CWH in ‘self-serving spin,’ says Tassone


A Channel Nine news report featuring claims that consumers want pharmacy to be deregulated has been criticised by pharmacists

Channel Nine reporter Emily Rice took a look at the price of scripts across different pharmacy groups on Monday night, in a Nine News piece which featured former ACCC boss Graeme Samuel.

In the leadup to the beginning of 7CPA negotiations and since, Mr Samuel has been speaking out in the mainstream media, calling for deregulation in order to permit discount pharmacies to open in areas they do not currently service.

Ms Rice outlined that Chemist Warehouse charges $5.50 for irbesartan, while Priceline charges $14.95 and some independent pharmacies charge $21.75.

Meanwhile Chemist Warehouse charges $5.99 for atorvastatin, compared to $10.95 at Priceline and $18.76 at independents; and $5.50 for amoxicillin, compared to $18.76 at an independent.

She said that esomeprazole costs $8.50 “at the discount chains” (in which she includes Priceline) and $20 at an independent.

“When they’re having very high turnover they’ve got substantial buying power and that keeps their wholesale costs down,” Mr Samuel told Nine.

He believes prices could drop further if the pharmacy sector is deregulated, Ms Rice told viewers.

“Pharmacies are regulated in an anti-competitive fashion,” Mr Samuel said. “The consumer is saying, this is what we want.”

Ms Rice also spoke to the Pharmacy Guild Victorian branch president, Anthony Tassone, who said that, “If we actually got rid of pharmacy ownership restrictions, we would have pharmacies owned by less players, less diversity, less choice and actually get less competition at the end of the day”.

She also interviewed Chemist Warehouse pharmacist Leah Bartolotta, who said that, “We save our clients, or customers, hundreds of dollars every year, so it’s huge.”

Mr Tassone was one of several pharmacists who later queried Channel Nine’s treatment of the issue.

“There have been times recently when responding to media enquiries about regulation in community pharmacy that you can feel like you have accidentally stumbled onto the set of ‘The House of Wellness’ or some other advertorial for the Chemist Warehouse group,” Mr Tassone told the AJP.

“With recent reports in the Financial Review about a potential listing on the Australian Stock Exchange related to the Chemist Warehouse group next year, one has to wonder whether all this noise being generated in the media is about gaining momentum for this occurring? 

“An unravelling of the community pharmacy model in terms of deregulation of pharmacy ownership and location rules would suit very nicely for a listing on the stock exchange to allow anyone to rush in to get a piece of the action.   

“The community pharmacy model is far more important and critical to the primary healthcare needs of Australians than the exit strategy of a couple of individuals on the BRW rich list.”

Mr Tassone said the Guild supports the concept of making medicines more affordable for all Australians, hence its opposition to the controversial optional $1 copayment discount, and its suggestion that the patient co-payment be lowered across the board, funded by the Government through the PBS.

And medicines are already becoming more affordable, he told the AJP.

“The lowering of the Safety Net threshold for concession card holders to 48 prescriptions (down from 60) commencing in 2020 will help make medicines more affordable for some of our most vulnerable and at risk patients,” Mr Tassone said.

“Reforms to the PBS through price disclosure are estimated to have saved the taxpayer approximately $20 billion over the forward estimates since their introduction over a decade ago. This has allowed the headroom for new listings on the PBS and we believe, help lower the co-payments for all Australians on all claimable prescriptions.

“Over 70% of prescriptions dispensed in Australia attract a PBS subsidy meaning the price is largely the same whichever PBS approved pharmacy you visit across Australia.

“If you exclude ‘under co-payment medicines’ i.e. medicines for general patients under $40.30 for which there is no subsidy… then pensioners and concession cardholders are the recipients of around 90% of subsidised scripts.”

Reiterating his words to Nine, he warned that a deregulation of pharmacy ownership will lead to similar outcomes in other industries: “a concentration of ownership with fewer players, less competition and big corporates answering to their shareholders first and foremost rather than patients”.   

“We have seen it overseas with what ends up happening to pharmacy ownership and there is no reason to believe it wouldn’t happen in here if we followed the same mistakes as others,” Mr Tassone said.

“Pharmacist only ownership of pharmacies is in the public interest as pharmacists put patients first. In previous consumer surveys, the majority have indicated that have a clear preference that health professionals own their own practice.

“The 5700-plus community pharmacies across Australia are currently owned by over 4000 individual pharmacist proprietors. 

“This is far more competitive than any other less regulated industries we have in Australia such as; supermarkets, petrol stations and convenience stores all wanting ‘in’ on community pharmacy trying to have us fooled the end game will be more competition.

“Anyone who thinks a deregulation of pharmacy ownership will somehow lower medicine prices has not been taking notice of unscheduled over-the-counter medicine pricing, where in previous CHOICE surveys have shown that supermarkets were no less expensive (and usually more expensive) than pharmacies in this product category.  How is this going to be any different in prescription medicines where the vast majority of prescriptions receive a direct PBS subsidy anyway?

“In other words, when economists such as Graeme Samuel or Stephen Duckett say there is no competition among pharmacies and that pharmacy is a monopoly – we say there is plenty of competition where the price is not fixed by the Government PBS scheme – and pharmacy is hardly a monopoly when there are over 4,000 owners of more than 5,700 community pharmacy small businesses.

“When Chemist Warehouse claims as it did recently that medicines cost three times more in rural areas than in the city because of location rules they really are engaging in self-serving spin.

“While they may be able to find an aberrant example here or there, there are literally millions of cases of subsidised medicines being dispensed under the PBS across Australia with no such price disparity.”

While some viewers commented positively on the piece, others shared Mr Tassone’s concerns.

Biased report that encourages chaos in Pharmacy market,” one viewer responded on Facebook.

 

Previous Measles comes to Perth
Next Training for GP pharmacists

NOTICE: It can sometimes take awhile for comment submissions to go through, please be patient.

6 Comments

  1. Tim Hewitt
    03/10/2019

    Isn’t it weird??.. Government and the press don’t like the ‘rip-off’ of the supermarket duopoly.. and they don’t like milk being (effectively) given away (help producers!…consumers want to pay more! its too cheap!).. but it seems that Mr Samuels (who used to hate woolworths etc), now wants a pharmacy /monopoly/duopoly/ whatever-opoly.. to do exactly what has happened in the food sector to happen in the pharmaceutical sector.. let it happen and in a few years he will be crying foul!!

    and yes, at present there is NO reason or advantage for a pensioner to go to a discount pharmacy (unless they like to stand around waiting for a long time..).. and the only weapon discounters have is price, so they want to give pensioners a financial incentive to go there.. ie free script.. pretty basic, pretty crude, pretty cynical..

    and as for what’s in it for Graeme Samuels?.. who knows.. he certainly wasn’t singing that tune when he actually was somebody..(and would have had to explain himself..).. maybe he’s on the pension these days.. ha ha

  2. Bruce ANNABEL
    03/10/2019

    Well put Anthony and Tim. CWH offer some customers what they’re looking for or if you a value proposition that appeals to them. Sure they get low price and wide range but they trade away several benefits that are often found in traditional conveniently located community pharmacies. CWH can promote their offer and they do so very very well and on the flip side it’s up to community pharmacy owners to promote what they offer their patients which at the very least is location convenience (saves people time) and in some cases absolutely fantastic pharmacist professional health service and services. The point is that anyone can discount but it’s tough to maintain and in so doing overheads must be minimised at all times which is the weakness of the hard discounter because it impinges on their ability to offer that pharmacist professional health service I’m referring to. Arguably there is a great deal of value perceived by patients in that style of pharmacy offer. If all pharmacies cut price commoditisation results and won’t that impinge on the ability of these pharmacists to deliver high quality and extensive professional service services to patients in need of health advice and solutions?

  3. PharmOwner
    03/10/2019

    No mention also about how CWH subsidises cut-throat private script pricing by selling mountains of useless crap that does nothing except separate money from the wallets of their customers. Witness: Bioglan “Melatonin”, and God knows what else they’re willing to peddle. Also no mention that they are much like supermarkets in that they charge suppliers for premium eye-level shelf space and also charge them to be featured in their catalogues. CWH are not real pharmacies, they are supermarkets in disguise.

  4. Ugh
    07/10/2019

    This really made me quite angry. I have been in this industry for nearly 20 years and have seen the damage CWH have done over time. More people need to be taking Channel 9 to task over this so called news article. It was just an advertisement for them, plain and simple. People also need to be bringing up Channel 7 and their “Wellness” show which is once again just an advertisement. they have gotten away with too much for too long now.

    • TALL POPPY
      07/10/2019

      It’s not just CWH though is it? It’s the ever-growing ‘me-too’ discounters out there also. Some go to the extent of even copying the CWH colours within 0.1% accuracy. It’s essentially 70-80%+ of the pharmacy industry today. The self-serving rot continues to grow. If you’re still in the industry I hope you are happy!

      • Ugh
        08/10/2019

        I am still in the industry. I started as a Pharmacy Assistant at the age of 18 and am now a Dispensary Tech. I have only worked in two pharmacies in my 20 years, both small community pharmacies. I would never work in a CWH or “copycat”, I would never lower my standards.

Leave a reply