Are you paying too much for PBS meds?

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Australians have been paying too much for prescriptions and pharmacy products for too long, says Graeme Samuel, the former head of the Australian Competition and Consumer Commission (ACCC).

He is accusing the Pharmacy Guild of “political blackmail”, saying successive governments have failed to stand up to its tactics and that consumers are paying the price.

Professor Samuel, now an academic at Monash University, wants Health Minister Greg Hunt to loosen the rules that protect small local pharmacies.

The Government is consulting on a new Community Pharmacy Agreement to govern the sector from mid-2020, with Mr Hunt saying it is “deeply committed” to providing affordable access to Pharmaceutical Benefits Scheme (PBS) medicines.

Prof. Samuel says Australians are paying too much for their PBS scripts due to the “anti-competitive regulations” in the sector, maintained over decades of “unashamed” lobbying of all levels of government by the Pharmacy Guild.

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

Current rules restrict new pharmacies from opening near existing ones, and dictate who can own a pharmacy and how many. Prof. Samuels believes this hinders competition and prevents heavy discounting of PBS medicines for pensioners.

Australia’s largest pharmacy retailer, Chemist Warehouse, is among those pushing for more competition in the sector. Convenience stores, including 7-Eleven and Caltex, also want to sell prescription medicines, claiming this type of service is near the top of their customers’ wish lists.

Jeff Rogut, chief executive of the Australasian Association of Convenience Stores, said: “When we do surveys of our customers, pharmacy ranks up there with things like postal services as one of the top items they would like to see in a convenience store.

“The reason why is because of the extended hours, the ability to park easily, get in and out quickly and do all the things they want to do … it would save them time and be more convenient,” he told The Age.

However, the Pharmacy Guild, which represents 5700 small community pharmacists, is fiercely opposed to the sought-after changes.

A spokesperson for the group said it disagreed with Prof. Samuel’s views 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”.

Prof. Samuel is firm that PBS drugs should be issued only by qualified pharmacists, but said discount chemists were suitably staffed. He added that products could be up to 50 per cent cheaper at warehouses than at traditional pharmacies.

“No PBS drug should be able to be issued to a consumer without a fully qualified pharmacist,” he said. “Once you’ve got that rule in place, nothing else is needed to protect the consumer. I’ve never had a question not answered and they (discount chemists) always give advice.”

The Pharmacy Guild says Australia has “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,” a spokesperson said.

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

Are you concerned that you may be paying too much for prescription drugs at your pharmacy? Would you support deregulation?

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Total Comments: 10
  1. 0

    I use an ear drop on prescription that varies in price from $8.90 to $22.80.

    I now go get it from the cheaper chemist. It is best to shop around. You can ring and request prices. The cheaper chemist is not in a Westfield or Lend Lease Centre with high rents. They also have less staff and are part of a large chain which also sell online.

    Also carefully check use by dates.

  2. 0

    Removing protection for small pharmacists will most likely see them forced out of business by the big pharmacy chains and supermarkets if they are able to get a licence to sell prescription drugs. We have all witnessed how agressive the big players are towards the smaller retailers.
    As the article says PBS meds are the same or close to no matter where you buy them. I wonder how much some are paid by the big players to lobby governments etc.
    Competition is good but it’s when it becomes a monopoly that’s not good for the consumer.

    • 0

      Good points there Karl. A supermarket would only stock the fast moving drugs which would mean visiting a pharmacy for the slower items except they may no longer exist as a reduction in business may make them less viable.
      Pharmacies are more like beauty product markets these days, especially Chemist Warehouse, so perhaps a solution to the high price of drugs would be price control on them but that won’t happen.
      The drug companies wield a lot of power through expenditure of largesse to decision makers so perhaps they need to be reigned in. If we ever sign a free trade agreement with the U.S. that will be the end to reasonably priced drugs as they do have their eye on our PBS system and want that shut down.

    • 0

      I have to agree, Karl, I hope the push from Graeme is not hijacked by the large businesses such as supermarkets to destroy the quality of services by replacing it with their low-cost, poor-service models meant to only increase their profits.
      Tanker, maybe the drug companies could also push for this deregulation, as they may wish to have cozy deals with big supermarkets.

      Another point in the report is the inaccuracy of Graeme Samuels’ comment “Pharmacists have been protected for so long, they’re the most powerful union in Australia,” – in fact, the Doctors unions are the most powerful and the biggest rorters – they charge excess fees by hundreds and thousands, compared to a few dollars by pharmacists, and needs urgent Govt action to put restrictions on them not to charge more than a maximum percentage above the standard Medicare fees.

  3. 0

    Really you lot are too old and set in your ways.

    The Pharmacy Guild are the biggest bunch of protected rorters out there.

    If it wasn’t for Chemist Warehouse, you would not be able to get cheaper PBS scripts, and they are ripping us off as well – just don’t make the mistake of going anywhere else.

    The supposed dispensing fee is a total rip off

    The other pharmacy’s charge the most for PBS….

    Good luck with your projects

  4. 0

    has anybody noticed that when we get cost of living rise in the pension (2 a year) the price of prescriptions go up as well,not by much maybe 10 cent extra dont know the exact amount anyway just watch after the September pension rise

  5. 0

    When asking my pharmacist why Diamicron has gone up about 33% I was advised that the government increased the price as it didn’t want people buying Diamicron as a new generic version was now available.Slowly losing faith in the system.

  6. 0

    It’s a bit rich for Caltex to be involved in any discussions about affordability.

  7. 0

    So their answer is ‘more competition’ – why not just say PBS is pegged at a certain level – thanks all.

    What’s with this ‘business model’ of ‘privatisation’ at every turn? Hasn’t worked yet – why would it work now?



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