Bargain Chemist in Wellington's Lyall Bay is unable to fulfill prescriptions for funded medications, after Health NZ decided not to grant its application.

The business put up a sign in recent weeks alerting customers to the situation, and offering a free courier option for medication dispensed from its Manners Street store instead.

In response to RNZ's questions, Bargain Chemist director Peter Shenoda confirmed their application for a licence (an integrated community pharmacy services agreement, or ICPSA) had not been approved.

In a statement, he said: "Health NZ ultimately determined that it did not consider there was sufficient evidence of need for an additional funded pharmacy service in the area. We respectfully disagree."

The Bargain Chemist store is in the Wellington Airport Retail Park. There are two other pharmacies nearby - a Chemist Warehouse and a Unichem Pharmacy on Bay Road in Kilbirnie, a five-minute drive (or 20-minute walk) away.

Shenoda said they were appealing the decision, as the bigger issue was patient choice.

"We welcome competition. What we don't understand is why having an existing pharmacy nearby should mean patients cannot have another choice when there is clear community demand for it."

Bargain Chemist is New Zealand-owned and operated, with 30 stores across the country. It fulfills prescriptions for funded medication for free, where other stores might charge a small prescription fee, with $5 as the standard co-payment.

"We've heard particularly from elderly customers, parents and people with mobility and transport challenges who value the accessibility, parking, opening hours and convenience of the Lyall Bay pharmacy."

It could be a lengthy process to obtain a licence, Shenoda said. Their Upper Hutt store applied for one in 2022, and it was only granted in July this year.

Shenoda asked the health agency to hear its community.

"Our request to Health NZ is straightforward: reconsider the Lyall Bay decision, listen to what the community is telling you, and allow local patients the choice of accessing funded prescription services from Bargain Chemist."

Health NZ group manager for funding and integration north Deborah Davies said Health NZ had "wide commissioning powers" and was not required to accept all applications.

Each case was considered in terms of access to pharmacy services, unmet need, equity, service duplication, and the effective and efficient use of the pharmacy workforce.

"Decisions are made on the merits of each application and are not based on whether a pharmacy is New Zealand- or foreign-owned."

Bargain Chemist had told Health NZ it was appealing that decision in December.