Harper attacks pharmacy rules

hand out for money - coins in palm

The head of a recent pharmacy review has weighed into the debate over the regulations governing the sector, saying the location rules don’t serve the public interest

In the latest of a series of articles about the rules appearing in mainstream media, News Corp national health reporter Sue Dunlevy has spoken to the Dean of Melbourne Business School, Professor Ian Harper, who chaired a review into the sector in 2015.

At that time, the Competition Policy Review – often referred to as the Harper Review – recommended the removal of restrictions covering both ownership and location.

The Review found the rules were unnecessary for ensuring quality of advice and care for patients, and limit consumers’ ability to choose where to get their pharmacy products and services.

It was slammed by the Guild at the time, during which negotiations for the Sixth Community Pharmacy Agreement were underway.

Now, Professor Harper has told Ms Dunlevy, who has in the past written a number of articles critical of the Pharmacy Guild and the pharmacy regulations, that “I make the point the location rules are not in the interests of consumers”.

The new article cites data from a Chemist Warehouse survey which found three-quarters of residents in 18 rural towns in NSW want the location rules to be changed so that discounters can open pharmacies in these areas.

More than half the residents who responded have delayed buying their medicines due to cost, it says.

The new poll included 790 people in towns including Bathurst, Wagga Wagga, Goulburn and Broken Hill.

At the time of writing, a Daily Telegraph reader poll showed that of 61 voters, 82% were in favour of changing the rules “to allow discount chemists into rural towns”.

Chemist Warehouse chief operating officer Mario Tascone told Ms Dunlevy that “Neither side of politics is interested in upsetting the status quo because the Pharmacy Guild is the most powerful lobby group in Australia and is a big financial contributor to both sides of politics”.

Meanwhile a spokesperson for the Guild told News Corp that

“Most PBS prescription medicines are dispensed to pensioners and concession cardholders where the price is within one dollar of the designated patient co-payment, wherever the medicine is dispensed including in rural and regional Australia.”

The new article follows a June 2019 story by Ms Dunlevy which reported that 325 Victorian country residents had responded to a similar Chemist Warehouse survey which showed 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.

At the time, Guild national president George Tambassis called the piece a “misleading shameless beat-up which 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”.

In June the Guild said the location rules prevent the clustering of pharmacies in more lucrative areas with a high socioeconomic index, potentially depriving people outside these areas of accessible pharmacy services.

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  1. Geoffrey Timbs

    What is stopping CWH from buying an existing pharmacy in any of the 18 towns and then implementing their discount model? The location rules don’t prevent them opening, they are just wanting to do so without the setup costs that apply to every other pharmacy

    • Tim Hewitt

      EXACTLY!!! that’s what I’ve asked.. CWH can BUY a pharmacy in ANY of those towns.. they already have one in Wagga (Lavington).. and they can open one up in any pharmacy-less town they want..My pharmacy is in a town of less than 2.000 people.. they can buy it tomorrow.. but will they??!!!
      It’s such a load for crap..and these so called street smart journos just lap it up..
      oh yes.. and why not trot out the Guild being a ‘powerful lobby group’ line yet again.. so original..
      No mention of the CWH owners sitting at the top if the Rich List etc.. you don’t see the Guild logo flashing around the fence at the MCG!!!

      • PharmOwner

        Of course CWH can buy existing pharmacies in these towns if they so desire. They don’t want to because small towns are not big enough to support the CWH model. CWH want the location rules scrapped so they can open up next door to profitable, independent pharmacies in plum metro locations and undercut them out of existence. CWH implying that they will open up in remote locations if location rules are scrapped is just a red herring.

      • Pete Tzimos

        LOL – thanks for the laugh Tim – I needed that today. Calling Sue Dumblevy a street smart journalist…..

        And agree – the whole CWH can’t open in small towns argument to get rid of location rules is just a red herring. A small town wouldn’t keep a CWH afloat – how many vitamins and supplements can you flog to the residents while making a loss on your dispensary – which is how the owners of CWH/My Chemist got into the top 50 rich list.

    • Terence Carling

      CWH have just purchased a pharmacy that went into administration in Armadale 6112 which is low – socioeconomic . Unfortunately, the previous owner owns the other pharmacy in the shopping centre and now CWH is the opposition.

  2. Willy the chemist

    Money buys influence and power. Those that keep repeating the Guild as powerful lobbyist should probably have a good look at themselves.

    Being on Australia’s most rich and powerful list isn’t powerful or influential? So what’s the definition of Rich List?

    No wonder we have little respect for journalists. Where’s their independence?

    As for experts of macro-economics & financial modelling, I’m even less impressed. Look at the financial sub-prime, derivatives and deregulations have wrought to the once great American manufacturing powerhouse. Today manufacturing is replaced by engineered financial products and complex derivative markets….what an unreal situation!

    Big businesses wants deregulation because then corporations can drain profits out of SMEs, small businesses so that they can continue to pay their CEOs and executives many thousands multiples of the average pays. What a great con!

    As far as I am concern, get rid of 90% of economists and the world wakes up normal tomorrow. No, in fact, I believe it will actually be a much better place!

  3. Still a Pharmacist

    “In June the Guild said the location rules prevent the clustering of pharmacies in more lucrative areas with a high socioeconomic index, potentially depriving people outside these areas of accessible pharmacy services”…. this is pure nonsense.

    People with high socioeconomic area values service and not cheap price. It is very unlikely that CWH will operate in those areas. CWH goes to low socioeconomic areas where rent is cheap and a lot of concession card holder patients are available.

    Every year, Guild is buying the political power and CWH is trying to get there.

    In my opinion, one simple solution can fix this problem. Abolish the location rule and change the ownership rule to ensure one pharmacist can own only one pharmacy (not 100% equivalent of one pharmacy). And no company can own any pharmacy.

    I can guess the opinion of Guild/Big pharmacy group about this solution. They want to kill small independent pharmacies by their banner group, but when CWH does the same thing in a smarter way, they are against it. Interesting.

    • Pete Tzimos

      CWH Brighton
      CWH Elsternwick
      CWH Elwood
      CWH Malvern
      CWH Hawthorn
      CWH Kew

      All high socioeconomic sububrbs of Melbourne and all have a CWH in them.

      “People with high socioeconomic area values service and not cheap price.”

      Plenty of us would have experienced many times customers demanding a price match – and when they open their wallets – the there’s a thick wad of pineapples in it. In one memorable example – guy complained about price – I had it for $2 more than CWH (Duromine 30mg) cracked it that I would not match it – walked out in a huff and got into a brand new Porsche Carrera. He also wasn’t borrowing the car – as he had the 15K watch on his wrist and the expensive clothes to match it. n=1 – yes maybe but I’ll never forget it.

      • Paul Sapardanis

        Not only are you 100% correct Pete but it is these high socioeconomic suburbs that there model works best. They use the difference in non claimable prescription pricing as a lure in, keep them waiting in store in the hope of discretionary spending on higher margin goods.

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