Not one cent of the $18 million set aside for community pharmacies in June has been given out, with pharmacy owners saying the criteria to get the grants is too tough.
Photo: RNZ /Dom Thomas
The Ministry of Health has only received one application for the pandemic recovery funding.
Steve Jo owns Unichem Southcity in Invercargill. During the lockdown he and his staff clocked long hours going the extra mile for customers, as well as footing the bill for extra services including personal protective equipment - about $200 per staff member.
He said he was delighted when the funding was announced - until he read the eligibility criteria.
"We had to demonstrate: 'critical financial viability', 'seriously threatened', those kind of terms.
"And they wanted to have a look at all our books and everything. I feel that basically, if we are about to shut the door, then we might be able to claim it but otherwise don't even think about it."
After weeks of working on the frontline it was a bitter bill to swallow.
"I personally felt a little bit betrayed about it, because the government was saying that we're doing a good thing and we want to look after community pharmacists who work really hard at the frontline worker, but here's $18 million that you can't really touch."
Part of the criteria also included the pharmacy be considered "essential".
Manurewa pharmacist Kathy Maxwell. Photo: Rowan Quinn / RNZ
Kathy Maxwell who owns Unichem Hillpark Pharmacy in Auckland said she knew her pharmacy wouldn't be considered essential so did not apply.
"For me, was I ever going to be essential with a big player 10 kilometres down the road who was open long hours? Probably not. So I was never going to be able to get the funding.
"Yet I worked, and my staff worked, the hardest we had ever worked."
Gina Cook from the business advisory firm BDO specialises in the pharmacy sector, and said there had not been much information provided about the fund, and what had been provided was vague
"The DHBs are administering it and have written a letter to pharmacies, and I've had a look at that letter, it is quite vague. It basically just outlines what a critical pharmacy is, and it is quite a hard criteria to meet."
"There was potentially some funding available if they had to get their accountant to help. But you had to obviously apply first and meet the criteria, so quite a high hurdle ... so I just don't know that they targeted it all that well."
She said the definition of what constitutes an essential or critical pharmacy was flawed.
"The Ministry of Health at the time said it was for 365 critical pharmacies that it said needed to remain open, but I don't know that it was really that thought through, as to who the pharmacies are that really needed the help.
"Because based on what I've seen, what the policy was targeting sounded like isolated or rural remote locations, whereas those pharmacies tend do pretty well, because they don't have a lot of competition and the overheads [are] generally lower."
Photo: RNZ /Dom Thomas
Cook said the pharmacies struggling were more likely to be in metropolitan areas, where they face higher costs, as well as competition from big chain chemist stores which don't charge the $5 co-payment fee and could afford to offer better retail prices.
Maxwell agreed it was impossible for community pharmacies to compete with that.
"I'm not a discounter, I'd have to shut my doors tomorrow if I was to discount the co-payment, I've tracked it.
"I don't have a problem with competition. I just want a level playing field, and I don't think the government ever intended [the co-payment charge] to be used as a discount tool and a loss leader for overseas companies."
Pharmacy Guild chief executive Andrew Gaudin said since the pandemic things had got worse.
"Certainly we've seen stores that have either had to cut their opening hours, cut their services, or cut staff, and some have been forced to close.
"What was happening in the early stages is pharmacies were definitely out of pocket, and having to meet those additional costs with no compensation, and that was partly why the government had promised $18 million.
In a statement a Ministry of Health spokesperson confirmed the funding was for pharmacies threatened with closure as a direct result of Covid-19.
On the issue of the co-payment fee, a spokesperson for the Health Minister said it was not an issue the Labour Party campaigned on, and with the new government not yet sworn in, it would be inappropriate to comment.