Asda, the UK subsidiary of US retail giant Wal-Mart, today [Wednesday] announced it would lobby the government to liberalise the UK pharmacy retail sector to introduce more competition.

The group said potential savings for consumers could reach £420m (US$597.1m) per year.

The Office of Fair Trading is currently looking into a potential liberalisation of the regulations governing new pharmacy licences following criticism that the current regulation limits competition to the detriment of the consumer. Last year resale price maintenance for over-the-counter (OTC) drugs was abolished, heralding potential loosening of the market.

Rules governing the distribution of new licences are viewed as verging on the draconian. They must be procured from local health authorities and are very rarely granted, with the result that existing licences sometimes change hands for as much as £1m.

Asda said that if the rules governing new licences are loosened, we could see up to 10% more pharmacies within five years, leading to sharper price competition. Supermarkets like Asda are keen to grab market share from tradition pharmacy groups such as Boots.