The pharmacy ownership and location debate has cracked open again as the guild continues to stay mum on a damning Grattan Institute report.
A column by economist Melissa Bray has reopened debate on the famously anti-competitive community pharmacy ownership and location rules, with the RACGP urging the government to “seize the opportunity” for modernisation.
Under the current settings, only pharmacists are permitted to own a pharmacy and there are strict rules around how close one pharmacy can open relative to an existing pharmacy.
The analysis, published in the Australian Financial Review, noted that the Grattan Institute was the most recent – but not the first – independent body to publish a report calling for the removal of pharmacy ownership and location restrictions.
“In fact, the pharmacy ownership and location restrictions are unfinished business from last century’s national competition policy reforms,” Ms Bray wrote in the AFR.
“It was the national competition policy (or NCP) reforms that led to Australians being able to choose their electricity and gas providers and having more than one telco to choose from.
“The NCP reforms also removed price controls and supply restrictions that we used to have on food products like eggs, poultry, milk, rice and sugar. And the NCP reforms removed a bunch of other restrictions, like only lawyers being able to offer land conveyancing services.
“The NCP reforms led to increased competition in many Australian sectors and had a positive impact on the Australian economy.
“In fact, the Productivity Commission has estimated the NCP reforms led to productivity improvements and price reductions that raised Australia’s GDP by a whopping 2.5 per cent.
“At the turn of the century, the NCP reviewed pharmacy and recommended the restrictive ownership and location rules be abolished. But nothing changed.”
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Responding directly to Ms Bray’s column, RACGP president Dr Michael Wright said the pharmacy rules limited competition and patient choice.
“Healthcare has changed enormously, but these pharmacy rules have been allowed to remain largely untouched,” he said.
“It’s time to ask whether they still serve patients – or whether they primarily protect existing pharmacy owners from competition.”
Dr Wright said that relaxing location and ownership rules would allow dispensing pharmacists to work within general practice.
That was not the only pharmacy-related action over the weekend; on Saturday, Grattan Institute health program director Peter Breadon wrote in The Saturday Paper that there were “few better examples of what happens when politics and policy are left exposed to vested interests than community pharmacy”.
Not for the first time, Mr Breadon called for an end to the Community Pharmacy Agreements, which the Pharmacy Guild of Australia negotiates directly with the Department of Health, Disability and Ageing.
“Under Community Pharmacy Agreements, the guild negotiates directly with government over pharmacy regulation and billions of dollars in public funding,” Mr Breadon wrote.
“The current agreement followed nine months of direct negotiations between the government and the guild. Patients, consumers, employed pharmacists and other health professionals were not equal parties to those negotiations.
“This goes well beyond giving an industry a voice. The organisation representing businesses that get government funding has a privileged bargaining position in how those businesses are funded and regulated.”
He also took aim at the guild’s lack of formal response to the Grattan Institute’s Future pharmacy report, noting that it had “been hard at work behind the scenes” writing to Grattan Institute funders and urging them to reconsider their support.
TMR contacted the Pharmacy Guild of Australia for comment but did not hear back before deadline.
