No Chemist Warehouse conflict of interest, says Health Dept


The Department of Health has hit back at the Guild’s claims of conflict of interest, saying the King Review’s engagement of Deloitte was not inappropriate.

But the Guild says the explanation is not good enough.

George Tambassis wrote to Guild members to warn them that the Guild would pursue a Freedom of Information Request to hold the Review accountable after it engaged Deloitte to prepare an international literature review of pharmacy.

This was the same consultancy which had prepared Chemist Warehouse’s King Review Submission.

“The Department of Health has been made aware of certain claims made in regards to the due diligence of the Review Secretariat in procuring an international literature review to support the Review of Pharmacy Remuneration and Regulation,” the Department wrote. 

“This, and all other procurements conducted in relation to the Review, have been performed in line with the Commonwealth Procurement Rules and Departmental guidance to ensure accountability and transparency in decision making.

 “In regards to this particular procurement the Department was aware that Deloitte had previously undertaken work for a number of stakeholders in the community pharmacy sector, including community pharmacy banner groups, medicine manufacturers, and the Pharmacy Guild of Australia.

 “As these engagements were complete, the Department did not consider this prior experience to represent an actual conflict of interest. In addition, it was expected that the suppliers would have previously performed work in the pharmacy sector, as this was partly the basis on which they were approached for the Request For Quotation. 

“Prior to their engagement, the Department also sought additional assurances from Deloitte in regards to how they would manage conflict of interest risks.”

The Department also provided a statement from Deloitte, which said it takes conflicts of interest seriously.

“We acknowledge that in providing a range of services to clients in a given sector there is the need for extreme sensitivity to any risk of potential perceived or actual conflicts,” the consultancy wrote.

“Deloitte has an established system of quality controls designed to enable the firm and its personnel to comply with professional and ethical requirements, including identifying and managing potential conflicts of interest.

“When proposing to the Department of Health for the PRR, we concluded that no conflict existed. 

“In addition, we disclosed in our response to the Department of Health’s RFQ , the work that had been conducted across the sector for industry stakeholders including wholesalers, retailers and manufacturers. 

 “The scope of the engagement for the PRR was to gather literature on the models in place for the remuneration and regulation of community pharmacy in overseas jurisdictions and conduct a comparative analysis of the pharmacy models with Australia’s current pharmacy arrangements under the 6CPA.

“A literature review is an evaluative report of existing research and information. The engagement does not extend to providing recommendations or advice. “

But the Guild’s David Quilty said that this latest message fails to explain the “fundamental conflict of interest” of Deloitte working for the Review while providing a major report for the Chemist Warehouse submission to the Review.

“The Review should immediately publicly release all the materials relating to the commissioning of Deloitte so this very serious issue is accorded the necessary levels of transparency and accountability,” he said.

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