We’ve saved patients over $61m: CWH

hand out for money - coins in palm

The Pharmacy Guild argues that the $1 discount measure just delays concession cardholders’ access to the safety net, but Chemist Warehouse calls this position “nonsense”

The Guild has slammed the discount giant’s latest ad, which promotes its policy of passing on the $1 discount.

In the ad, Chemist Warehouse says: “Since enabling legislation was passed in 2015, one pharmacy group has voluntarily passed on the full $1 prescription discount to all eligible patients on all concessional scripts. In the last four years, that’s added up to over $61 million, making healthcare more affordable for all Australians.”

A Guild spokesperson has criticised the ad’s line that Chemist Warehouse has discounted every concessional script since enabling legislation was passed in June 2015.

“The legislation stipulated the discount could be applied only from 1 January 2016. So that’s a six-month fib,” the spokesperson says.

“Concession cardholders who reach the safety net in a calendar year derive no financial benefit whatsoever from the discount – it just delays their access to the safety net. But I guess there just wasn’t time to point that out in the ad.” 

Director of Chemist Warehouse Retail, Mario Tascone, says the ad is technically correct as it refers to the legislation date, and refers to the Guild position as “nonsense”.

“Yes, the Guild is correct that concession cardholders who reach the safety net in a calendar year derive no financial benefit whatsoever from the discount – it just delays their access to the safety net. But these patients are in the minority,” he told AJP.

“There are millions of concession cardholders who don’t get anywhere near the safety net every year who benefit with the $1 discount we pass on.

“Plus these concession card holders who they are referring to that qualify for safety net, enjoying the $1 discount before they reach their limit, are not financially worse off. Yes, they take longer—time wise—to reach their limit, but they get to keep their $1 per script in their pocket a lot longer as well. It’s simple maths!

“Furthermore, there are thousands of people who just miss out on their safety net each year also. If they don’t enjoy the $1 discount along the way they miss out on the huge savings over the course of the year.  Affordable healthcare for all Australians is what we stand for—that’s why every Chemist Warehouse store in Australia passes on this discount.”

Chemist Warehouse’s latest print ad says the banner has been discounting for over 4 years now, and in that time those discounts have added up to over 61 million dollars so far. Source: Supplied.

The Guild responded that patients being “not financially worse off” is “not much of a selling point, which is probably why their ad is silent on that issue”, referring to the measure as a “phoney discount”.

The pharmacy owner group has repeatedly stated its opposition to the optional discount and proposed it be replaced with a $1 reduction in price across all scripts.

While the $1 discount has not been specifically written into the 7CPA, which began from 1 July, the measure still continues with the approval of Health Minister Greg Hunt.

“Consumers will continue to have access to cheaper medicines through the continuation of the optional $1 discount on PBS co-payments,” he confirmed on announcing the new Agreement.

However Guild national president George Tambassis said last month: “The data shows also that the most chronically ill patients don’t take it up anyway, especially now with the safety net being reduced, people are happy to pay the extra dollar to get up to the safety net really quick, end of story. Why delay the safety net?”

“If the co-payments are not at the right level, don’t give the discretion to the pharmacists to decrease the co-payment, decrease that co-payment to everybody. We’ve offered that solution to the government many, many times,” he said.

The 2020 PBS Safety Net threshold is currently $316.80 for concession card holders, and $1,486.80 for general patients.

In 2018-19, there were 148.2 million concessional non-safety net scripts versus 37.5 million subsidised safety net scripts.

Therefore safety net scripts comprised about 20% of total concessional scripts in that year, costing the government about $1.2 billion with zero costs for concessional patients once they reached the safety net.

In a small poll recently run by AJP, 84% of 86 respondents said they were not happy about the continuation of the optional $1 discount, while the remaining 16% were happy with it.

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  1. Pharmacist Manager

    At the end of the day $61M is $61M profit not taken!
    No matter how you try and manipulate it Mr Guild President it’s $61M you along with many members probably wouldn’t give up for your patients?! Furthermore we are suppose to believe you when you suggest that the co-payment should be reduced by $1 for everyone instead of being optional?
    You expect us to believe you tried to and suggested to the government that every script be worth $1 less and somehow the government didn’t agree? How manipulative are you?!
    Following the idea that everyone should charge the same, the $1 discount can be seen in contrast as a $1 extra charge which the pharmacies are not willing to give up.
    Well done Chemist Warehouse for being there for the community!
    Continue to blame them for making healthcare affordable for the community because it’s true!

    • Paul Sapardanis

      Sorry you are wrong. Its $61 M spent on marketing. Get them in store by offering $1 discount and get them to buy other higher margin goods they don’t need. Ever wonder why the wait time is always long at a CWH? This just a play by them to get what they want in the end

  2. disillusioned

    ‘saves’ patients over $61m but costs them multiples of that through up-selling snake oil a la would you like fries with that.

  3. Pete

    Passing the $1 discount on implies pharmacies were given funds directly to do so – this isn’t the case. Please report this correctly,

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