Australia’s anticompetitive pharmacy regime

The reverse takeover of Sigma Healthcare by Chemist Warehouse may yet win approval if Chemist Warehouse sells part of its store network in certain postcodes. The Australian Consumer and Competition Commission’s preliminary review raises legitimate concerns about the deal’s potential to “substantially lessen competition in pharmacy retailing”, and “lead to increased prices in pharmacies”.

But the competition policy ironies here are glaring. Chemist Warehouse has disrupted Australia’s “community pharmacy” regulatory quasi-monopoly. Its business model found a way around the regulations restricting the location of pharmacies and banning non-pharmacists from owning pharmacies, which have prevented supermarket chains from operating dispensaries in their stores.