Australians over-pay for medications

Advocacy groups reject the Pharmacy Guild of Australia’s campaign against pricing changes aimed at reducing the cost of medicines that it says will result in a loss of other free pharmacy services for older Australians

By Natasha Egan

Older Australians should reject calls by the peak organisation representing community pharmacy to rally against pricing changes aimed at bringing down the costs of medicines, according to consumer advocacy organisations. 

The government reduces the subsidy it pays pharmacies for drugs listed on the Pharmaceutical Benefits Scheme when they come off patent in line with the average lower costs manufacturers charge, leading to a savings for taxpayers and a drop in the price pharmacies charge customers.

Recent reforms have changed the review cycle for older drugs from 18 months to one year, which the Pharmacy Guild of Australia says breaches a five-year agreement it has with government. 

The guild is urging seniors to sign a petition against the measures because it claims older Australians will bear the brunt of the reduced subsidy through the loss of free pharmaceutical services such as home delivery, medication packaging and health advice. 

However, National Seniors Australia CEO Michael O’Neill said his organisation did not support the Pharmacy Guild’s call for seniors to get behind its petition.

“We would reject that,” Mr O’Neill said. “It’s an overreaction by them.”

Mr O’Neill said there needed to be a change in the way the health system delivered pharmaceuticals to consumers. And chemists, who play an important role, should not be against measures that delivered cheaper medications to the system and consumers, he said.

He reiterated National Seniors Australia’s calls last week as part of its election priorities for reforms to the approval, purchase, supply and delivery of medicines, especially generics, to relieve cost pressures on consumers and overall cost to the public purse. 

There is opportunity for substantial reform for the supply and delivery of medicines and manufacturers and pharmacies need to make then available in a more cost-effective manner for distribution, he said.

Similarly the Consumers Health Forum of Australia (CHF), CHOICE and the Australian Council of Social Service have joined together to highlight the inflated prices Australians pay for prescription medicines which it said was up to 10 times higher than the British price for the same product.

The Pharmacy Guild’s Campaign is misleading, the three organisations said in a joint statement.

The group of three said the government’s measures aimed to ensure prices paid by government dropped more rapidly when the prices paid by pharmacies fell.

CHF CEO Carol Bennett said Australia needed cheaper medicines, not over-compensated pharmacy owners.

A loop hole allowing pharmacy industry to claim an inflated subsidy was now being closed, she said.

“For the clear benefit of patients, pharmacists and the taxpayer, the pharmacy industry needs to move away from relying on inflated subsidies for prescription drugs and towards health service delivery,” Ms Bennett said.

Agreement breached

However, the Pharmacy Guild of Australia national president Kos Sclavos said the guild supported the current system and also wanted cheaper prices to consumers.

But the government’s change in policy breached an agreement in place on pharmacy remuneration until 2015, he said.

“Whether you support the current system or not, an agreement should be honoured by the government,” Mr Sclavos said.

“The Pharmacy Agreement continues until July 2015 and so if there is a change of government policy the government needs to ensure the change is cost neutral to the participants of the agreement.”

The reduced remuneration paid would put each community pharmacy $90,000 out of pocket on average in one year, he said.

“We’ve predicted these decisions may force pharmacists to cut free patient services such as aged care and home delivery services, bowel cancer screening, blood pressure testing and wound management support,” Mr Sclavos said. 

He said pharmacies needed to make business decisions to remain viable.

“For a key group of patients living in aged care there is likely to be new charges to prepare dosage packs and delivery services. 

“At present the commonwealth government does not pay for these services and they are being cross subsidised. This is just one flow on impact that was not considered by this rushed decision,” Mr Sclavos said.

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