The independent think tank has forfeited its chance of a Christmas card from the Pharmacy Guild of Australia this year.
Millions in taxpayer funds have been wasted on unjustified pharmacy payments under three decades of the Community Pharmacy Agreement, says a new Grattan Institute report which recommends sweeping financial and legal reforms to the industry.
The Pharmacy Guild of Australia’s political machinations are a particular focus, with the report calling out the association of community pharmacy owners for “its ability and willingness to weaponise a highly valued part of the healthcare system”.
Since the first Community Pharmacy Agreement was signed in 1990, the report alleges that the guild has blocked or watered down reforms designed to cut costs to the sector, in part by ensuring “that the evidence base needed to challenge its claims does not exist”.
It also points out that, over the past five years, the guild has donated $2.5 million to political parties.
This makes it not only the largest healthcare sector donor, but one with even deeper pockets than the Minerals Council of Australia.
Among other things, the Grattan recommends discontinuing the Community Pharmacy Agreement (CPA), abolishing pharmacy location and ownership rules, and funding pharmacists to work in primary care.
Dispensing fees were a particular sticking point in the argument against the CPA, which the Grattan called a “black box” with “no empirical justification” for the policies it funds.
According to the report, the guild has “blocked” any attempts to pinpoint the cost of dispensing a prescription in Australia, making the fees set out in each CPA a “stab in the dark”.
Further, the Grattan recommends doing away with the allowable additional patient charge, the safety net recording fee, and the additional community supply support payments entirely. This last payment was intended to compensate pharmacies for potential lost income arising from 60-day dispensing but was not adjusted downward when 60-day dispensing uptake was slower than expected.
The report also pointed out that the strict ownership rules around community pharmacies had not prevented market consolidation, with 44% of community pharmacies concentrated across four large banner groups.
In-store supermarket pharmacies, it said, would be good for patients. The Grattan said there was little international evidence to suggest that supermarket expansion would lead to “aggressive supermarket expansion”.
The institute was realistic in its assessment of the guild’s likely response.
“The Guild will probably oppose the recommendations in this report,” the report said.
“It is likely to claim, as it has before, that reform threatens the viability of the sector and the communities that depend on it.
“The best response to these arguments is transparency, so that taxpayers and patients can know if these claims are accurate.”
In response to questions from The Medical Republic, a guild spokesperson said the association “doesn’t agree that there should be changes to pharmacy ownership and location rules”.
“The countries that have taken this approach have subsequently seen significant closures,” they said.
“In comparison, Australia has 6,000 community pharmacies, in 330 towns a community pharmacy is the only primary healthcare provider and 75% of all Australian’s [sic] live within 2.5km of a community pharmacy.”
Coincidentally, the Grattan report also picked up on this factoid.
“The Guild regularly touts that 96% of Australians in capital cities and 74% outside of capital cities live within 2.5km of a pharmacy,” the Grattan report reads.
“This is a meaningful sign of access. But equivalent shares of Australians live within 2.5km of a GP clinic.”
In fact, the report said that integrating pharmacists into general practice would likely increase access to medicines expertise while avoiding the risk of duplicating GP care.
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Report co-author Peter Breadon, a health economist with the Grattan Institute, told TMR that in many ways the evidence for integrated pharmacists was stronger than the evidence for pharmacist-led prescribing.
“The evidence is really good for integrated pharmacists in general practice,” he said.
“Several other countries do it at scale, and the evidence is much stronger than it is for most forms of extended prescribing roles within community pharmacy settings.
“The integrated models don’t suffer from conflicts of interest where [the pharmacist is] both the retailer and the dispenser, and they also don’t suffer from risks of fragmentation and duplication.”
By the Grattan’s numbers, an investment of $57 million per year could support about 900 GP clinics to employ a pharmacist two days per week and an extra $23 million per year could see that extended across Aboriginal Community Controlled Health Organisations.
Mr Breadon said this reform could be done relatively quickly and that when previous funding reforms had come through, clinics were often quick to recruit a non-dispensing pharmacist, proving that there was enthusiasm within the industry.
The RACGP welcomed the recommendation for government investment in integrated pharmacists, as well as the recommendation for more studies looking at cost effectiveness of pharmacist prescribing.
“We’ve got to have policy set, based, on evidence, not on the success of lobbyists, and this report totally reinforces that need,” RACGP president Dr Michael Wright said.
“We’d also support the idea that before any expansion of pharmacy scope, we need proper large-scale trials to prove that these things are evidence-based, improve quality, and are safe.”
The AMA, meanwhile, said it had “long supported” integrated pharmacists.
“We believe pharmacists provide a critical service — but we need to use their expertise in medicines more effectively, by integrating non-dispensing pharmacists into general practice,” president Dr Danielle McMullen said.
“Importantly, the report points out this is one area backed by evidence — with overseas examples demonstrating the success of pharmacists working in partnership with GPs.”
