STATE CONTROL

Auckland Star, Volume LXIX, Issue 138, 14 June 1938, Page 8

STATE CONTROL

DRUG PRICES.

DOMINION SCALE,

EARLY MOYE LIKELY,

COSTS INVESTIGATED,

PHARMACY PLAN DEVELOPS. Since it was set up five months ago to control the pharmacy trade in New Zealand, under the Industrial Efficiency Act, the Pharmacy Industrial Committee has had before it a number of applications for licenses and for transfers of existing licenses, which, have involved to a considerable extent matters concerned with general policy. What is probably still more important, it has made an extensive analysis. of drug prices with a view to establishing a Dominion drug tariff.

"The committee has been very active since the members were appointed," says Mr. E. B. Myers, Director of Pharmacy, who is chairman of the committee, in a statement to members of the retail pharmacy trade. "Although the Bureau of Industry is the authority for the issue of licenses, it has adopted the procedure of first referring applications to the Pharmacy Plan Industrial Committee for recommendation, and decision on several cases was held up pending the appointment of the committee."

Mr. Myers states that the course adopted from the outset has been to obtain information by carrying out local surveys, and that applicants or objectors have the right to appeal against the bureau's decision. So far one appeal has been heard, in connection with a refusal by the bureau to grant a new license for a pharmacy at Mission Bay.

This suburb, one of the recently established residential distil jts of Auckland, is described as having a limited population where a pharmacist was alreadygiving good service. The bureau's decision was upheld, and the comment is made that "the benefit of the licensing I system in this case has been evident, both to the individual pharmacist already endeavouring to give an efficient service, and indirectly to' the consuming public." ' • Fixing Prices of Drugs. Another phase of the committee's activities concerns the control of the sale of drugs, and Mr. Myers states that this has been treated as of the greatest urgency, in an endeavour to submit a scheme to the Government for adoption before June 21. It is mentioned that the proposed drug tariff would come into force by. means of regulations made by the Governor-General-in-Council, and:

the committee must be able to justify the proposals from all points of view, particularly as they affect the public. "It will l be appreciated that tliis task • in itself is no light one,'' he continues. First the wholesale merchants had to be approached. Then time had to be given for them to make their, quotations. These figures had to be tabulated and compared in order to arrive at a basic coßt, price- for some 1500 items. In .arriving at such-a price, the committee must hear in mind that it requires to , fca satisfactory as representing the best terms that can be secured, and that the Government has to be satisfied on the same point." . ;• "Profit ; Percentages/' Discussing the questions involved, Mr. Myers says the committee has to take into - consideration the relation of the drug tariff to the service fees, in i. fixing the profit percentages to be-added to the drug costs. "What proportion 'Yj of.'" overhead/' he asks, "should be loaded on the drugs; and what proportion on the service fees? What drugs should bear a minimum percentage of - profit on cost because of quick turnover, and what drugs should bear a maximum of profit because of slow turnover, liability to spoilage and losses in handling and manipulation? "These are some of the factors to be taken into account, and, although in the personnel of the committee there V "' is represented a wide range of practical experience," the committee has not hesitated to co-opt the services of others who have specialised knowledge. ft has also the benefit of; guidance from the Department of Industries and Commerce, which has made available the services of ' a well-qualified cost accountant." Price ; Control Difficult. The statement adds that anyone with even slight knowledge of "the amount of thought that has been given in other countries to the problems outlined, and the various that have been developed overseas, will appreciate the anxiety of the committee to produce something which will be sound and equitable. : "The first tariff may not be perfect," continues Mr. Myers, "but it" will be produced on a sound basis. How to maintain* fair prices is no easy problem, but it must be solved. To sacrifice

legitimate prolit is the last thing that should be done in any business." : He tlieii_refers to the survey.' "Fast on the heelsSpi the drug tariff," he says, "will come Nthe survey. In making recommendations to tlie bureau the ;:> conin?ittc' c recognises the critical impor-iC4»»n«a-;Qf,ievery-i!aae, and feels reluctant \r -°w- fc '™ thout i the fullest information '| vlt ole of the pharmacejidesirous to. which

[ Questionnaire To Be Issued. J 'It is intended shortly to issue a questionnaire which will be very comprehensive in character, and wliich, when completed, will put the committee in a strong position to speak on the condition of pharmacy affairs anywhere in the Dominion. "Before the committee was set up, so much was merely guesswork or conjecture, and any private survey made was only partial, without giving a complete picture of the whole. The committee cannot speak with full authority unless it has full information which it can dissect and reassemble oil a statistical basis." Emphasising the importance of the survey, Mr. Myers said. "At every turn the committee feels the lack of information. It cannot prescribe until it has diagnosed, and it cannot diagnose until it has a chat with the patient. Any questions asked will be asked for good .administrative reasons and not out of curiosity. Much thought is being given to the compilation of the questionnaire, and when it is issued it is hoped that all concerned will give it prompt andj conscientious attention."

Ho describes the committee as the I "central agency" of all pharmacies and j pharmacists to watcli their interests, preserve their rights, give them inforj mation and service, and generally to co-operate in improving efficiency in the pharmaceutical business. Profession and Business. i "The profession of pharmacy is, perhaps, unique as an industry," he says, "in that the first essential is professional efficiency In the knowledge and practice of compounding and dispensing prescriptions. At the same time there must be an understanding of sound-business practice so that this section of the pharmacy may be profitably, yet economically, run. However, the necessity for business method and knowledge becomes more apparent when the pharmacist enters the shop or merchandising section of the pharmacy. His ability to buy and sell then becomes paramount, so that he may best meet the needs of the public, and, in fact, induce or recreate demands in certain directions. "The fact that he has a renovated or even brilliant shop is not itself evidence of efficiency, but is an indication of a step in that direction. It indicates awareness, and is more likely to be associated with systematic business methods than in a case where no effort is made to give the pharmacy an attractive appearance." Committee Without Powers. Mr. Myers states that no regulations have yet been issued giving the committee statutory powers and duties, and tlie provisional plan on which it has been working will not become a plan in reality until.regulations are passed and the functions of the committee are laid down. ' ;

In the general scheme for the rehabilitation of pharmacy must also be included, he adds, an improved Act to consolidate not only the professional standing of pharmacists, but to make clear what may or may not be regained by them as exclusively chemists' business, to enforce better, control of "quackery," to implement national health insurance, and for'other purposes.

Wlien the regulations are in final form', ho concludes that they will go before the Executive Council of the Government and if approved by the Governor-General will he gazetted.