Govt has locked in ‘protection racket’ for Guild: PPA


pharmacy sign green cross

The pharmacist union has criticised a health amendment bill that removed the location rules sunset clause

Three weeks ago, the National Health Amendment (Pharmaceutical Benefits – Budget and Other Measures) Bill 2017 was welcomed as “good news” by the Pharmacy Guild of Australia, as one of the interlinked changes was the removal of the sunset clause on pharmacy location rules.

The bill was backed by the Federal Opposition with Shadow Health Spokesperson Catherine King saying: “Since 1990, rules have existed to limit how close a new pharmacy can be to an existing pharmacy. These rules have a sunset clause in the Sixth Community Pharmacy Agreement.

“This bill will remove the sunset clause, meaning existing arrangements will continue post 2020.

“Labor will not stand in the way of this change,” Ms King said.

Meanwhile, Professional Pharmacists Australia has criticised the “premature” passage of the Bill into law, which is argues “locks in unfair location rules that effectively run a protection racket for existing pharmacy owners”.

“By banning new pharmacies from entering the market within a radius of existing businesses, location rules lock employees out from owning their own pharmacy,” said Professional Pharmacists Australia President Geoff Marsh.

“The Federal Government has ignored the King Review by locking in location rules beyond 2020, along with every review of the sector for the past 15 years, which have argued for their removal.”

The PPA points out that the King Review interim report suggests it may be appropriate to remove the existing rules.

“The removal of the sunset clause on location rules by the Federal Government has deliberately pre-empted the findings of the King Review and undermine any evidence-based policy recommendations it may make,” says Mr Marsh.

“The Government has also ignored the community’s clearly stated opposition to location rules evidenced by the submissions made to the King Review.

“Thanks to the Turnbull Government the pharmacy industry continues to be ring-fenced from competition in Australia.”

The Pharmacy Guild has responded by saying PPA is “misguided” about location rules.

“Unfortunately the PPA displays a misguided understanding of the purpose and public benefit of the location rules,” said a spokesperson for the Guild.

“The rules deliver a viable pharmacy network for the benefit of all Australians, while also providing certainty and sustainability for thousands of pharmacy small businesses and their staff.”

Guild Executive Director David Quilty said in his latest editorial said that as a result of the amendments, which were supported by the Coalition, Labor and the Greens, location rules will ensure that all Australians will continue to have timely and equitable access to medicines through a well distributed community pharmacy network, 

“Location Rules provide a level of certainty for the owners of nearly 5,700 pharmacies who invest their private capital in the infrastructure that is required to deliver the PBS on behalf of the Commonwealth.

“It is reasonable and sensible to afford a level of regulatory certainty to the owners of these businesses, who as effective agents of government, are meeting the capital costs entailed in building and maintaining the national PBS delivery network,” said Mr Quilty.

“It is sometimes argued by opponents of the Location Rules that they are restrictive and anti-competitive because they prevent any pharmacist from opening up a pharmacy in any location.

“This misunderstands their public policy purpose and ignores the international experience when such Rules either don’t exist or are dismantled.

“The purpose of the Location Rules is to ensure that all Australians, regardless of where they live, have timely and equitable access to the PBS delivered through an efficiently distributed network of viable community pharmacies.

“The Location Rules encourage the establishment of pharmacies in areas of unmet or increased public need – including in rural and regional locations and outer metropolitan suburbs – while curtailing over-concentration in locations that are already well served by existing community pharmacies.”

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