market, including by rolling back a ban on vertical integration of pharmacies and drug wholesalers. The proposal has been criticised by the Chamber of Pharmacies, which argues the existing rules are good.

In a legislative motion tabled earlier this week, the SMC said that adequate availability of drugs needed to be ensured to all persons under equal conditions.

“Deregulation could contribute to this. Experience shows that this is usually aimed at increasing the availability of drugs and lowering prices.”

The linchpin of its proposal is a loosening of criteria for the density of pharmacy chains, which is currently tightly regulated.

Under the proposal, it would be possible to open new pharmacies or subsidiaries within a distance shorter than 400 metres in urban areas and at least five kilometres in other areas.

The party would also like to eliminate the restriction under which only neighbouring municipalities can co-found public pharmacies, an issue that has cropped up several times in recent years as some municipal-owned pharmacy chains tried to expand to neighbouring municipalities.

As for vertical integration, it proposes that publicly owned pharmacy chains would be allowed to set up wholesale businesses, which it says would enable the public health sector to generate additional revenue and would have a positive impact on health expenditure by lowering the price of drugs.

At the same time, it would be easier for public pharmacies to operate, “which means that less public funds will be required for their financing”, the SMC added.

Under the current law, pharmacies are required to sell their wholesalers to put them on equal footing with the pharmacies which do not have wholesalers. The law was passed in December 2016 under an SMC-led government.

Since neither Lekarna Ljubljana nor Mariborske Lekarne have sold their wholesalers, LL Grosist and Farmadent, respectively, the deadline to do so has been extended twice, the last time in November 2019, until the end of 2021.

The Chamber of Pharmacies has criticised the proposal, saying that it would encroach upon the system it believes is currently regulated well.

Its president Darja Potočnik Benčič told the press on Friday that the existing act was suitable as it enabled all residents to get equal access to drugs and pharmacy services, and provided independence to pharmacy workers.

“It is illogical and unreasonable to change the act … as the changes significantly encroach upon the work and organisation of pharmacies,” she said, noting that the chamber had been excluded from the drafting of the changes.

When it comes to the criteria for distance between pharmacies, the changes would “bring chaos and disintegration of the pharmacy network, in particular in small towns”.

This is in complete contradiction with balanced regional development, as the opening of several pharmacies in urban centres would mean the closure of approximately the same number of pharmacies in the periphery.

Potočnik Benčič also said that the SMC argument in favour of deregulation – greater accessibility and lower prices – did not hold up considering the experience of the EU member states that deregulated the pharmacy sector.

Prices of non-prescription drugs did not fall, while greater use of such drugs was recorded, she said, adding that the prices of prescription drugs were meanwhile a result of healthcare policy and policies of pharmaceutical companies.