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.


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