Policy proposal presented by the parliamentary representatives of the ruling Law and Justice party will restrict the number of new pharmacies and reduce growth and investments – pharmacies in countries with liberal legislation invest more. Polish economy needs less regulation and more investment, which has been noticed even in the speeches of Deputy Prime Minister Mateusz Morawiecki. Therefore, Law and Justice’s policy regarding pharmacies is in contradiction to the Polish government’s declarations and plans to promote higher economic growth.
According to the legislation proposed by Law and Justice, a permit to establish a new pharmacy will not be given if a municipality has less than 3,000 inhabitants for one pharmacy, if this pharmacy is built in a distance less than 1 km from another pharmacy and if a person who has established the pharmacy is not a pharmacist. The first requirement makes it almost impossible to build a new pharmacy in many parts of Poland. These new regulations are against the European liberalization trend – in the recent years, 17 countries decided to liberalize their rules about establishing new pharmacies and only 4 countries implemented new restrictions.
There are already far too many regulations in the pharmaceuticals market in Poland, which is harmful, especially for the patients. Regulated prices of refunded medicines make it impossible for market forces to establish the real market prices of these substances. Ban on advertising of pharmacies reduces competition. Moreover, it prevents pharmacies from offering new health services. Prohibiting pharmacies from selling prescribed medications via Internet decreases accessibility to drugs which is, in turn, harmful for customers – mostly in villages and smaller towns. Moreover, the regulation saying that if a legal entity has more than 1% of pharmacies in a province it cannot establish a new one is also harmful for competition.
In a long run, the proposed policy will decrease productivity of pharmacies. The best way to increase investments and improve quality of services is promoting competition. The new regulation will lead to higher prices and lower standards of services so patients will be worse off. The accessibility to medication will not increase. It could be improved if large pharmacy chains were free to do trade and therefore could lower total costs of running a pharmacy.
For pharmacist who do not own any pharmacy, limiting development of pharmacy chains will lead to slower growth of salaries and negative impact on employment. It is so, because decreasing number of new pharmacies will lead to lower demand for pharmacists. Moreover, the new regulations will implement barriers for development for the owners of a single pharmacy. Pharmacies’ values will slump because only pharmacists will be able to buy them. Furthermore, moving to other location will not be possible with the proposed regulations.
The Constitutional Tribunal rejected the legislation proposing “pharmacies for pharmacists” in 1992, thus the regulations proposed by Law and Justice can violate the Polish constitution. Finally, the proposed policy is harmful for the people who bought pharmacies when they were privatized after transformation as they will not be able to develop their businesses. It will undermine the trust and reputation of the state institutions, what has been stated as important aspects of the development plan presented by Deputy Prime Minister Mateusz Morawiecki.
Translated by Aleksander Mielnikow (FOR)
The article is based on the summary of the analysis by Rafal Trzeciakowski and Karolina Wąsowska (available in Polish)