A continuing theme from last year, the issue of low pay remained a hot topic for 2017, writes Sheshtyn Paola
Many of us who attended PSA16 will remember when PSA CEO Lance Emerson announced on opening day that pharmacy wages were “the single largest issue facing the profession in community pharmacy.”
As another year has come and gone, low pay remains a sore spot for pharmacists.
In addition, Dr Emerson’s statement was made before the Fair Work Commission’s decision in February to cut penalty rates for pharmacy staff as well as other retail industries, bringing wages even lower.
The decision meant that Sunday penalty rates under the Pharmacy Industry Award for full- and part-time employees will reduce gradually to 150%; a shift that is set to take place over a period of between two and five years.
Over the same period, Sunday penalty rates for casual employees will reduce gradually to 175%.
The first round of cuts – to Sunday rates from 200% to 195% – occurred on 1 July 2017.
Low pay risking the profession
Professional Pharmacists Australia has brought a Work Value Case before the Fair Work Commission, seeking a 30% rise to the Pharmacy Industry Award rates.
“Low levels of pay lock pharmacists a virtual poverty trap, while the cost of living continues to grow,” said PPA CEO Chris Walton.
The union released a new report in August entitled, “Community Pharmacists’ Employment and Remuneration Report”, which revealed that low pay starts immediately in a pharmacist’s career – at $40,000 for a graduate.
The average graduate pharmacist wage actually declined from $42,000 in 2015-16, representing a 4.8% decrease, according to the report.
“This decline comes after many years of stagnant growth, and represents a major divergence from graduate rates more broadly, which averaged $60,000 across all professions in 2016,” the report said.
“These findings fall reasonably in line with responses from our survey, with pharmacists reporting declining wages over the past year, and little to no growth over the past five years.”
Pharmacist annual income trails far below that of other health professionals (see breakout box).
The report found that the average wage for an intern is $23.02 an hour; for a pharmacist $32.49 an hour; an “experienced pharmacist” $36.66 an hour and a pharmacist-in-charge $35.95 an hour. A pharmacist manager can expect to earn $38.49 an hour on average.
And pharmacists in discount pharmacies reported a mean base hourly rate of only $31.03, which was 14.6% lower than banner group pharmacies.
“Pharmacists’ jobs have increased in responsibility and complexity in recent years, with many routinely providing vaccinations services and health checks in addition to dispensing medicines,” said the report.
“Yet low pay is dragging community pharmacy down and placing the future of the profession at risk.”
ECPs have their say
What do young pharmacists think about the issue?
At this year’s PSA conference, the PSA released its Early Career Pharmacist White Paper, which made 10 key recommendations for “ensuring a practical and sustainable long-term plan for ECPs to have satisfying and rewarding careers while contributing to Australia’s healthcare system”.
During the consultation process, it became apparent that many Australian ECPS are “dissatisfied with their careers, and are becoming disillusioned with the sector more broadly”.
Responding to a survey, early career pharmacists identified that lack of appropriate remuneration was a major issue in the profession.
The ECP response echoed both the 2015 and 2016 PSA member surveys which found inadequate remuneration was the biggest challenge facing the pharmacy profession.
Aligning with the PPA’s vision, the White Paper recommended that the profession negotiate a raise in the Pharmacy Industry Awards, with more than 80% of survey respondents hopeful that remuneration could be improved through re-negotiation of Pharmacy Industry Award rates.
“Remuneration is, unsurprisingly, a key factor for early career pharmacists in determining job satisfaction – with 70% of ECPs rating it as either very important or extremely important in determining their level of job satisfaction,” read the White Paper.
“ECPS were in overwhelming agreement that this is an important action for the profession to take,” said the White Paper.
“Remuneration should adequately reflect the level of care and time provided to patients by pharmacists as well as the responsibility required of the profession. It must also be noted however, that ECPs recognise that simply increasing the Pharmacy Industry Award rate is not a silver bullet, nor a holistic solution to the remuneration issues being faced by the profession as a whole.”
While the Pharmacy Guild – which represents pharmacy owners – made a submission to the Fair Work Commission calling for penalty rates to be cut, not all owners believe the cuts were the right decision.
“As a pharmacy owner … not only is it a kick in the teeth to our employed colleagues but it also gives corporate pharmacies another competitive advantage over independent pharmacy,” said one AJP reader.
Many have expressed the desire to pay their staff higher wages, but say they are unable to do so as they are struggling to make ends meet.
Moreover, some owners believe that low remuneration is an inevitable outcome of the current pharmacy model due to price disclosure.
Peter Feros and Paul Riley, proprietors of Cincotta Discount Pharmacy in Merrylands, NSW, argued in late August that under price disclosure, the reduction in remuneration for dispensing PBS prescriptions has decreased by 22%.
This led to a reduction in the average community pharmacy’s annual income by $100,000, they said.
Meanwhile, costs have been rising and many owners are unable to keep up.
“Every July, costs go up, rents go up, electricity goes up… Labour costs themselves are 62% of the cost of dispensing.
“How have we stayed afloat? With generics and wholesaler rebates,” said Mr Feros, a veteran of the industry who has an interest in several pharmacies.
“Remove these rebates and the community pharmacist income is below expenses growth and average wage growth.”
“The community pharmacist award rate of pay has traditionally been ridiculously low. So much so that, to retain pharmacists, community pharmacy has traditionally paid employed pharmacists above the award,” he said.
He cited PPA statistics that show that as price disclosure has cut into PBS remuneration, the rates paid to employee pharmacists have concomitantly dropped from $37 per hour in 2009 to less than $33 in 2015 – a 10.8% decrease.
And while the average adult income in Australia is about $80,000 per annum, for pharmacists it sits at about $66,000.
With sector competition and lowered income, pharmacies are trading out their more experienced pharmacists for cheaper ones, suggested Mr Feros.
“How pharmacists are keeping ahead of the game is by replacing higher-paid labour with lower-paid labour – or starting off with lower-paid labour like Chemist Warehouse does.”
Where to from here?
Mr Feros and Mr Riley agree with both the PPA and the PSA, that one solution is to increase the award wage.
“Let’s at least go up to the paid rate. We’ve discounted our own profession by not paying our staff enough money,” argues Mr Riley.
The low award rate is actually holding back current PBS calculations, he said.
“The government dispensing fee is calculated based on the award wage.
“If the award rate was raised at least to the current paid rate, it would have a positive impact on negotiations with the government regarding PBS funding,” Mr Riley suggested.
“Low wages in community pharmacy are a direct result of price disclosure hitting community pharmacy as negotiated between the Pharmacy Guild and the Federal Government,” PSA National President Shane Jackson also stated in August.
“We know that when gross profit per script is up, pharmacy owners pass those profits on to employees.
“We need a much stronger Seventh Community Pharmacy Agreement with all parties around the table—including PSA—to create better outcomes for consumers, adequate remuneration for the profession and ensure delivery of programs and services are focused on health outcomes.”
Dr Jackson says that the profession also needs to look outside of Government and Community Pharmacy Agreements to new roles and new remuneration.
“PSA has been working tirelessly to secure funds to expand pharmacist roles and remuneration, including through the Primary Health Networks, in areas such as minor ailments, General Practice pharmacy and by integrating pharmacists in Aboriginal Health Services,” he said.
“There is no quick fix to this. If we are to address this important issue, a longer term strategy is needed – and that’s why PSA is leading the 10 Year Action Plan for Pharmacist Practice in Australia to scale-up new roles and new remuneration, for the benefit of consumers.”
Average annual salary