Call for a Senate Inquiry into the pharmacy industry in Australia

Australian Medical Association President, Dr Bill Glasson, today called for a Senate Inquiry into the pharmacy industry in Australia.

With the current Pharmacy Agreement expiring on 30 June 2005 and the current Senate configuration in place until the same date, Dr Glasson said the timing is perfect for a comprehensive review of the protected environment in which the pharmacies operate.

Dr Glasson said that Pharmacy Guild President, Mr John Bronger, should be congratulated for raising issues that have put the public, media and political spotlights on his industry.

“We need a Senate Inquiry to ensure the next Pharmacy Agreement properly serves the needs of patients and communities,” Dr Glasson said.

“This would involve forensic examination of some of the anti-competitive protection measures currently in place and a close look at whether the Australian public is getting value for money out of the current Pharmaceutical Benefits Scheme (PBS) funding arrangements for pharmacies.

“Nearly 20 per cent of all PBS expenditure goes direct to pharmacists in dispensing fees.

“Pharmacies can own medical practices but medical practices cannot own pharmacies.

“Under the current Agreement, a new pharmacy cannot be established within 1.5 kilometres of an existing pharmacy ‘in a straight line from door to door’. And the Guild actually negotiates dispensing fees on behalf of all pharmacists. This is crazy stuff.

“It is time to break up the protected anti-competitive cabal that is run by the Pharmacy Guild and deliver cheaper medicines and better pharmacy services to all Australians.

“Rather than seek to take over the role of GPs in the community, the Guild should get its own shop in order and a Senate Inquiry is the best way to go about it.

“The focus of the Inquiry must be on the pharmacies – the big end of town – and not the hard working community pharmacists,” Dr Glasson said.

Dr Glasson said a Senate Inquiry should be announced when Parliament resumes, to begin its work in the New Year, and examine issue including:

• The current Agreement limits the number of pharmacies that can exist to ensure there is no hint of competition between pharmacists. The Agreement limits a pharmacy from establishing within 1.5 kilometres of an existing pharmacy ‘in a straight line from door to door’ (relaxed from 2 km by the shortest legal route). It also restricts new pharmacies from establishing unless there is a minimum permanent population of 3000, a doctor in the area, and a shopping centre.

• In rural areas, additional pharmacies can only be approved if there is a minimum population of 8000, the average rate of population growth over the previous two years exceeds 7 per cent and the new site is no closer than .5 km from an existing pharmacy.

• The rules about pharmacy relocations, pharmacies in private hospitals, and pharmacies in aged care facilities must be reviewed.

• Pharmacists now receive (2004-05) approx $1.2 billion out of total PBS expenditure in that year of $6.2 billion. Nearly 20 per cent of all PBS expenditure goes straight to pharmacists in dispensing fees. They get more fees if they dispense cheaper generic drugs.

• While GPs are out there competing away in the open market, the pharmacies are currently seeking an Agreement with the Government to limit the number of pharmacies and allow pharmacies to usurp certain roles performed by GPs. No discussion has taken place with the doctors and no plan to train pharmacists in general practice has been revealed.

• What the pharmacists are asking for is not in the interests of patients. A GP needs to monitor diabetes, hypertension and other chronic conditions in patients to ensure quality continuity of care. Allowing pharmacists to perform these roles would disrupt continuity of care.

• Only pharmacists can own pharmacies whereas anyone can own a medical practice. The Senate Inquiry should examine the public good in reviewing the rules governing ownership of pharmacies, and this would involve examining the impact of groups such as, say, Woolworths, owing pharmacies.

Dr Glasson said the AMA would be keen to cooperate with a Senate Inquiry to ensure the best possible health and primary care outcomes for Australian patients.

“The Australian community would welcome the opportunity to contribute to the next Pharmacy Agreement through an open and honest Senate Inquiry process,” Dr Glasson said.

http://www.ama.com.au