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PHARMACY LICENSES
– An Attempt to Smudge the Issues
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Benny Borg Bonello
I refer to the letter by Mr Mario de Bono,
President of the GRTU’s Pharmacy Sector, regarding
Pharmacy licences (The Times 8th January 2004.)
Part of Mr de Bono’s letter dealt with
issues pertaining to Pharmacy licences. Other parts were
just a deviation exercise full of innuendoes and baseless
assertions.
Mr de Bono reasoned that since the
Consumers’ Association was not a party to the agreement
reached between the Government, the GRTU and the Chamber
of Pharmacists, then, we have no right to be consulted.
This, unfortunately, shows the limitations within which
the GRTU seems to conceive most issues. They believe they
have a right to determine who has interests and thus who
should be excluded. He also asks why ‘suddenly’ the
Consumers’ Association declared itself an interested
party. The Consumers’ Association had taken this stand
since 1998.
Apart from that wherever consumers’
interests are involved, consumers, both at individual and
organisational level, have a right to be involved, even if
they are excluded by the powers that be. This is
something that is accepted everywhere, though it seems
that this is not accepted locally, ie. by both the GRTU
and the Ministry of Health. This reminds me of other
times and occasions.
Mr de Bono mentions a survey, which I
cannot refer to, as I do not believe it was published.
However, the present issue at stake is RESTRICTION TO
ENTRY into this sector. In order to test this, the
relevant questions to consumers should be:
Are you in favour that an entrepreneur,
once s/he abides by the regulations, should be allowed to
open up a pharmacy wherever s/he wants?
Would you be better off, if more pharmacies
were to open up in your locality?
I hope that the survey asked these
questions. I am sure the public would be interested in
the results to these questions.
The fact that in Malta there are more
pharmacies per head than other European countries does not
negate that if more pharmacies are available, then
consumers are better off as they have more choice. It
only shows that where choice is involved, other countries
are worse off. The fact that the UK consumers’ watchdog
was against liberalisation of pharmacy licences does mean
that, within the UK structure, they believe that that is
the most suitable environment to do so. We believe that
the opposite is necessary in Malta especially as we do not
have a structure similar to that in the UK, which includes
the Office of Fair Trading, with an extensive surveillance
network and teeth to bite especially the right to withdraw
licences.
Mr de Bono then tries to smudge the real
issue. As I said the real issue is that restricting entry
into the market would restrict competition. This would be
especially so, if the restriction is by geographical
criterion. We would certainly not ask the Government to
restrict other sectors. What we are asking is to open up
this sector to competition by not restricting entry.
The assertion made that ‘the best interests
of the consumer are not served by having competition that
will ensure that the fittest survive, in a restrictive
environment’ reminds me of the reasoning that was
prevalent in the eighties. Mr de Bono seems to be still
engulfed within the frame of mind prevalent during those
times. The opening up to competition, in most sectors, led
to lower prices and better service since it made business
operators improve greatly their show. Yet Mr de Bono
wants us to believe that having more pharmacies would mean
that prices would shoot up! It is the restrictive
practices, especially restricting entry, that would result
in quasi monopoly situations. In such situation business
would be in a position to impose on the consumer the
conditions that he/she desires, including price increases
as the consumer would have no choice.
However, as I entitled the previous letter,
we believe that both competition and standards are
necessary. If Mr de Bono is yearning for higher
standards, then, we are all for it, and would support the
GRTU actively, as long as they are applicable to all and
are not designed to restrict entry. As I said in my
previous letter these standards must be applicable to all,
even though we realise that certain standards for the
present operators might need an adjustment period.
That is why, while urging the Minister of
Health to be more specific and make it compulsory to have
pharmacies accessible to all, even people with special
needs, we also advised that an adjustment period of one
year be given to the present operators to reach the
desired standards. In spite of what Mr de Bono said
regarding upgrading of premises, most pharmacies, for
example, are not accessible to people on wheelchairs.
Regarding ‘encouraging’ young pharmacists
to open up new enterprises, yes, I do encourage them.
There are two reasons. First, I believe that the young
pharmacists are well trained and have the motivation to
provide a very good service to consumers. Second, I do
believe, similar to what the GRTU used to believe some
time ago, that the SME are a very important factor in any
economy. Restricting entry means denying these young
pharmacists the opportunity to provide a service and be
successful while it would be restricting the number of SME
in Malta to the detriment of both consumer and the
economy.
Mr de Bono wrote that ‘very few or no
applications (are) for pharmacies in areas not presently
enjoying a pharmacy’. This shows that those who applied
for a pharmacy licence still believe that the market in
the ‘restricted’ areas is still not saturated. More
pharmacies in these ‘restricted’ areas would mean more
choice. Once these ‘restricted’ areas become saturated, I
have no doubt that applications would be submitted for the
other areas.
Mr de Bono is willing to grant licences to
places where there are no pharmacies. This statement is
an admission that, for the GRTU, licences can be made
available as long as they do not provide competition to
the present operators.
If ‘it is a perennial problem of pharmacy
owners to employ pharmacists’ restricting entry would make
the problem much worse as students would get the message
that this sector does not provide them with the benefits
which are due to them. Mr de Bono admits that no single
graduate from this year’s batch wanted to work in a
community pharmacy. It would be pertinent to ask these
young pharmacists why? It would be pertinent to ask them
also if they would consider working in a community
pharmacy if they are given free entry into the market.
Now I refer to parts of the letter, which
were full of innuendos and were nothing but an attempt to
smudge the real issues at stake. First, there is the
assertion that ‘it is a well-known fact that Mr Borg
Bonello has access to University resource’. I would like
to make it plain and clear that I use the University
resources only in my professional capacity. The
information that I use for other interests, including my
voluntary work, comes from public sources. If Mr de Bono
wishes to imply otherwise, he should be clear, so that I
would have the chance of defending my name.
Regarding whether or not we have the time
and are ready to put the effort to check facts, we can
assure him that we have both, as we have the motivation to
defend consumers’ interest especially in such vital
services. However, checking facts regarding this issue
was relatively easy because of the number of telephone
calls I received providing me with other aspects about
this market which really have not yet emerged publicly.
Then Mr de Bono started making innuendoes
with reference to the Consumers’ Association. I will
answer because this gives me a chance to make your readers
more aware of our Association. First of all, ours is a
voluntary organisation, and we do not receive any money or
resources to run our organisation from the government.
It is the only organisation, not because it
was designed that way or because we try to restrict entry,
but because of many cultural factors. The Association is
not afraid of competition. That is why we sought to
reduce the number of members needed for recognition.
Otherwise we would have sought to raise the membership to
make it easy for us but present a hurdle to new
organisations.
Moreover, we have been trying to set up
autonomous consumer groups in all localities for years.
In fact, some two months ago, we, in collaboration with
the Consumer and Competition Division, organised a public
talk by an overseas expert especially designed to improve
networking and involve the local councils in the evolution
of these consumer groups.
The Association, to sustain its recognition
at law, also submits yearly the information required to
the Consumers’ Council on which there is a representative
of the business sector. These include names of members as
well as their identity numbers. I admit that we are
against the latter requirement but since it is a
requirement for recognition, we collect it and forward it
to the competent authority.
The Association’s Council is made up of
volunteers and they come from the whole political
spectrum. Their common interests are to promote
consumers’ interests and see that consumers get a fair
deal. We support the development of the business sector
as this provides a service to consumers. We support those
who are innovative and give the consumer his due, those
who are not afraid of competition and those who work
towards a level playing field.
We have always made it a point to open our
doors to all, except of course to people who have a
business of their own for the simple reason that,
otherwise, conflict of interest arises. Mr de Bono
asserts that ‘on the pharmacy licences issue, (the
Association) has its own hidden agenda. Our agenda is
simple. We believe that competition and standards are
essential to ascertain that the consumer gets a fair
deal. We are worried of the persistent trend to try to
restrict competition on the grounds that the local market
is small. It seems to me that there are many who though
highly critical of the eighties, yet they yearn for the
protection against any type of competition it provided
them. This trend has persistently increased, in the
recent months, especially after the visit of the MV Doulos
to Malta. Moreover, this attitude is being pushed to most
sectors to the detriment of consumers. At present we are
also worried about whether somebody is pulling the strings
to restrict importation of vegetables in order to keep
prices high. On our part, we would use all resources to
work against this trend in all sectors. As I have said in
my original article, we have written to the Consumer and
Competition Division and also to the DG Competition in
Brussels. We will endeavour to have a competitive market
where standards established are adhered to and where
consumers have choice.
Then Mr de Bono questioned why the
Consumers’ Association did not comment on the recent hike
in the VAT rate. As I said to The Times some days ago,
the Association does not agree to anything that restricts
the consumers’ purchasing power. But the Association will
not be pushed or instigated to take action to serve
interests other than those of the consumers. As we did in
the past, we will not get ourselves involved in issues
that fall within the political domain for the simple
reason that we do not want to divide the consumers’
movement into the usual political divisions.
Unfortunately, the VAT issue, in Malta, still is in the
political domain.
But this does not mean that we are not
concerned or that we have not done anything. In fact we
had written to both the Parliamentary Secretary and the
Director General of the Consumers and Competition
Division, to use the government resources to see that no
price hikes will result. In fact the latter assured us
that the Division has already taken steps to safeguard
against this happening. On our part we would do our best
to monitor whatever we can. The consumers, on the other
hand, are urged to contact us if they notice any
unauthorised price hikes.
As I already indicated, I was not happy
with the parts of Mr de Bono’s letter as it was an attempt
at shooting down the messenger. However, this usually
happens when the one does not like the message or when one
knows that one is losing or else when one realises that
one has already lost the argument.
There is one point of satisfaction.
Consumers on their own, unlike what happened in the past,
are voicing their opinion. This is a very important step
forward, because our strength would only gather once
consumers are ready to ascertain their voice and their
interests.
9th January 2004
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