Guild hits back at location rules ‘beat-up’

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The Pharmacy Guild has slammed reports on Chemist Warehouse data which found rural and regional Australians are driving long distances for cheaper medicines

News Limited media reported this week on Chemist Warehouse data which found that two-thirds of respondents had driven to another town to save money when filling scripts, and of these, more than 85% had driven more than 50kms.

The data is from a survey of 325 Victorian country residents which was conducted on behalf of Chemist Warehouse by Thrive research.

The cost was cited as the main factor influencing such decisions.

The data found that around 60% of respondents had put off buying medication due to the cost, while more than 70% wanted a discount pharmacy to open in their town, agreeing the legislation should be change to allow for greater pharmacy competition in smaller rural centres.

News Corp reporter Sue Dunlevy – who has in the past authored a number of articles critical of the Pharmacy Guild and the community pharmacy sector more widely – wrote an article for the organisation’s publications this week titled, “The chemist monopoly that means you pay more for medicines”.

“A chemist monopoly is forcing many Australians to drive hundreds of kilometres to save thousands on the cost of life-saving medications,” the article began.

“Patients in the bush are paying three times more than people in the city for life-saving medicines because of monopolistic rules backed by the Pharmacy Guild of Australia.”

Ms Dunlevy wrote that some patients are “forced to drive 100 kilometres” to have scripts filled at discount pharmacies in order to save at least $1,000 yearly on scripts.

She interviewed “former competition tsar” (former head of the ACCC) Graeme Samuel who said that “the public’s needs are best served by low prices for scripts and convenient hours but the incumbents (chemists) say we don’t want that to happen”.

Ms Dunlevy wrote that the location rules have been “progressively tightened at the behest of the powerful Pharmacy Guild of Australia to stymie the expansion of discount chemists like Chemist Warehouse”.

“The rules protect existing chemists in country towns from competition and mean country people are paying $20 for commonly used medications like cholesterol lowering atorvastatin which is sold for as little as $6 per script by discount chemist chains,” the article says.

“Residents in these towns are also missing out on the $1 discount on the patient charge for subsidised medicines which is opposed by chemist owners represented by the Pharmacy Guild of Australia.”

A piece by the editor of Queensland’s Courier Mail also weighed in on the issue, stating that pharmacies are a “seriously inefficient” sector.

“While people in metropolitan Australia can have easy access to the chemists of their choice – with some limited restrictions – those outside the big population centres can find themselves with some harsh realities,” the piece says.

“During the 1990s the powerful pharmacy lobby ensured that only a pharmacist could own a chemist shop and no-one could open a new retail store selling pharmaceuticals within 1.5 kilometres of an existing outlet.

“This might not be much of a problem when someone in a Brisbane suburb can drive five minutes and find a different chemist store to buy drugs and get prescriptions filled. It is not such an easily managed inconvenience when people are living in a small town far from the next place that might have another chemist.

“These rules can impose big costs on remote area consumers. According to new calculations, some consumers are paying three times more than people living in cities because of these monopoly protections.”

A Guild spokesperson told Ms Dunlevy that the organisation was “absolutely unapologetic” about the Location Rules.


A ‘misleading shameless beat-up’

The Pharmacy Guild called Ms Dunlevy’s article a “misleading shameless beat-up”.

“The Location Rules have played an important and beneficial part in sustaining the effective network of community pharmacies in Australia – a network which benefit patients wherever they live,” said National President of the Pharmacy Guild, George Tambassis.

The Guild said that the article “ignored the benefits of the community pharmacy model, the availability of generic medicines, and the safety net mechanisms of the subsidised medicine scheme, the PBS”.

It said that for almost 30 years, the Location Rules have ensured a well-distributed network of community pharmacies supplying PBS medicines and patient services.

“The purpose of the Location Rules is to ensure that all Australians have high levels of access to PBS medicines and related services, delivered through a well-distributed network of community pharmacies,” said the Guild.

“The Location Rules ensure that community pharmacies are established where there is a genuine community need, creating a viable network across the country where patients need timely and equitable access to medicines.

“The Pharmacy Guild has published empirical evidence to demonstrate that the current regulation of community pharmacies is delivering high levels of access, choice, competition, equity and quality for consumers.

“For example, 87% of Australians live within 2.5km of at least one pharmacy. This is not an accident of the market – it is a direct result of the Location Rules policy. The level of access for community pharmacies is higher than for supermarkets, banks and medical centres in both capital cities and in regional areas.”

The Rules prevent clustering of pharmacies in more lucrative, higher socio-economic areas, which could deprive patients—particularly those who cannot travel longer distances and those living in rural areas or lower socio-economic outer metropolitan suburbs—from having timely and convenient access to a local pharmacy, the Guild said.

A Chemist Warehouse spokesperson commented on the data here.


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