Power over the public interest

There are some big questions to answer about where the money that Australians spend on their medicines and pharmacy products really ends up. It is an industry set up to serve the public interest and plays a critical role in the health system. But the new pharmacy agreement released by the Federal Government ensures that it continues to serve a very narrow set of special interests.

A lot of money is spent on pharmacy by consumers and the price of medicines continues to rise, not to mention the $18 billion-dollar investment by taxpayers into pharmacy each year.

Yet the people who do most of the work – employee pharmacists – are the lowest paid professional health workforce in the country, earning as little as $30 per hour. This is despite the fact that they complete a 5 years degree equivalent to that of many doctors.

Instead, what we see is a small number of individuals who own pharmacies raking in the profits and literally fencing off their industry from competition.

The power of special interest groups in Canberra is never clearer than the case of the Pharmacy Guild and the ‘location rules’ approved by the Federal Government which act like a protection racket for the richest and most powerful pharmacy owners.

What the rules do, is to ban new pharmacies from setting up within 1.5 kilometres of an existing pharmacy business. It stifles competition, increasing prices and makes it nearly impossible for working pharmacists to start their own business, locking them in a cycle of low paid work. This is one of the main reasons that almost half of all working pharmacists are considering leaving the profession or have already decided to do so based on latest research.

Despite a series of public reviews which all recommended removing these rules including the most recent King Review in its interim report. Not only did the Government ignore the recommendation, the rules would have expired in 2020 under a sunset clause without any action, but the Government actively stepped in with new laws before the final report was released that enshrined them into the future.

Just over 5 years ago, the Harper Review of competition rules found the rules were "anticompetitive", restricting customer choice and should be abolished. This came only one year after the National Commission of Audit recommended better competition in the pharmacy sector through deregulation of location and ownership rules with pharmacists dispensing medicines at supermarkets one option explored. Ten years earlier the Productivity Commission found that these pharmacy rules increased costs for consumers.

Not only did the reviewers believe location rules should be abolished, the King Review interim report says “few, if any, submissions to the Review approved of all aspects of the current location rules.” It also highlights the fact that regional communities’ access to pharmacy are “reduced as a clear cost of the rules” yet these considerations have been trumped by a Government which is willing to place the demands of business lobby groups like the Pharmacy Guild ahead of the public interest.

When protection rackets for business are allowed to influence independent public policy reviews in critical areas of policy like medicines, we have a major problem in this country – one worthy of investigation.

Ultimately it is the taxpayer and health consumers who suffer, and our elderly and most vulnerable Australians are most at risk. Not only are people paying more and more, but as the population ages, people are living with multiple chronic conditions and rely on multiple medications. These problems require a health approach based on innovation and that requires competition in the community pharmacy sector.

But currently too many people end up sicker and in hospital due to medicine related problems and we desperately need greater competition to drive new approaches. It is critical people use their medications properly, use the right medication, that we check the medication is working and is not causing harm. Yet the current system focuses on filling pockets of big pharmacy owners for the supply of drugs rather than focusing on care.

Employee community pharmacists know far more can be done with the over $18 billion-dollar investment by taxpayers into pharmacy but there is little realistic opportunity for these staff to ever open their own business or provide care under the current model.

We need to open up this industry to generate innovation and competition which would drive prices down and patient outcomes up. At stake is the health of our elderly and most vulnerable Australians.

Geoff March is President of Professional Pharmacists Australia