The Distance Between Us and Community Pharmacies: A Commentary on The Needs of Zoning Policy in Malaysia

The community pharmacy sector in Malaysia has seen substantial growth in recent years. In 2021, there were 5,271 community pharmacists in the country, making up over a quarter of all pharmacists in Malaysia, second only to those in government-funded hospitals and clinics. This number has risen significantly since 2019, with a similar increase in community pharmacy stores, totalling 3,835 in 2021 [1]. Despite the economic downturn caused by the COVID-19 pandemic, the number of registered community pharmacists reached approximately 7,000 by 2023 [2].

Community pharmacists operate privately owned stores within their local communities, offering both prescription and over-the-counter medications. They also provide crucial advice on medication use and maintaining optimal health. These pharmacies generate employment opportunities for pharmacists, pharmacy assistants, logisticians, accountants, and others, contributing to a robust pharmaceutical industry.

Imbalanced distribution: A cause for concern

The growth of the community pharmacy sector has raised concerns about an imbalanced distribution of pharmacists. The majority of the community pharmacies are concentrated in urbanized areas of Kuala Lumpur, Selangor, Penang, and Johor. This creates a significant disparity in pharmacy-to-population ratios, with urban areas enjoying ratios of 1:3,000 to 1:5,000, while rural areas in Pahang and Sabah have much higher ratios, such as 1:9,000 and 1:13,000, respectively [2].

This imbalance has several implications. In urban areas, the high density of pharmacies leads to intense competition. With no regulations on the proximity of new pharmacies, owners may find new competitors setting up shop right next door, leading to price wars and diminished profits for all involved. Meanwhile, rural areas suffer from limited access to medicines, forcing residents to rely on distant government clinics or hospitals, which can lead to time loss and even endanger lives during emergencies due to overcrowding [3].

Another concern is the growing competition between chain and independent pharmacies. The top 10 corporate pharmacy brands now account for around 25% of all community pharmacies and 33% of pharmacists in Malaysia [1]. Chain pharmacies have the advantage of capital for expansion and bulk purchasing power, allowing them to dominate price wars. This competition threatens the survival of small and medium-sized independent pharmacies, which are crucial for fostering innovation and ensuring quality pharmacy services. A monopoly by chain pharmacies could potentially lead to reduced competition, lower service quality, and increased unemployment as independent pharmacies close.

Zoning: A suitable legislation?

The challenges facing the community pharmacy sector stem from a lack of regulation regarding the establishment of new pharmacies. Implementing zoning policies could help address these issues by designating specific areas for certain economic activities, including the distribution of pharmacies. This approach would promote balanced economic growth and ensure that all regions have adequate access to pharmaceutical services [3].

Zoning for community pharmacies is not widely discussed in the Western Pacific region, except in Australia. In the 1990s, Australia faced a similar problem and introduced laws to regulate the distance between new and existing pharmacies [4]. Incentives were provided to pharmacies in less urbanized regions through the Pharmaceutical Benefits Scheme (PBS), which helped increase the number of pharmacies in rural and suburban areas and improved medicine accessibility [4].

Zoning policies include laws to restrict new pharmacies from opening stores within proximity of existing community pharmacies [5]. With a set distance between stores, there is a decrease in competitive pressure for price wars and provide pharmaceutical services in greater quantity and quality. Zoning policies also provide job opportunities in areas that are in greater need for medicine accessibility. With the restrictions of new outlets within urbanized districts, community pharmacists may turn to the suburban and rural districts [3]. If the zoning policy includes provisions for incentives for these actions, pharmacists will be able to break even and maintain a respectable profit margin within these districts.

The cost of zoning: An issue of health economics

If zoning policies are to be implemented in Malaysia, the government will need to conduct extensive dialogues on the type of restrictions tabled in the policy. It would be wise to consider a middle ground, allowing zoning policies to affect only new pharmacies or branches rather than the existing ones. Such a policy would prevent further competition stress in urban areas, even though it will not eliminate it completely. Various dialogues would need to be conducted to ensure that both individual pharmacies and chain pharmacies do not suffer significant losses due to adjustments made to store locations through these policies, especially for the former.

Another factor for consideration is the rapid digitalization of healthcare, leading to a borderless healthcare system in the country. The concept of digital health clinics has already begun to pick up momentum in Malaysia. Talks on digitalizing pharmacies will be inevitable, especially considering the emphasis on product-based profit. In a digitalized world, the effect of any geographical zoning is reduced, as consumers do not even need to leave their homes to purchase medicines.

Nevertheless, digital healthcare is still far from being a reality in the country. Much of Malaysia’s landmass consists of towns and villages, with some areas struggling to obtain sufficient necessities – let alone luxuries such as phone lines and internet access. As such, it is logical to ensure that the geographical need for physical medicines available for purchase is met first before any considerations on digital healthcare are made.

Conclusion

Zoning policies are essential for the equitable distribution of pharmacies across Malaysia, improving access to medicines and reducing competitive pressures in urban areas. By encouraging the expansion of pharmacies in underserved regions, zoning can help ensure that all Malaysians have access to the pharmaceutical services they need. While the implementation of such policies will require careful consideration and dialogue, the potential benefits for public health and economic stability make zoning a justified proposal for discussion among pharmacists and government stakeholders.

Conflict of Interest

No conflict of interest declared.

Reference

1. Chu KE, Goh M. Malaysia Community Pharmacies Report. 2022. https://aipharm.xyz/articles/malaysia-community-pharmaciesreport-2022
2. Pharmaceutical Services Programme, Ministry of Health Malaysia. Register of Licenses. 2023. https://www.pharmacy.gov.my/v2/en/information/registerlicences.html
3. Leong PC, Chong CP. Community pharmacists’ opinions of zoning policy in community pharmacy: A qualitative study in Malaysia. J Appl Pharm Sci. 2024;14(02):093–101. https://dx.doi.org/10.7324/JAPS.2024.151337
4. Nissen L, Singleton J. Explainer: What is the Community Pharmacy Agreement? The Conversation. 2015. https://theconversation.com/explainer-what-is-the-communitypharmacy-agreement-38789
5. Australian Government, Department of Health and Aged Care. Pharmacy Location Rules. Applicant’s Handbook. 2018. https://www.health.gov.au/sites/default/files/documents/2022/08/pharmacy-location-rules-applicant-s-handbook.pdf