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Pharmacist closed shop must end: Govt adviser

22 Sep 2014

A high-powered Federal Government review has declared that closed-shop restrictions on the placement and ownership of pharmacies do not benefit consumers and should be scrapped, intensifying the pressure on the embattled pharmacy sector.

In a blow to the Pharmacy Guild of Australia in its efforts to shield its members from increased competition, the Competition Policy Review ordered by the Government has recommended that rules dictating the location of pharmacies be abolished in the next Community Pharmacy Agreement due to come into effect on 1 July next year.

And the Review, led by economist Professor Ian Harper, has advised that laws prohibiting anyone but pharmacists from owning a pharmacy should also be abandoned.

“The current regulations preventing pharmacies from choosing their own locations, and limiting ownership to pharmacists and friendly societies only, are more restrictive than those in other health sectors (such as general practice) and many comparable countries,” the Review said in its draft report. “ impact in the case of pharmacists?” he told The Age. “It’s just irrelevant. All it’s doing is serving the interests of incumbent pharmacists.”

The Review said the restrictions limited the ability of consumers to choose where to shop for pharmacy products and services.

The Pharmacy Guild is fighting a rearguard action to hold on to privileges that shield its members from competition while simultaneously trying to expand pharmacist scope of practise to include health checks and vaccinations. Executive Director David Quilty said community pharmacies were “struggling” and “need certainty and stability – not a constant push to abolish a system that’s working, and replace it with an economic theory”.

But AMA President Associate Professor Brian Owler has accused the Guild of using the idea of pharmacist health checks as a bargaining ploy as it prepares for negotiations with the Federal Government over the next five-year Community Pharmacy Agreement.

Health Minister Peter Dutton insisted in early September that the Government had no interest in stripping pharmacists of current protections, but the Review’s report, coming on top of Commission of Audit recommendations for earlier this year, will heighten the pressure for a re-think.

The Review said that it accepted the need for some regulation of pharmacies given the pivotal role they play in primary health care.

But it said developments since the turn of the century had made justifications for the existing restrictive regime increasingly tenuous.

It said the rise of discount pharmacy groups, the proliferation of online prescriptions, and accumulated evidence about the effects of deregulation in other areas of the health sector all strengthened the case for change.

“Since 2000, there is a better understanding of how well other primary health care sectors operate without such anti-competitive restrictions,” the draft report said. “For example, ownership of medical practices is not limited to GPs, and nor are GP practices prevented from opening in close proximity to one another.”

The draft report is open for public comment until 17 November and the Review is due to present its final report to the Government in March 2015.

It can be viewed at:

Adrian Rollins

Published: 22 Sep 2014