Chief executive Andrew Gaudin warns in the long-term, this will reduce access to essential healthcare services - particularly for people outside the main centres.

Discount pharmacies like the Chemist Warehouse and Countdown supermarket stores do not ask for the usual $5 prescription charges.

"They're using their commercial buying power and clout and running a loss-leader model, Gaudin told RNZ's Nine to Noon

"They're absorbing the government's $5 prescription charge. Effectively they're manipulating government policy to buy market share, and drive and squeeze out the smaller, independent [owner-operator] pharmacies." Read more