Guild PBS discount drive a ‘scam’

3 minute read

The RACGP claims that double dispensing would save the healthcare system where cutting the PBS co-payment would cost it.

One of Australia’s leading healthcare economists has taken a shot at the Pharmacy Guild’s renewed push for cheaper medicines, arguing that it’s a not-so-subtle attempt to put discount chemists out of business.

The guild represents community pharmacy owners, who are typically small business owners in direct competition with discount giants like Chemist Warehouse and Priceline.

Both the AMA and RACGP have recently been lobbying the government to increase the dispensing limit for 140 PBS-listed medicines from a 30-day supply to a 60-day supply.

The doctor groups argue that doubling the dispensing limit will halve dispensing fees, saving the health budget an estimated $800 million each year.

Patients would benefit from the convenience of only filling scripts once every two months, and GPs would benefit from having fewer patients presenting for repeat scripts.

But the Guild has rejected the proposal, and instead asked for the government to reduce the PBS co-pay for a second time in a year.

The most recent reduction from $42.50 to $30 out-of-pocket, an election promise from Labor, came into effect in January.

Ahead of the May budget, the guild has relaunched its Affordable Medicines Now campaign, asking the government to reduce the co-pay to just $19.

In a tweet earlier this week, former Grattan Institute economist Professor Stephen Duckett referred to the campaign relaunch as a “Guild scam to drive discounters out of business”.

The way that lowering the out-of-pocket costs for consumers would sting the discounters hinges on the fact that pharmacies are free to discount medicines that have an official listed PBS price below the co-payment by however much they want.

Discount chains like Chemist Warehouse have the resources and economies of scale to be able to offer extreme discounts on these medicines, but small pharmacies do not.

But if that official PBS price is above the maximum co-payment, pharmacies are only allowed to discount the medicine by $1.

Lowering the co-pay effectively limits the number of medicines that pharmacies like Chemist Warehouse will be allowed to discount.

For example – if the medicine Examplofen is listed for $25 on the PBS, a big discounter could still sell that medicine to the patient for just $5, easily undercutting a corner-store community pharmacy which would be unable to order in bulk and compelled to sell it at $25 or more to stay in business.

However, if the PBS co-pay was reduced to $19, the lowest that the same discounter could sell Examplofen for is $18, significantly lowering the competition faced by the corner-store community pharmacy, which would now be selling the medicine at $19.

Potential ulterior motives aside, the guild estimated that lowering the PBS co-pay to $19 would cost around $920 million over four years.

“What they are proposing is there to protect their profits versus supporting the patient,” RACGP president Dr Nicole Higgins told NewsGP.

A recent RACGP survey of more than 1000 GPs found that 85% supported double dispensing, and the college is also calling for an investigation into removing the $1 discount rule and overhauling pharmacy location rules.

The AMA is making similar calls and recently launched a campaign titled You Deserve More, focussing on pharmacy prescribing trials taking place across the country.

The campaign includes printable posters and social media tiles, as well as a form that patients could use to send a letter to their local member of parliament.

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