If you want a prime example of how Australia has become a rent seeking entitlement economy, look no further than Australia’s pharmaceutical industry.
Recently, the Federal Government announced minor changes to the way in which it pays for Pharmaceutical Benefits Scheme (PBS) by shortening 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. The change in important, since when drugs come off patent, their price falls. And since the Government typically pays pharmacists the originally negotiated price for the medicine, pharmacies find themselves earning a nice fat margin when the manufactured price of drugs drop.
While any reasonable person would deem the announced PBS changes fair and equitable to all, the rent seeking Pharmacy Guild of Australia sees things differently, slamming the reform and decrying that they will cost jobs and livelihoods:
“While this doesn’t really change what most patients pay for their medicines, it will result in a very big fall in what pharmacies get paid, with a real risk that some will be forced to close”.
Thankfully, Health Minister Tanya Plibersek has so far refused to heed the Guild’s concern, instead citing benefits to the taxpayer:
“If the cost of medicines for pharmacists is dropping, then it makes sense that the price the government pays for these medicines should drop too – that’s fair, and it’s what taxpayers expect”…
“It means patients pay less for some medicines too, and gives the government headroom to list the newest drugs on the Pharmaceutical Benefits Scheme.”
For more than a decade, the Productivity Commission has been pushing for changes to pharmacy ownership rules to enable pharmaceutical products to be sold in supermarkets (amongst other places), and describing the current restricted arrangements as adding “to health care costs for little apparent benefit”. While this lack of competition works to enrich pharmacists, consumers, taxpayers and the broader economy are significantly worse-off.
And that’s not the only interest group stirred up by the election honey-pot. Clubs Australia has released a fawning video endorsing the Liberal Party’s planned roll-back of Government poker machine reforms for its members. Kevin Andrew dedicates plenty of oxygen to defending the policy shift as motivated by the goal of protecting problem gamblers, but the book-ending of the video by Clubs Australia tells you what it will really achieve.
You can’t reduce problem gambling and boost their profits.
