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News & Trends - Pharmaceuticals

Government caves to pharmacy pressure: Boosts payments amidst uproar

Health Industry Hub | July 4, 2023 |

Pharma News: In a move to address mounting pressure from influencers in the pharmacy sector, the Hon Mark Butler MP, Minister for Health and Aged Care, has announced a significant boost to government payments to pharmacies. Effective from 1st July, all community pharmacies will receive increased compensation for dispensing Pharmaceutical Benefits Scheme (PBS) medicines, with metropolitan pharmacies expected to see an average increase of over $41,000 annually.

The 7% indexation boost to pharmacy payments represents a substantial increase compared to the 3.6% indexation of Medicare rebates set to take effect simultaneously. The decision comes after pharmacists intensified their efforts to pressure the government through scare campaigns aimed at consumers. These campaigns were accompanied by the presentation of a recent report from economist Henry Ergas AO, which warned of the potential loss of over 20,000 community pharmacy jobs within the next four years due to the implementation of the 60-day dispensing policy.

Minister Butler expressed the government’s commitment to delivering more affordable medicines to over 6 million Australians through the 60-day dispensing policy. By reducing the cost of over 300 medications, this initiative aims to alleviate the financial burden faced by millions of individuals living with chronic conditions, including pensioners. The move has garnered enthusiastic support from patient groups, doctors’ organisations, and influential bodies such as the Consumers Health Forum, Heart Foundation, Lung Foundation, Breast Cancer Network, Rural Doctors Association, AMA, RACGP, and many others.

While recognising the complexity and significance of dispensing medicines, Minister Butler highlighted that Australian pharmacies provide value beyond this essential service.

“Every single dollar saved by the Government will go back into pharmacy services, so pharmacists play an even more central role in the health care of Australians,” Minister Butler said.

Examining the financial impact over the course of a year reveals the substantial benefits of the payment increase. On average, a pharmacy located in a major metropolitan area can expect to receive an additional $41,229.98, while large regional centers are projected to receive $43,118.72. Rural towns, on the other hand, will see amounts ranging from $26,857.00 to $51,746.92.

In addition to the increased payments for dispensing PBS medicines, regional, rural, and remote pharmacies will witness a doubling of the total annual budget for the Regional Pharmacy Maintenance Allowance (RPMA) starting from 1st July. This initiative, worth $39.8 million, seeks to support pharmacies in such areas.

With these measures in place, the government aims to address the concerns of the pharmacy sector, ensuring continued access to affordable medicines for all Australians while supporting the vital role of pharmacists in the nation’s healthcare system.

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