eRx monopoly ‘threatens innovation and security’

4 minute read

Telstra Health’s provider has been given a departmental leg-up at the expense of competitor MediSecure.

A $112 million contract for script exchange services awarded to Fred IT’s eRx is an anticompetitive monopoly and a leg up for Telstra Health and the Pharmacy Guild, say industry experts. 

In May this year the DoHAC awarded eRx the contract to be sole provider of prescription exchange services for PBS-listed drugs, after both eRx and competitor MediSecure developed working solutions.

The winning script exchange solution was created by Fred IT Group, which is owned by Telstra Health and the Pharmacy Guild of Australia. Telstra Health also owns Medical Director, one of the market leaders in GP practice management software.

The contract has prompted claims of anti-competitive behaviour in a market with only two major providers.

Dr Mukesh Haikerwal, deputy chair of the Australian GP Alliance, was clinical lead for the formerNational Electronic Health Transition Authority when prescription exchange services were initiated nearly 15 years ago.

Dr Haikerwal told TMR that the decision gave Telstra Health a leg up in the broader medical software market as Telstra’s PMS probably had better integration with eRx. 

Dr Haikerwal said he had been involved from the start in the national prescription exchange services, so he “knows where the bodies are buried”. He said that historically, it was a direction from government that there should be a prescription exchange.

MediSecure came out as a competitor to eRx, both of whom were incentivised to create prescription exchanges.

“Over time, [both vendors] developed changes that were both robust, useful and accurate but nobody was using them. When covid hit, the need suddenly went from push to shove and both vendors did a good job,” said Dr Haikerwal.

“All software providers have this competitive tension to make sure that they get the best outcome. One over the other they play leapfrog so they can improve,” he said.

Dr Haikerwal said he feared the market monopoly that will exist after 30 September would stymie innovation and cost efficiency.

General practices that currently use MediSecure will have to transfer their prescribing to eRx by then or lose access to prescribing PBS-listed drugs.

“The transfer of those prescriptions from MediSecure will be tortuous, and also for patients,” said Dr Haikerwal.

“There are transition arrangements in place but it’s galling that you can’t actually choose not to keep your credentialled current provider which is doing a good job.”

As deputy chair of the Australian GP Alliance, Dr Haikerwal has been in conversation with the ACCC about the anti-competitive implications of the awarded tender.

Paul Frosdick, chief executive of MediSecure, told TMR the government decision was “existentially threatening” to his business and that it was “bad policy” for critical digital health infrastructure not to have a redundancy system.

“It does not make sense. [For telecommunications] we’ve got Telstra, Optus and Vodafone. If one falls over, we can all move to another. It’s the same with electricity providers. Critical infrastructure requires redundancy,” he said.

“The other issue will come when the government wants to reprocure it. If MediSecure goes out of business, how in God’s name are they going to get best value when there’s only one organisation capable of delivering all the traction in any negotiation?”

Mr Frosdick said the government tender provided “no definite suggestion that just one provider would be selected” but that there was a provision for up to three providers.

MediSecure spent years investing in research and development at the expense of profitability and only just last year made a profit, Mr Frosdick said; now, after being requested by DoHAC to build a script exchange, the “rug has been pulled out” from under them.

MediSecure has now pivoted with a tech-forward solution that captures the private prescribing market of around 100 million prescriptions a year.

“There is a significant number of non-PBS scripts which is a significant expenditure for the Australian public. We can bring innovation to bear in that space, provide a superior technology and make better outcomes for everybody,” Mr Frosdick said.

End of content

No more pages to load

Log In Register ×