INVESTMENT advisory firm, KordaMentha, believes the growth of pharmacy banner groups and franchises is making "the current restrictions on ownership and location appear increasingly antiquated".
In an update to its Nov 2018 Pharmacy: An industry at a crossroads report, KordaMentha reported that the sector has shifted from "a community based pharmaceutical dispenser to a landscape dominated by discount pharmaceutical and healthcare retailers", the company wrote in an article on Mondaq earlier this week.
The report noted that since 2011, large groups have developed a significant foothold in the community pharmacy sector.
KordaMentha noted IBISWorld Industry Reports - Pharmacies in Australia data showed My Chemist, the parent group of discount giant, Chemist Warehouse, now has the largest market share, 29.7%, while wholesaler, Sigma has seen its banner groups grow from 6.5% in 2011 to 20.1%, with TerryWhite Chemmart's (TWC) share now at 11.8%.
A Pharmacy Guild of Australia spokesperson told Pharmacy Daily that while the My Chemist group had cultivated a large market share, the number of pharmacies in the group was not as significant as a percentage of all community pharmacies in Australia.
"This is an interesting analysis of the pharmacy landscape," the spokeperson said.
"We certainly would not agree with the characterisation of the impact of pharmacy ownership laws, which we maintain have a clear beneficial effect for consumers."
However, KordaMentha said the growing market share of My Chemist, TWC, Sigma and Australian Pharmaceutical Industries banner groups, highlighted a need for reform of the ownership and location laws.
"Irrespective of the current laws governing pharmacy ownership, anecdotal evidence indicates major players have been able to build large networks of retail pharmacies despite such regulations," KordaMentha said.
"As major players grow organically and through acquisition, the current restrictions on ownership and location appear increasingly antiquated."
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