Last week, I noted how the Phamacy Guild was seeking an additional $150 million in assistance from the Government (on top of the $3 billion phamacists already receive from taxpayers) as compensation for minor reforms to the way in which the Government pays for the Pharmaceutical Benefits Scheme (PBS), by shortening the time limit required for drug manufacturers to disclose the price at which they sell medicines to pharmacists to 12 months from 18 months.
The Pharmacy Guild argues that the changes to pharmaceutical manufacturing disclosure rules would severely disadvantage pharmacists, since the Government would be quicker to reduce its subsidy on PBS drugs that have come-off patent and whose prices have dropped, providing pharmacists with less opportunity to earn fat margins (i.e. the difference between the now lower price they pay for the drugs and the original high subsidy they receive from the Government).
Thankfully, the Government is standing firm, refusing to yield to the Guild’s demands and its scare campaign that the reform would result in the closure of pharmacies and reduce services. The Health Minister, Tanya Plibersek, has reportedly gone on the offensive, writing to every Labor MP in the country with key points to use when rebutting claims made by the Guild. From the AFR:
“Patients quite rightly value their community pharmacy. The government also values community pharmacy. There is no reason, however, for patients and taxpayers to pay the old inflated prices for medicines which have dropped in price”, Ms Plibersek writes…
“[Compensation payments] would substantially reduce the benefits of price reductions that the government had negotiated with drug manufacturers, and result in lost benefits to patients and taxpayers.”
There is a belief within the government that the Guild has “overstepped” with its latest campaign and pushed the boundaries of public support.
This is a small win for sound public policy. Any objective, reasonable person would deem the announced PBS changes as fair and equitable to all, and its only the self-interested Pharmacy Guild that sees things differently.
The question now is, will an Abbott-led Government follow through with the reforms and also refuse to pay “compensation”, or will it follow its own lead on the Fringe Benefits and Mining Taxes and bow to the rent-seekers?
