Free prescriptions blocked by the Pharmacy Guild of Australia

Australia’s largest pharmacy chain has offered to provide free prescription medicines if restrictive rules are changed. But a controversial agreement means customers will miss out.

Sue Dunlevy

September 3, 2019


Australia’s largest pharmacy retailer has offered to provide free prescription medicine if restrictive rules are changed in the new five-year pharmacy agreement.

Chemist Warehouse chief operating officer Mario Tascone said the pharmacy chain was providing free scripts in New Zealand and could do the same on some common medicines here.

The rules governing pharmacies — which prevent heavy discounting of Pharmaceutical Benefits Scheme (PBS) medicines and stop new chemists opening near existing ones — should be radically overhauled, he said.

Pharmacists are allowed monopoly control over prescription medicine sales under an agreement negotiated between the Pharmacy Guild of Australia and the Federal Government.

Mr Tascone said Chemist Warehouse could abolish the $6.50 pensioner and $40.30 general patient payments on some common medicines and make them available for free to patients if the government relaxed competition rules.

The discount chain would accept the government subsidy and dispensing fees as sole payment for the medicines so patients would face no charge.

“We probably couldn’t do it for everything but we could do it for select drugs here in Australia,” he said.

The only thing standing between consumers and free medicines are a series of anti-competitive rules devised between the Pharmacy Guild of Australia and the government.

The five year Community Pharmacy Agreement, which enshrines the rules, is currently being renegotiated and consumers have been denied a say in the new rules.

Mr Tascone said he did not hold any hope the rules would be changed because the powerful Pharmacy Guild was blocking reforms and “is a well-oiled machine and a big contributor to both major (political) parties”.

The high cost of subsidised medicines which cost a pensioner $6.50 per script and a general patients $40.30 is harming the health of Australians.

One in fourteen Australian patients delayed getting a script filled, or never got it filled, because of cost the Australian Bureau of Statistics reported in 2018.

Chemists are permitted to discount the co-payment by $1 per script but only 28 per cent of scripts (mostly Chemist Warehouse dispensed) have the discount applied because suburban chemists represented by the Pharmacy Guild oppose the discount.

Consumer’s Health Forum Spokesman Mark Metherell said the forum “has supported the findings of several national inquiries recommending deregulation of pharmacies, including the anti-competitive location rules. Moves to loosen discounting limits also have merit.”

Australian Medical Association spokesman Dr Richard Kidd said the AMA would welcome changes to allow free prescriptions.

“There are a small group of people where that amount of money would make a difference. Anything that enables patients to get their medicines is welcome,” he said.

A spokesman for the Pharmacy Guild said it did not support free scripts and instead wants the government to cut the cost of scripts for concessional patients from $6.50 to $5.50.

“We do not support a zero-co-payment except where a concessional patient reaches the safety net after 60 scripts (soon to be reduced to 48 scripts),” the spokesman said.

The medicine payment systems in Australia and New Zealand have significant differences and are not directly comparable, he said.

“As for Chemist Warehouse, it is a standard big corporate ploy to seek to destroy small competitors through ‘loss leader’ prices and then raise prices again once they dominate the market,” he said.

News Corp revealed last week the drug subsidy scheme is now increasing the price of hundreds of prescriptions not reducing the cost because of high fees paid to chemists.

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