Federal health minister rejects government-commissioned review’s recommendations that restrictions change
The federal health minister, Peter Dutton, said pharmacy ownership and location laws should stay the same, despite a government-commissioned competition review which calls for the scrapping of special protections that allow only pharmacists to own stores.
The Competition Policy Review’s draft recommendations for pharmacies states that current restrictions on their ownership and location were not necessary to ensure quality advice and care to patients.
“Such restrictions limit the ability of consumers to choose where to obtain pharmacy products and services, and the ability of providers to meet consumers’ preferences,” the landmark review says.
“The panel considers that the pharmacy ownership and location rules should be removed in the long-term interests of consumers.”
The changes would allow large retailers such as Coles and Woolworths to sell medicines, as well as facilities such as aged care homes, increasing access to drugs access and opening the industry to competition.
Professor Ian Harper, economist and chairman of the review, said the panel had concluded the regulations were anti-competitive and contrary to the interests of consumers.
“We don’t believe they serve any health or public safety service,” he said.
The independent senator Nick Xenophon disagreed with Harper’s view and said the community pharmacy sector would be ‘decimated’.
But earlier in September, Dutton told the ABC program Lateline: “Nobody’s convinced us of the need for Coles and Woolies to run pharmacy, and we’ve said very specifically at the last election and since then that we want to make sure that pharmacy – the pharmacy location rules and the pharmacy ownership rules don’t change.”
On Tuesday morning a spokesman for the minister told Guardian Australia that Dutton’s view had not changed despite the review recommendations. He said: “The minister has made clear his position on location and ownership rules.”
David Quilty, chief executive of the Pharmacy Guild of Australia, agreed the current model of pharmacy was serving consumers well.
“Australia’s 5,450 community pharmacies, currently struggling under the pressures of price disclosure, need certainty and stability – not a constant push to abolish a system that’s working and replace it with an economic theory,” he said.
But Professor Philip Clarke, a leading health economist at the University of Melbourne’s school of population and global health, said sales data suggested pharmacy owners were hardly struggling, with some businesses worth millions.
“Location rules that currently state that you can’t set up a pharmacy within a certain distance, ranging between 1.5 and 10km, from an existing pharmacy effectively creates a local monopoly and stops new pharmacies entering into the Australian market,” he said.
“In many areas of Australia there is only one pharmacy, including in some large suburbs or towns, and if consumers want to seek a cheaper price or additional advice they can’t do so without having to travel some distance.”
He supported the review’s recommendations and said increased competition would drive drug prices down. Australians pay more for medicines than consumers in the US, Britain and New Zealand.
This would be increasingly important as blockbuster drugs continued to come off patent in Australia, he said.
Rollo Manning, a pharmacist working in Darwin with a focus on remote and Indigenous communities, said despite the guild being the peak body representing pharmacists, it did not reflect his views.
He said current location and ownership rules were hurting Indigenous Australians and those in remote locations.
“If we take the location situation and apply it to where I’m living in Darwin, we have 50,000 Aboriginal people in remote communities without access to any pharmacy at all,” Manning said.
“Eliminating location rules would allow pharmacies to be located where people are, such as in aged care facilities and in supermarkets.
“The Pharmacy Guild has done nothing about establishing pharmacies in remote locations because they are protecting pharmacies in major centres like Alice Springs and Darwin.”
His views had put him at odds with most pharmacists, he said: “But I think the draft review is excellent and should be carried out.”
Adam Stankevicius, chief executive of the Consumers Health Forum, described current pharmacy ownership and location rules as “arcane”.
“I would respectively ask the health minister to reconsider his view,” he said.
“We need to be applying a public interest rather than a pharmacy interest to these laws.”
Submissions in response to the draft review can be made until 17 November.