Italy's Senate Committee on Industry has approved draft measures limiting pharmacy ownership to a maximum of 20% of existing pharmacies per region within the country.
Implications | The proposed amendments to competition legislation aim to ensure that single companies or operators are able to directly own, control, or indirectly operate a maximum of 20% of existing pharmacies per region. The bill is still in a draft form, but appears likely to secure parliamentary approval. |
Outlook | In terms of increasing pharmacy competition the changes are likely to prove largely ineffective, and could in fact have the opposite effect by reducing the growth rate for the number of pharmacies operating in parts of the country. |
Italy's Senate Committee on Industry has endorsed draft amendments to Article 48 of the country's Competition Law. The amendments were made to the text of 2016 proposals aimed at liberalising the pharmacy sector, and expanding sales of prescription medicines through para-pharmacies (see Italy: 21 January 2016: Italy considers liberalisation of prescription-drug sales and pharmacy regulations).
On 12 July, the Senate committee meeting approved proposed regulations governing the ownership structures for pharmacy chains in Italy. Committee representatives cleared amendments imposing a regional ceiling (set at 20%) for the ownership of pharmacy outlets; this differs from the current model, which establishes a maximum number of pharmacies per inhabitant. The measures are designed to avoid concentration of pharmacy ownership, and to boost price competition between pharmacies.
Powers to enforce these changes will be vested in a competition authority, with the ability to impose fines and penalties for breaches of the legislation. However, the amendments are less stringent than other sets of proposals that had been considered by the parliamentary committee: these included proposals made by Senator Luigi D'Ambrosio Lettieri – a former pharmacist – that companies should be prohibited from directly or indirectly controlling more than about 15% of pharmacies in a given town or city. Other rejected proposals also called for statutory limits of about 2,000 pharmacies that could be operated by a single company on a nationwide basis; these proposals on even lower pharmacy caps were not passed by the Senate committee meeting. (A text of the Senate discussions is available to view in Italian here.)
Clinical-trial regulation becomes area for Senate examination
On 12 June, the speaker of the Senate, Pietro Grasso, also called for new legislation tightening the regulation of clinical trials in Italy. In an address to a Senate committee hearing on clinical trials and ethics, Grasso was reported as stating that further "joint regulation at international level is inescapable". This contrasts with a pro-investment strategy by the government, supported by the country's Association of Innovative Pharmaceutical Companies (Farmindustria), that aims to attract 30% of clinical-trial research in the European Union (EU) to Italy over the coming years (see Italy: 22 January 2016: AIFA and Farmindustria reveal strategy to attract 30% of EU clinical trials to Italy). For that reason, although the government will support efforts at an EU level to harmonise clinical-trial protocols, improve access to experimental data, and pan-EU co-ordination, this is likely to stop short of permitting new burdensome regulations that would threaten investment.
Outlook and implications
The measures aim to the protect public health interest in terms of ensuring an efficient distribution of pharmacy medicines without hindering market access for potential new entrants. However, the draft text does not address other proposed changes that, if implemented, would increase the rate of financial subsidies offered to rural pharmacy outlets. This latter proposal is likely to be revisited by parliament in 2017.
The outcome of the Senate committee meeting will have mainly financial implications for pharmacies and distributors. If implemented, the measures would likely have a negative impact on the profitability of large pharmacy supply chains. However, there is also a likelihood that legislation will affect growth in the number of pharmacies in the country, which has long been opposed by the National Federation of Italian Pharmacy Owners (Federfarma). Elsewhere, the government will be hoping the legislation also enhances competition in the pharmaceutical distribution market by potentially increasing patient choice – thus producing savings for the healthcare system – and in terms of out-of-pocket payments.
The Senate committee did not address issues that were raised regarding proposals to expand sales of prescription medicines through para-pharmacy outlets. The Italian ministry of health currently permits the sale of only a limited number of prescription medicines in Italy's reimbursement system (including contraceptives, antidepressants, and medicines to treat erectile dysfunction) with the supervision of a qualified pharmacist in drug stores and other non-pharmacy retailers; draft proposals are on the table to increase competition between pharmacies and other retail outlets. Consumer groups in Italy have strongly backed the idea of greater liberalisation, arguing that the amendments could bring economic benefits in terms of reduced prices.
The competition bill is now entering the final stages of parliamentary approval, with the full text of the bill likely to be ready by mid-July (prior to a parliamentary recess).