DISCOUNT CHEMISTS THE NEW UBER: FORMER ACCC CHIEF BACKS PHARMACY DEREGULATION

Dana McCauley

August 15, 2019

Former ACCC chief Graeme Samuel has slammed governments for bowing to the Pharmacy Guild’s “political blackmail” at the expense of consumers, calling for deregulation to open the sector to competition and deliver cheaper medicines.

Professor Samuel, now an academic at Monash University, backed demands from discount chain Chemist Warehouse and convenience stores for Health Minister Greg Hunt to loosen the rules that protect small local pharmacies.

He said Australians were paying far too much for their PBS medicines due to the “anti-competitive regulations” in the sector, maintained over decades of “unashamed” lobbying of all levels of government by the powerful Guild.

“Pharmacists have been protected for so long, they’re the most powerful union in Australia,” he said.Advertisement

The Pharmacy Guild, which represents the nation’s 5700 small community pharmacists, remains fiercely opposed to proposed changes that would allow chains like Chemist Warehouse to open scores of new stores in regional towns.

A spokesman for the lobby group said it disagreed with Professor Samuel and that “far from being a competition-free zone, local pharmacies compete heavily on those medicines and other products where the price is not fixed by the Government under the Pharmaceutical Benefits Scheme”.

Professor Samuel said he often shopped at discount chemists as they offered prices up to 50 per cent lower and “the widest possible choice” of products.

“I’ve never had a question not answered and they always give advice,” he said, responding to the Guild’s argument that small local pharmacies offered a better service.

“They’ll all say three things: ‘have you had this before?’, ‘do you mind generic instead of branded?’ and ‘take this with food three times a day and don’t drink alcohol with it, you won’t be able to drive’.”

He said location rules – which prevent new pharmacies from opening near existing ones – and restrictions on who can own a chemist shop, and how many, should be scrapped in favour of a single rule to govern the sector.

“No PBS drug should be able to be issued to a consumer without a fully-qualified pharmacist. Once you’ve got that rule in place, nothing else is needed to protect the consumer.”

Mr Hunt, who is consulting on a new Community Pharmacy Agreement to govern the sector from mid-2020, said the government was “deeply committed” to providing affordable access to PBS medicines and was leading “early and inclusive negotiations” on the updated rules.

Professor Samuel said governments ought to have learned from the other industry to have been safeguarded from pro-competition reforms of the 1980s and 1990s: taxis.

He said Jeff Kennett’s move to exempt taxis from anti-competition laws had only resulted in the cost of their licenses skyrocketing, making the impact all the more brutal when the inevitable forces of disruption shook the industry.

Discount chemists were the new Uber, he said, and like ride sharing should be allowed to operate for the benefit of consumers.

The Pharmacy Guild argues that its members must be protected or country towns could lose their local chemists if competition forced them to close their doors.

“An unregulated market and the removal of location rules would lead to a clustering of pharmacies in affluent areas, while areas of genuine demand and need would be under-serviced,” the spokesman said.

Professor Samuel said that in regional towns too small to sustain a standalone post office, bank or pharmacy, the three services could be combined into a “multi disciplinary outlet”.

“Provided there is a fundamental obligation that chemist-only medicines, including PBS scripts, can only be dispensed by a qualified and registered pharmacist, a discount pharmacist can be expected to establish itself in a regional town, supplying not only pharmacy services, but also [these] other services,” he said.

“A discount pharmacy, with its innovative culture has the potential to provide a regional town more services than are currently available, more choice of product – and at lower prices.”

In 2004, the Guild wrote to then-prime minister John Howard threatening to unleash a damaging campaign against his government if it imposed competition rules on the pharmacy sector, a strategy Professor Samuel described as “straight political blackmail”.

The Guild spokesman said Australia had “a very good subsidised medicine system in the Pharmaceutical Benefits Scheme, meaning that most life-saving medicines cost the same or close to the same price wherever patients obtain them from a local pharmacy”.

“The prices of non-subsidised medicines may vary across regions depending on market forces and other cost factors,” the spokesman said.

“If patients are concerned about the cost of medicines they should talk to their pharmacist, including about the availability of cheaper generic medicines.”