Opinion piece hits nerve


An article calling for supermarket ownership of pharmacies, dumping of CPAs and minimum $100K salary for experienced pharmacists has drawn the ire of industry reps

Published online, the piece has levelled some serious criticism at the Pharmacy Guild and in the process aligned itself with the pharmacists’ union PPA.

Business consultant Michael Rhodes, director of Rhodes Management and author of the piece, said he wrote it in response to requests from a number of industry pharmacists for him to provide “an independent perspective” on where the pharmacy industry is heading.

“It’s not my position to espouse what pharmacists do,” Mr Rhodes begins his article.

“I’m not a pharmacist, I am an industry strategist (among other things). However I’ve researched enough to know what is right and what needs fixing.”

In the piece Mr Rhodes argues the Pharmacy Guild’s strategy in support of location rules and pharmacist-only ownership “does not serve the interests of the broader community”.

“Should the major supermarket chains be permitted to enter the pharmacy industry and dispense prescription medicines? The overwhelming answer is ‘of course they should be’,” he says.

“Restricting the supply of anything only increases price which [is] inflicted on those least able to pay in the community. It perpetuates inefficiency and high government costs.

“Australia still pays the second highest price for prescription medicines in the world, which is manifestly unacceptable.”

Mr Rhodes then details a “phased approach” whereby supermarkets offer to buy pharmacies that are strategically located adjacent to them.

“There is no doubt some pharmacies will close, but the overall reality is that net numbers of pharmacy outlets will increase and this is good for pharmacists, consumers and most importantly good for price.”

He even argues that “the very notion of a CPA should be dumped” altogether and replaced with an alternative called that Value Based Efficient Supply of Medicines in Australia, which the Department of Health should ultimately be accountable for.

The Pharmacy Guild, the prime target of the article, disagrees with the premises of the article, and a number of PSA members have also written to Mr Rhodes criticising the piece.

“Mr Rhodes’ piece appears to be a subjective narrative and opinion piece,” says Anthony Tassone, President of the Pharmacy Guild of Australia (Victoria branch).

“It doesn’t substantiate what the health benefits are of the sector, and how they would be impacted by deregulation.

“The Pharmacy Guild of Australia, through its submission to the Harper Review, provided substantive evidence, cost-benefit economic analysis and consumer surveys that provided evidence that there was a cost-benefit to location rules and pharmacist ownership,” Mr Tassone tells AJP.

Surveys reveal consumers are happy with the current model of pharmacist-only ownership, he adds.

Others have written on social media saying the deregulation of pharmacy in other countries has actually driven up the price of medicines because a monopoly eventually develops.

The Guild has said in its 2016 submission to the King Review that it “strongly supports the tried and tested community pharmacy model, which is underpinned by location rules that ensure that Australians have high levels of accessibility to medicines through a well-distributed network of community pharmacies that are owned by pharmacists who have a professional obligation to deliver quality health outcomes for their patients”.

“The prohibition within the location rules in relation to the co-location of approved pharmacies in supermarkets should be retained,” says the Guild, adding that there is “clear evidence of their social benefits as well as meeting the objectives of the National Medicines Policy, particularly in terms of access and efficiency”.

The Guild also argues that “as the recognised representative of the majority of community pharmacy owners who fund and manage the infrastructure to deliver the PBS to patients”, it should continue to have responsibility for negotiating future CPAs with the Federal Government.

Pharmacist pay

The article also calls for higher pharmacist wages and a transformed role through the deregulation of sector.

“The average salaries of pharmacists is less than that of certain trades (those with cert 3 TAFE level qualifications, school teachers and other professions, and absolutely none of these professions is responsible for human health care advice, sometimes which is critical,” says Mr Rhodes, adding that “it has to change”.

“The problem stems from the fact that pharmacy outlets are now quasi-retail outlets … if supermarkets were allowed to enter the industry, this would provide a more compelling career path for pharmacists beyond the current stale ownership model that now exists. It would also drive the up demand for qualified pharmacists.”

He argues that all pharmacists with a minimum of six years’ experience should be on a minimum salary of $100,000 per annum for 40-45 hour work weeks.

In his view, there should be no penalty rates, and all pharmacists should be entitled to two full contiguous days in a row off per week.

And in addition, he argues that pharmacists should be compensated 50% of dispensing fees, which would provide them with additional compensation commensurate with the responsibilities they undertake.

“Because it is paid directly to the pharmacist as taxable income, it would not hinder cash flow management in the existing business,” he says.

In regards to Mr Rhodes’ call for higher pharmacist wages, Mr Tassone says “Mr Rhodes does not appear to acknowledge the high costs of pharmaceuticals” to pharmacy owners.

“Pharmacist remuneration is the subject of a case before the Fair Work Commission now, with a process of consideration currently occurring,” says Mr Tassone.

Others have suggested on social media that pharmacists should be remunerated based on service provision, rather than script volume.

Mr Rhodes confirms he is in the process of compiling a second, follow-up piece that will respond to comments he has received so far.

Read the full letter here

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