Guild’s ‘independent’ review calls for double-dispensing delay

4 minute read

The Pharmacy Guild of Australia engaged an economist to produce a review of the policy. Would the review have been made public if it hadn’t confirmed the Guild’s view?

An “independent” review, actually commissioned by the Pharmacy Guild of Australia, has slammed the federal government’s 60-day dispensing policy and called for a postponement of the first tranche of the rollout, currently due on 1 September. 

The Guild vehemently opposed the double dispensing proposal, to the extent that the recent Senate estimates hearing was told the lobby group had breached a pre-Budget confidentiality agreement with the Department of Health and Aged Care, leading to a breakdown in consultation between the two groups. 

Henry Ergas AO, an economist and regular columnist for The Australian, is the author of the report.  

“I have been asked by the Pharmacy Guild of Australia to review and draw policy conclusions from a Technical Report prepared by Tulipwood Advisory Pty Ltd (Tulipwood Economics) and the Relational Insights Data Lab (RIDL) at Griffith University in relation to the Australian Government’s 60-day MDQ policy,” said Mr Ergas’ preamble. 

In the review Mr Ergas modelled three outcomes of the 60-day dispensing policy, determined by GP uptake: 

  • the “minimum scenario” which was used by the Department of Health and Aged Care in its impact assessment submitted to the Office of Impact Analysis; 
  • the “central scenario” which has been developed “based on our own analysis” of likely GP take-up rates, which is estimated to be, ultimately, high; and,  
  • the “maximum scenario” is “somewhat arbitrary, but the intention is to understand the maximum impact of the MDQ policy change on individual community pharmacies and the rest of the Australian Community if GP take-up rates proved to be higher than our central scenario anticipates”. 

He concluded that the 60-day dispensing policy would result in: 

  • the withdrawal of more than $4.5 billion (in nominal terms) out of a single industry sector in the space of four years “substantially affecting its capacity to recover costs which were incurred in good faith”; 
  • the withdrawal, on average, of between $169,332 and $183,925 per community pharmacy per year over four years; 
  • the likely closure of at least 200 community pharmacies and, potentially, up to 600 community pharmacies, with a further 900 under financial stress; 
  • a disproportionate impact on vulnerable communities – rural and regional communities, particularly First Nations peoples; 
  • the loss of 4938 jobs (in FTE terms) and potentially up to 9,461 jobs (in FTE terms); 
  • the loss of 10,863 actual jobs and up to 20,818 actual jobs, depending on GP uptake; 
  • adverse impacts on the health of Australia’s most vulnerable citizens “who rely on their local community pharmacist for advice, reassurance and guidance”; and, 
  • an increase in Australia’s rate of prescription overdose (“from increased medicines in the home”) and rate of missed diagnosis and misdiagnosis (“from less interaction between patients and their GPs and pharmacists”). 

Additionally, Mr Ergas concluded that the policy would not provide long-term fiscal savings to the government because “the reduction in dispensing fee payments is offset by a reduction in patient co-payments and reduced tax revenue paid by the community pharmacy sector as well as increased healthcare costs”. 

Mr Ergas made two recommendations – that the implementation of the first tranche of the MDQ policy change (due on 1 September) be suspended “until an evidence-based, independent review of the financial and economic impacts on the community pharmacy sector and the Australian community more broadly is undertaken and the impacts properly understood”; and that the independent review “engage in meaningful consultation with all stakeholders”. 

“This process would include consultation on how adverse impacts could be mitigated, both through changes to policy design and to the phasing in of the policy and/or via appropriately targeted compensation, so as to ensure community pharmacy could continue to play its central role in the health policy mix,” he concluded. 

The Pharmaceutical Society of Australia’s national president Dr Fei Sim said the report was “disturbing”. 

“This is the first economic modelling we’ve seen that looks at the flow-on effects of 60-day dispensing, and the results are scary,” she said. 

“Pharmacists are an integral part of our primary healthcare system, and with medicine use on the rise we cannot afford to lose billions from our sector. 

“All pharmacists support making medicines more affordable, but it cannot come at the expense of medicine safety, a cost that will be worn by our most vulnerable groups.  

“We need to understand that these impacts are significant. We need to genuinely sit down and plan a way forward for patients, the pharmacy sector, and for the government.   

“We want a solution that allows us to continue providing accessible health care to our communities and supporting their safe and effective use of medicines,” Dr Sim concluded. 

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