Is it profitable to own a pharmacy?

Pharmacies: Lift the ban on third parties and multiple ownership

Fewer main pharmacies, more branch pharmacies

The number of pharmacies decreased from 21,476 in 2005 to 19,432 in 2018. The share of branch pharmacies increased from 6 percent to 23 percent during this period. The German pharmacists have made good use of the branch operations that have been possible since 2004. The fact that it is financially worthwhile for pharmacists to operate several pharmacies is also an indication that several branches can be operated at lower average costs than a single branch.

Share resources

A lifting of both the ban on third-party ownership and the limitation of the number of branches would result in further advantages. Pharmacies could exploit economies of scale more extensively than before. Infrastructure for bookkeeping, human resource management, purchasing and storage, for example, could increasingly be used jointly by several pharmacies. The competition among pharmacists would ensure that customers also benefit from the resulting cost savings.

Price reductions are to be expected above all for drugs that are only available in pharmacies but not prescription-only. These are mainly drugs that are used for the short-term treatment of minor ailments and illnesses, such as headaches, toothaches or colds. In contrast to prescription drugs, pharmacies have pricing leeway for these drugs.

Ban on third-party ownership and multiple ownership: better care?

Proponents of the ban on third-party ownership and multiple ownership, such as the Federal Association of German Pharmacists' Associations, argue that the ban helps ensure supplies to the citizens. But patient care is not at risk. Lifting the ban on third-party ownership and multiple ownership would allow pharmacies to share infrastructure. The resulting cost reductions could even make pharmacy locations attractive that have so far not been profitable - especially in rural areas. A look at neighboring European countries makes this clear. In Norway, the ban was abolished in 2001. As a result, a significant improvement in the supply density could be ascertained - also in rural areas. In Great Britain there is no ban on third parties or multiple ownership and the supply is at a similarly high level as in Germany.

The quality of the advice is not at stake either, because it is not crucial that the owner of a pharmacy is a pharmacist and is always there. It would be sufficient to ensure the presence (physical or digital) of a pharmacist. Employed pharmacists are already looking after customers in main and branch pharmacies.

Pharmacies: a locust-free zone?

The proponents of the ban also argue that the ban on third-party ownership and multiple ownership decouples "(...) the supply of pharmaceuticals from third-party requirements that are exclusively oriented towards profit maximization, such as corporations (...)". The President of the Federal Association of German Pharmacists' Associations even pointed out: "Sick people are not consumers and therefore the pharmacy must remain a locust-free zone."

It is absurd to assume that pharmacists who provide capital to run their own pharmacy have no interest in the economic success of their company. That is not reprehensible either. As in other areas of the health system, the pursuit of profit is not fundamentally in conflict with the interests of the patient.

Open pharmacy market

The restrictions on pharmacy ownership are inefficient and result in higher prices for patients. The ban on third-party ownership and multiple ownership contributes just as little to better advice as it does to better care. The gradual deregulation of the pharmacy market that has taken place so far has not had any negative effects on customers. Patients have been advised in branch pharmacies for over 10 years - without having to accept any disadvantages. On the contrary: Rather, the increase in branch pharmacies probably contributed to the fact that the total number of pharmacies fell less sharply. Like other companies, pharmacies should be able to pool resources and use them together. A lifting of the ban on third-party ownership and multiple ownership is therefore urgently required.
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