‘Overcharging’ claims give false impression

Guild condemns PBS price fixing suggestion as article accuses pharmacies of overcharging

The King Review interim report is a “damning” one which demonstrates that “chemists have been overcharging customers for medicines,” according to an article by News Corp Australia Network national health reporter Sue Dunlevy.

“The price of the same PBS medicine can vary by up to $26 depending on where a consumer shops, a damning government review of the pharmacy industry has found,” Ms Dunlevy wrote in News Corp media over the weekend.

“The Turnbull Government’s Review of Pharmacy Remuneration and Regulation wants to end the practice costing consumers $145 million a year by introducing a set price for PBS medicines.”

The interim report of the King Review “has blown the lid on a massive pricing discrepancies in subsidised prescription medicine,” Ms Dunlevy writes.

The article used the example of atorvastatin, with a government-set price of $14.25, which Ms Dunlevy writes is available for $6 at Chemist Warehouse.

“However, a suburban pharmacy that applies extra fees allowed on top of the $14.25 government fee could bump the price up to $19.82 or higher, the review says,” she writes.

“This means it would be possible for a chemist to charge up to $38.80 for the script which really costs half that amount, Professor King says.”

The interim report found that “the variation in pricing for medicines due to pharmacy pricing discretion creates consumer confusion”.

It recommends that: “the payment made by any particular consumer for a PBS-listed medicine should be the co-payment set by the government for that consumer or the dispensed price for that medicine, whichever is the lower.

“A community pharmacy should have no discretion to either raise or lower this price.”

As well as finding it “inappropriate” that community pharmacies have the discretion to raise the price paid by a consumer above the relevant dispensed price, the interim report found it was unnecessary to allow pharmacists to add optional additional charges to the price paid by consumers.

But a spokesperson for the Pharmacy Guild of Australia told the AJP that fixing the prices of PBS medicines under the general patient co-payment would force many consumers to pay more than they currently do.

This would also drive other consumers out of the PBS to private scripts with no safety net.

“This is a flawed option which would reduce competition under the co-payment ($38.80) and it is hard to see what the Pharmacy Review was thinking in putting this option forward,” the spokesperson said.

“Not for the first time, a News Limited newspaper story on the weekend falsely gave the impression that pharmacies that charge the legal allowable fees for under co-payment medicines are somehow doing the wrong thing. This was unfair and flies in the face of the market realities for these medicines.

“Consumers benefit considerably from competition in relation to under co-payment PBS medicines. 

“The Pharmacy Review interim report itself publishes a table of ten high volume medicines, six of which would become more expensive under their proposal. 

“It is very unlikely that the Government [would] be attracted by a proposition that reduces competition, forces many consumers to pay more, and drives many consumers out of the PBS safety net system.”

The News Corp article also says the interim paper “caves into the demands of the powerful Pharmacy Guild of Australia” regarding the proposed abolition of the controversial $1 script co-payment discount.

It claims this could increase the out-of-pocket costs for some chronically ill people on multiple medicines by “hundreds of dollars” per year.

A review of the optional discount had already been flagged in this year’s Federal Budget, and had been welcomed by the Guild.

The News Corp article is the latest in a series by Ms Dunlevy which have been critical of the community pharmacy sector.

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