Taxpayers to guarantee chemists' monopoly
THE nation's chemists will have their incomes guaranteed by the taxpayer even if the number of prescriptions they dispense falls.
And their monopoly on selling prescription drugs will be preserved even though it pushes up medicine prices.
Health Minister Greg Hunt has pledged anti-competitive rules - that prevent new chemists opening within 1.5 kilometres of an existing chemist - will remain in the next five year community pharmacy agreement.
At the Guild's annual dinner at Parliament House recently he promised to give the nation's 3000 pharmacy owners "certainty" and "bankability over your businesses".
Numerous government inquiries have called for the location rules to be scrapped and former competition tsar Graeme Samuel and former health department chief Stephen Duckett say they disadvantage consumers.
News Corp has revealed chemists' fees are now so high they are actually pushing up the price of medicines dispensed under our drug subsidy scheme that is meant to make drugs cheaper.
The nation's biggest selling pill the cholesterol lowering atorvastatin costs $2.95 from the manufacturer but its price rises to $20.43 for a general patient after chemist fees are added.
The monopoly rules mean patients in the bush are paying three times more than people in the city for lifesaving medicines.
Some families are forced to drive 100 kilometres to get their scripts filled at a discount chemist to save more than $1000 a year on prescription medicines.
Earlier this year the Pharmacy Guild forced Mr Hunt to backtrack on plans to allow people to get their medicines every two months instead of every month, saving them up to $240 a year on dispensing fees.
The powerful Pharmacy Guild has donated almost $1 million to political parties in the past five years including $139,542 to Labor; $86,558 to the Liberal Party and $37,620 to the National Party in 2017-18.
The government is currently negotiating the next five year community pharmacy agreement which sets the fees chemists receive for dispensing subsidised prescription medicines.
In the 2017 budget, the Pharmacy Guild received a $200 million taxpayer funded handout for doing nothing to make up for the fact that there were fewer prescriptions filled than they anticipated.
The minister told the Guild he wanted to protect them from losing money as they had in 2016.
"We're looking to reduce fluctuation in payment," he told the Guild's annual dinner.
"What we agree with, is agreeing on a trajectory where we will have a real outcome in terms of remuneration that you can bank on.'
"It's protected for us, because we know what we'll have to pay; it's protected for you, because you know what you will receive," he said.
A spokesperson for the Guild said: "We're currently discussing a range of issues with the Federal Government to ensure patients have better and more affordable access to health services over the next five years."
Former Australian Competition and Consumer Commission chief Graeme Samuel said competition was always good for the public interest and technology was on track to disrupt the monopoly the Pharmacy Guild was trying to preserve.
Some companies are already delivering prescriptions using drones and online pharmacies and major discounters are disrupting the traditional pharmacy model.
"Technology is simply going to force change in the same way smart phones and ride sharing disrupted the taxi industry," he said.
Mr Duckett said the government should focus more on consumers than pharmacy owners.
'The government should use the so called Community Pharmacy Agreement to bring down prices faced by consumers, not engage in sweetheart deals that protect incomes of pharmacy owners," he said.
A spokesman for the Consumers Health Forum, Mark Metherell, said if chemists incomes were guaranteed there should be a quid pro quo that benefits taxpayers and consumers.
"A reasonable step would be to implement the proposed two-month prescription period for frequently-prescribed medicines," he said.
Originally published as Medicine prices to rise under new chemist deal