Group says Guild’s concerns it is not complying with pharmacy ownership laws are based on erroneous information

Last year Ramsay Health Care, Australia’s largest private hospital group, announced it was planning to enter the community pharmacy space by opening hundreds of its own pharmacies.

And just over a week ago, it announced its intention to get the ball rolling after a successful test at 29 sites, including four 24-hour pharmacies located within major hospitals.

It’s not new to pharmacy services, having been responsible for dispensing within their hospitals for decades.

However the group has come under criticism after it announced its intention to enter community pharmacy, with owners expressing concern about their franchise model.

“It has now come to the Pharmacy Guild’s attention that Ramsay Health Care may be using its contract arrangements for the purchasing of medicines through its hospitals to supply medicines to community pharmacies in the Ramsay Pharmacy Group,” claimed the Guild in a statement released on Wednesday.

The concerns prompted Pharmacy Guild of Australia president George Tambassis to write a message to members, reassuring them that the Guild is taking measures “to ensure that the Ramsay Pharmacy Group’s operations comply with pharmacy ownership laws”.

“The Guild has had a large number of its community pharmacy owner members expressing concern about this matter as have other participants in the medicines supply chain. Accordingly, we have written to a wide range of suppliers seeking an absolute assurance that suppliers are not allowing Ramsay or any other hospital providers to use their hospital discounts and trading terms for medicines that are being supplied to patients through community pharmacies under their corporate banner.

“If this behaviour is indeed occurring, it would run contrary to the longstanding requirement by suppliers that there be separate purchasing arrangements for hospitals and community pharmacies, and that medicines that are supplied for use in hospitals are not able to be on-sold or provided for use in community pharmacy,” said the Guild in a statement.

“If, as the Guild is led to believe, Ramsay may be finding a way to get around this established separate supply arrangement or is being allowed to do so by suppliers, they are deriving an unfair competitive advantage for their pharmacies over other community pharmacies.”

Ramsay Health Care Group has defended itself, saying that the Guild is making the claims based on “erroneous” information.

“Ramsay Pharmacy is aware that the Guild has contacted pharmaceutical manufacturers and some of the industry associations,” a spokesperson told the AJP.

“The Guild is erroneous in noting that prices paid by hospitals for PBS medicines are not reported as part of SPD. In line with the PBS Price Disclosure Arrangements, the Guild should be aware that consistent with the Arrangements, it is only sales to public hospitals which are not subject to reporting obligations.

“Ramsay Health Care is an operator of private hospitals and therefore party to the rules of price disclosure. We are a strong proponent of a sustainable pharmaceutical industry and an advocate of Commonwealth initiatives which create a sustainable pharmacy sector.”

The Ramsay Health Care spokesperson said they have concerns about the Guild’s motives.

“Ramsay Pharmacy is concerned that the Guild is seemingly advocating contrary to the intentions which were legislated in the National Health (Pharmaceutical Benefits) Amendment (Simplified Price Disclosure) Act 2014,” they said.

“As the representative body which currently occupies the single seat at the negotiating table with the Commonwealth, we do not believe the Pharmacy Guild is appropriately representing all stakeholders, providers of pharmacy services and consumers of the Pharmaceutical Benefits.

“This raises great concerns around whether the best interests of patients and consumer groups are appropriately advocated and represented by the Guild.”

Meanwhile the Guild maintains it is following its line of enquiry in the best interests of its members.