You can’t keep a good rent-seeker down. Following the release yesterday of the Draft Report of the Harper Competition Policy Review, which sensibly recommended the government free-up rules restricting the location of pharmacies and preventing non-pharmacists from owning a pharmacy, the Pharmacy Guild has hit back, rejecting the Draft Report’s recommendations and warning that it would endanger health care consumers:
The Pharmacy Guild of Australia rejects the Competition Policy Review’s draft recommendations that regulations governing the ownership and location of pharmacies be removed.
The Federal Government has made its position clear on this issue both before and since the election – expressly supporting the current pharmacy ownership model and the Location Rules.
The current model of community pharmacy serves Australian health care consumers extremely well…
The Executive Director of the Guild, David Quilty, said: “Australia’s 5450 community pharmacies, currently struggling under the pressures of price disclosure, need certainty and stability – not a constant push to abolish a system that’s working and replace it with an economic theory.”
The regulation around pharmacy including the Location Rules, ensures that health care consumers can get timely and equitable access to Pharmaceutical Benefits Scheme medicines wherever they live in Australia. The regulation has a clear public benefit, to which the competition review panel seems completely oblivious.
…[the changes] would destroy the investments and livelihoods of pharmacy owners, the jobs of their staff, and patient access to many local pharmacies.
The claim by the Guild that “Australia’s 5450 community pharmacies [are] currently struggling under the pressures of price disclosure” is quite frankly insulting to Australian taxpayers. Regular readers might remember that the previous Federal Government introduced minor changes to the Pharmaceutical Benefits Scheme (PBS), in which it shortened the time limit required for drug manufacturers to tell the Federal Government the price at which they sell medicines to pharmacists to 12 months from 18 months. These reforms were subjected to heavy lobbying by the Pharmaceutical Guild, along with calls for taxpayer compensation (on top of the $3 billion already received to dispense PBS drugs) – all because the time permitted to gouge taxpayers, and earn super profits as PBS drugs went off patent, was reduced. Seriously, you cannot make this stuff up.
As for their ongoing support of ownership and location restrictions on pharmacies – you cannot be serious. How do such restrictions benefit consumers one iota? As correctly noted in the Harper Draft Report: “such restrictions limit the ability of consumers to choose where to obtain pharmacy services and limit the ability of suppliers to meet consumers’ demands”. The Productivity Commission agrees, and has for more than a decade pushed for changes to pharmacy ownership rules to enable pharmaceutical products to be sold in supermarkets (amongst other places), describing the current restricted arrangements as adding “to health care costs for little apparent benefit”.
It’s rent-seeking pure and simple. The protectionism involved in running pharmacies is staggering. And pharmacists know they are onto a good thing, which is why they are defending their protected status with such bitterness and vitriol.
Of course, the Pharmacy Guild is also full of outrage because they had already been assured by the Coalition Government that their cosy protection racket would be off limits from reform. Health Minister Peter Dutton had previously thrown his support behind the Pharmacy Guild and blazed a media trail vowing not to wind back their protected status.
Meanwhile, as noted by the AFR Chanticleer today:
…the Chemist Warehouse chain of supermarket style pharmacies will continue to make a complete mockery of the rules limiting ownership of chemists by ownership and location.
The end result is that there remains little incentive to open pharmacies in rural and remote areas and pharmacy graduates are locked out of owning a small pharmacy.
Tony Abbott would do well to pull Peter Dutton into line and adopt the Harper review’s recommendations on pharmacies in full. Australian consumers and taxpayers have suffered long enough from this egregious protection racket.
