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News & Trends - Pharmaceuticals

The push to break pharmacy ownership rules

Health Industry Hub | June 3, 2024 |

Pharma News: Treasurer Jim Chalmers MP has commissioned a study, directing the Productivity Commission to delve into the potential economic benefits and revenue implications of proposed competition reforms. The focus lies on revamping the National Competition Policy.

Echoing a chorus for change, the Australian Medical Association (AMA) has submitted a plea to the National Competition Policy Analysis to dismantle the out-of-date “archaic” pharmacy ownership and location regulations. Their rationale is equally compelling, citing these rules as barriers to medication access and cost reduction for consumers.

AMA President, Professor Steve Robson, stated “We are in a cost-of-living crisis and everyone needs cheaper medicines and more competition. These rules limiting the number of pharmacies in one location are decades out of step with the recommendations and what patients’ need.”

The AMA’s submission is backed by decades of industry reports, advocating for the removal of these stifling regulations.

“We want increased competition for consumers and pharmacies should be allowed to discount PBS medicines by as much as they want,” Professor Robson asserted.

However, the submission doesn’t just spotlight the present challenges; it also forecasts potential risks for marginalised communities, including Indigenous populations and those in rural and remote areas.

One glaring example exemplifies how current ownership rules perpetuate disparities in access. The Queensland Government would not even consider a proposal for the removal of restrictions on the ability of an Aboriginal Health Service to own and operate a pharmacy located at that Aboriginal Health Service. 

Professor Robson reiterated the urgent need for reforms.

“We hope this time that governments listen because it is in the best interest of all Australians, everywhere. We don’t want patients skipping medications because of the cost of living – that just shouldn’t be happening,” he commented.

The AMA submission also casts a critical eye on the successive Community Pharmacy Agreements (CPA).

“In reality, CPAs have proven to be anti-competitive and continue to put the interests of pharmacy owners before patients, with several government reports also demonstrating that the CPAs lack transparency and accountability,” Professor Robson said. 

Most recently, the federal government had pledged to reinvest $1.2 billion accrued through the 60-day dispensing initiative back into pharmacies. However, the Pharmacy Guild of Australia vehemently opposed the original proposal. The subsequent negotiation of $3 billion is just a fraction of the value of the agreement. The funding for pharmacies under the 7CPA is around $25 billion over its five-year life.

The final report by the Productivity Commission is due to government by 1 November 2024.

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