Inside the 6CPA negotiations: George Tambassis

George Tambassis from the Pharmacy Guild signs the Sixth Community Pharmacy Agreement as Health Minister Sussan Ley looks on

The AJP spoke to Guild National president George Tambassis about changes to pharmacy markup remuneration, competition elements, why the Guild would rather work with than against GPs, and gives us a glimpse into the Agreement negotiations…

The Pharmacy Guild will continue to oppose the optional $1 copayment discount, national president George Tambassis has told the AJP.

However, overall the Sixth Community Pharmacy Agreement contains measures which mean five years of certainty for community pharmacy in an economic environment where stability is becoming increasingly rare, he says.

“Regarding the $1 copayment discount, we made it quite clear early on that we oppose that initiative, and feel that competition is already strong in community pharmacy in relation to prescriptions,” Tambassis says.

“We don’t accept it as a competitive element.

“We think that competition in under-copayments at the moment for general patients will grow even more, and so we can’t accept this as a competitive instrument, or accept the way it targets the chronically ill, and means that patients are not going to get to the safety net on time.

“The Government sees this as a savings measure, and they don’t need our tick of approval.”


Changing remuneration

Tambassis says the signing of the Agreement was contingent on making savings in order to be able to fund its other measures.

Unshackling pharmacy markup remuneration from the cost of medicines was a key focus for the Guild from early on, he told the AJP.

“The thing we’re most excited about is reforming the way we get paid in our dispensary remuneration,” he says. “We were very open from before the negotiations started that we’d try our best to get this happening, and so we’re delighted and proud of it; it was a joint decision but of course they had to agree to it.

“It was a reform the community pharmacy sector really needed.

“In my opinion the best way to negotiate is to be up-front with people; we were very up-front about the fact that the markup the way it was was causing a lot of harm. It used to be quite good years ago, but things changed.

“We described the situation to the decision-makers and they agreed that it was something we had to change.

“The AHI will cushion us from the constantly decreasing prices happening with price disclosure all off-patent medicines have to go through.”

The first tier of the AHI (where the Approved Price to Pharmacist – wholesaler PBS list price) – is up to $180.00) is $3.49; the fee will be indexed each year.

“Of medicines today, 83% of those cost less than $25, so you’re getting $3.49 instead of the previous markup on a $10 or $5,” Tambassis says.

“You’re still getting $3.49, indexed of course, in the next financial year, no matter what happens to the drug prices.

“So you can do your budgets again. You can go to your bank or your landlord with harder numbers, compared to having to rely on those price disclosure cycles coming through every quarter, and that’s going to mean pharmacies can plan for the future again. It was too hard, the way it was going.”


Expanding services

New and expanded pharmacy services are another result the Guild is excited about, Tambassis says, but stresses that this expansion doesn’t mean a declaration of war against GPs.

“This is really important. We keep advocating that pharmacy can do more, and these are the first opportunity for pharmacy to do that, to pick up people who are falling through the gaps, who haven’t got time to see their GP, or don’t want to see them, or have a huge waiting time or live in areas where GPs aren’t very accessible,” Tambassis told the AJP.

“I don’t see this as a competition thing. I see it as a fact that these patients are wanting another choice, and another avenue to go and alleviate their symptoms or solve their minor ailments.

“We’re going to give them that one more option. They can still go and see other allied health professionals or their GP, but the $600 million will give us many more opportunities to do more of the programs and services that we’ve been talking about for so long.”

A lot of the new and expanded programs will target patients who have difficulty affording the existing services of health professionals, he says.

“We’ve got a few programs lined up, especially working with the PSA, to go to trial straight away – but in a lot of cases, the opportunities are there now, maybe slightly more limited than they will be as of the 6CPA but pharmacies don’t have to wait,” Tambassis says.


Inside the negotiations

Tambassis says grass-roots Guild members played a “huge” role in helping it put its case forward.

“Everything we asked them to do, they did, and more. Their involvement was massive. They got involved with advocacy and with Parliament, in their own electorates and more – it was huge.

“It’s different talking to decision-makers than to your own colleagues, because as pharmacists, we live this: I’ve been a pharmacist for so long and often the language is quite technical; that’s something you can’t take for granted when you’re talking to decision-makers because I can’t think of one that was a pharmacist.

“They use different language, have different ways of thinking, have already spoken to other stakeholders and want to make sure their impressions of our profession are accurate; you have to change the language from time to time but still be true to yourself, and of course it was incumbent on me to explain the situation.

“When you’re dealing with the one person who holds the funds, it’s a different negotiation than any other I’ve personally been through.

“They have a responsibility, they don’t abuse it, they were careful and aware that there was a process they had to go through; this was different from other Agreements in that they had advice from Treasury that they had to find savings.

“So that was certainly a new thing, compared to the Agreements that John [Bronger] or Kos [Sclavos] negotiated; Health followed their processes to the letter and we had to work with that.”

The most important thing about the Agreement is that it provides five years of certainty for community pharmacy, Tambassis says.

“That’s something that shouldn’t be taken for granted – a lot of other professions don’t have anything near that kind of certainty,” he says.

“That’s by far, for us, the number-one benefit of this Agreement.

“People can really make the best of this. They can plan and invest in their business, their staffing, in making sure their patients get a real health benefit out of the new services they can provide and really make sure everyone gets the proper benefit of the Agreement.”

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1 Comment

  1. Steve Campbell Grant

    In this article refer to the AHI – an up to $3.49 increase on medicines costing less than $36 – as follows-

    “It was a reform the community pharmacy sector really needed…..

    The AHI will cushion us from the constantly decreasing prices happening with price

    disclosure all off-patent medicines have to go through.”

    I am concerned about the following. I do not believe Chemist Warehouse et al will adhere

    to this $3.49 increase – and – with so many discount chemists out there – how will these

    rules be enforced?

    Mr Tambassis – I do not believe the AHI will cushion independent pharmacies at all.

    Consumers will simply now have another reason to shop at the discounters.

    Effectively the Australian Government takes money away from chemists by devaluing stock on

    hand in the dispensary (the impact of price disclosure) and then expects the Australian

    public to foot the bill.

    The downward spiral of community pharmacy ownership continues.


    Steve Campbell Grant

    Owner – St James Pharmacy

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