Pharmacy is at a tipping point, having taken an undue burden of heavy lifting from budget cuts – resulting in many pharmacies facing bankruptcy and staff layoffs, Senator Nick Xenophon has told the Senate.
“What the pharmacy sector is facing is quite dire,” he told the Senate.
“They are now at a tipping point where many of them are facing bankruptcy and the difficult decision of laying off staff—in fact, many staff have been laid off.
“There are 60,000 employees in this sector and the fear is that thousands will be losing their jobs in the next 12 months as a result of decisions made by successive governments.”
The consequence of simplified price disclosure has had a disproportionate impact on community pharmacies, whereas larger pharmaceutical companies are better equipped to weather the storm, he says.
“On average, each pharmacy in the country has had its income cut by some $90,000. This will result in seeing more and more pharmacies fall by the wayside.
“We have a situation where, unless something is done very soon, we will see more pharmacies closing their doors, more staff being laid off, and more and more professional pharmacists—who undertake a five-year degree—losing their jobs as well.”
He raised the issue of potential severe impact on regional communities if their local pharmacy was to close down, as in some instances residents would then have to travel 10, 20, 30 or 50 kilometres or more down the road to get access to basic medicines.
“Although pharmacies are offering a service they still have to run a business…and they are at the mercy of regulatory change and those changes have been savage, because the community pharmacy sector has been a soft target for too long,” Senator Xenophon says.
“Big pharma seems to survive. The wholesalers can pass their cost-cutting on to the pharmacists, who are the ones that bear the brunt of this. There is no sense in robbing Peter to pay Paul and trying to minimise the cost to the PBS by putting community pharmacies under further strain.”
Trying to put costs into perspective, Senator Xenophon said annual household income rose by 118% from 1991 to 2012, and medical and hospital services rose by 191%, but the cost of pharmaceutical products rose by only 58%.
Why should pharmacy bear the brunt of PBS cost cutting? he asked.
“How can you expect small businesses around the country to survive if they have an average drop of income of $90,000 for each of the 5,500 community pharmacies around the country? That is half a billion dollars a year. It is not sustainable.
“My fear is that this will lead to a push by the supermarket duopoly, Coles and Woolworths—because they have been sitting on the sidelines jealously eying off the pharmacy market.
“We all know that, if pharmacies were ever deregulated, the supermarkets would poison the fruit, commodifying a service that Australians have come to trust with their lives.
“Medicine is not like petrol or sausages or cans of Coke, and the one thing that I believe the supermarkets will never offer is expertise.
“Pharmacists do not simply sell medicines; they help regulate their use and they help educate the users.
“Delivering medicines to homes, advising on dosages and providing dose administration aids are part of the expertise they are increasingly providing,” says Senator Xenophon.
He warns that if the Sixth Community Pharmacy Agreement does not provide a fair and equitable deal for Australia’s community pharmacies, “this nation will see a tearing-down, disintegration, of a key part of community infrastructure in this nation, and all of us will be the poorer for it”.