Behind the scenes

The Health Minister has signalled there may be potential for some amendments on price disclosure, says community pharmacist insider

Community pharmacist and owner of an independent pharmacy in Rozelle, NSW, Adele Tahan recently met with Health Minister Greg Hunt to discuss the industry.

She points out that community pharmacy is an area of small business that comes with its own range of challenges and issues.

“As a long standing community pharmacist at the coalface dealing with community healthcare challenges, I took the opportunity to bring some of these grassroots issues to Minister Hunt,” says Ms Tahan.

“It needs support from the government to continue employing staff and provide adequate services to its immediate communities.”

Ms Tahan is a Pharmacy Guild branch committee member, however she points out that she met with Minister Hunt representing herself and small business as a community pharmacist and owner, and not on behalf of the Guild.

She tells AJP the community is being led towards a model of “cheap offers” and disproportionate marketing by the big chains, not realising they are being short-changed in the healthcare advice and often chronic disease or mental health management that pharmacists have been offering for decades.

“If we do not take charge of these trends, we can see pharmacy going on the Amazon model, whereby drugs and prescriptions will be delivered by the postman after the click of a button. We have to stop this and bring the care back in health.

“I also discussed workforce with him saying quality pharmacists are leaving the profession due to the pay, however we can’t pay much due to price disclosure.”

Considering the impacts of the program, she said they discussed what can be changed under the price disclosure program.

“As it has been legislated, not much can be done with its frequency however there might be potential for a longer notification period,” says Ms Tahan.

Minister Hunt and the health department are also reportedly working on making direct exclusive distribution “more feasible” to provide better access for all stakeholders involved.

Minister Greg Hunt and pharmacy owner Adele Tahan.
Minister Greg Hunt and pharmacy owner Adele Tahan.

In July 2017, the minister announced a $16 million package to create a national real time prescription monitoring.

However not all states have come on board with the system, with the Guild repeatedly calling on the NSW government to implement real time monitoring in the state.

“It is both infuriating and depressing that NSW must wait on a Commonwealth real time monitoring solution rather than take initiative in the way Victoria has done,” said NSW Guild president David Heffernan last month.

Ms Tahan asked that Minister Hunt’s department promote this initiative in NSW, being the most populous state.

He was also very positive about vaccination and expanding the scope of pharmacists vaccination, commenting that the 2018 flu season has been very mild comparing to 2017, she says.

“I was very impressed by the minister and his detailed knowledge on all aspect of the matters discussed,” says Ms Tahan.

“He again confirmed his commitment to the ownership model of community pharmacy.

“Overall I felt that Minister Hunt and his department were very positive about community pharmacy.”

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  1. Bruce ANNABEL

    Indeed Minister Hunt looks very favourably upon community pharmacy and let’s hope he retains his position after the next election. I’m not sure his department bureaucrats hold the same opinion which has usually been the case for many years. Fortunately the minister has the clout at the end of the day.
    A couple of points worth noting are:
    1. that the worst of price disclosure is done and dusted even though modest cuts will continue unless someone changes the legislation. But fortunately the brunt is not borne by pharmacy because of the AHI fee introduced 1 July ’15 insulating pharmacy from the big hits manufacturers and wholesalers suffer. Instead pharmacy loses some generic and wholesaler trading terms only that are now quite modest.
    2. The February 2018 legislated changes to price disclosure now excludes those molecules that have been through 7 price disclosure cycles and any cut would be less than 30%. eg: rosuvastatin 23% cut set for 1 April 2018 didn’t occur.
    3. Those same legislation introduced big cuts to F1 drugs that are already having a major impact on manufacturers and wholesalers which do indirectly impact pharmacy via supply disruption. Again pharmacy is almost entirely insulated from these through various funding measures ie: a lot of the cuts endured by the supply chain are being given to pharmacy by the wonderfully supportive Minister. How and when will the supply chain react to this if more cuts are demanded?
    4. In my experience pharmacies that have avoided the hard and soft discounter models are paying their employed pharmacists well above the award. The data I have access to shows a strong bounce in dispensing profitability in 2017/18 to $12.31 (Gross Profit dollars per script) which is more than enough to make a tidy profit from dispensing and pay their professional staff appropriately. Again in my experience the discounters and those with excessive debt are forced to fund these by slashing overheads including wages that of course has a knock on impact on service levels thus allowing the market leading hard discounter to continue flourishing.
    5. There has been a flight to price by traditional community pharmacies and big banner groups which is a major mistake that, if not corrected, has the potential to continue decimating many professionals and of course the business owned by their employers.
    There is an alternative and it’s not too late – patient before transaction.

    • Paul Sapardanis

      Thanks again for your response to the article Bruce as your comments are always insightful. Until discounting is tackled though I feel we are fighting a losing battle. What do you charge a person who presents with a repeat from a discounter that has been dispensed with a sub $4 gp margain. I find it strange that as claimable rx has a floor margain $10.33c but non claimable rxs do not, in fact you can dispense at a loss if you like. Until we stop using our professional service as a loss leading marketing tool I don’t know where a heading as an industry

      • PharmOwner

        I’ve been faced with this exact scenario where a customer was most indignant and complained when she was charged a $10 dispensing fee on top of the cost of a pack of generic Augmentin Duo Forte. She claimed, correctly that CWH only charge $5.40 and also stated, incorrectly that it was “standard practice” for prescriptions to be charged at $5.40. This is a person who did not possess any concession card and living in a suburb where median house prices are well over $1,000,000. Explaining that CWH have different cost structures and provide differing service levels cut no ice with this lady.

        • Paul Sapardanis

          Unfortunately the better the area the less claimable prescriptions there are as a percentage. I have tried to advocate for a minimum dispense fee chargeable but to no avail. Many pharmacies make less per non claimable prescription than they do claimable ones even with the $1 discount

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