The Abbott Government has struck a $19-billion deal for pharmacies to dispense taxpayer-subsidised medicines for the next five years.
Government sources have confirmed a letter of intent has been signed with the Pharmacy Guild of Australia that sets out the major elements of the sixth Community Pharmacy Agreement.
The agreement pays about 5,000 pharmacies for dispensing the price-regulated Pharmaceutical Benefits Scheme (PBS) medicines and services.
It was understood the guild had been pushing for a figure closer to $21 billion.
The previous agreement was worth $15 billion and was due to expire at the end of June.
It was believed negotiations between the Government and the pharmacy guild over the sixth agreement were tense.
The Government rejected reports the deal would allow community pharmacies to access funds through Medicare.
The Community Pharmacy Agreement is a deal struck between the Pharmacy Guild of Australia and the Federal Government.
It governs how pharmacies supply medicines listed on the PBS.
Under the arrangement, pharmacies buy medication from wholesalers, sell them to people who bring in prescriptions and are reimbursed by the Government for drugs listed on the PBS.
The first Community Pharmacy Agreement was reached in 1990.
Since then, the Government has entered five-year agreements so pharmacy remuneration is not subject to year-by-year budgetary changes.
The sixth Community Pharmacy Agreement is scheduled to commence on July 1, 2015.