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21.08.2006

Pharmacists: Beware of Capitalist Locusts - IUF comment 20/2006

Sascha Tamm, IUF

The argument over the opening of a new DocMorris pharmacy in Saarbrücken is hardly a polemic one. The sides are clear. The privileged, which are a small group of pharmacy owners, should be defended against competition. However, the old arguments are so typical and have been thoughtlessly repeated by so many politicians, that a short analysis is necessary.  

 

1. "The quality of coverage is being harmed." The question regarding the structure of ownership is often confused with the obligations government has concerning safety, quality, environmental protection, etc. This question is often posed in connection with public property at which government is purportedly better equipped to fulfill its obligations. In this case, the assertion is made that only efficiently run pharmacies can ensure the quality of goods. You may regard the various forms of governmental regulations as you wish, but still these laws have to be followed without taking into consideration as to how companies are structured. For example, it could be stipulated that at least one licensed and certified pharmacist must be present in every pharmacy. This, however, has absolutely nothing to do with the structure of ownership.  

 

2. "We do not want follow the American model." According to some, following the American model would give rise to the sale of medicine in drug stores, unlicensed and unqualified personnel, etc. The reality is that licensed pharmacists also consult with customers in American pharmacies. This is also the case in approximately 40 percent of the pharmaceutical market, which is controlled by the major drug store chains in which medicine is sold in a special "pharmacy" area. Incidentally, the drug store chains are usually opened 24-hours a day, which is a service that is not currently offered by the customer-friendly German pharmacists.  

 

3. "Jobs will be lost." It is not a foregone conclusion, but it is possible. If pharmacy chains succeed in working more efficiently with fewer personnel while reducing their costs, it is possible that prices will become more competitive, which would be advantageous for the consumer. However, this argument is often answered in the following manner: If we can preserve highly qualified German jobs then it is worth spending a few extra Euros. However, what is being overlooked (or purposely ignored), is that the resources that are not being utilized could be used or set aside for other products or services. When governments protect inefficient practices, it preserves jobs in specific sectors for only a certain period of time. However, it not only hurts jobs in sectors lacking a fett lobby but also thwarts the creation of new jobs.  

 

4. "Universal coverage is no longer guaranteed." It would be surprising if pharmacy chains would not be able to economically survive in the same locations where privately owned pharmacies operate. Furthermore, no one wants to see privately owned pharmacies outlawed. And, for those who believe that the government has the responsibility to guarantee everything from railroad connections to pharmacies, even in small and remote areas: If a governmental premium is to be given for the operation of pharmacies in certain areas, then all competitors should receive the same treatment. In this case, the structure of ownership does not play any role.  

 

 

Author:  

 

  • Sascha Tamm, IUF

 

The IUF comment appears regularly as the voice of freedom. We're pleased with getting comments about comments.  

 

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