AMA urges pharmacy reform to deliver lower medicine prices

The AMA has called for the scrapping of anti-competitive pharmacy location rules that have driven-up costs for consumers.

AMA President Professor Steve Robson said more than a dozen reports and inquiries over two decades had recommended reform of anti-competitive pharmacy ownership and location rules, which have restricted patients’ access to cheaper medicines and better services.

“The case has clearly been made for pharmacy ownership and location rules to be removed, yet they remain in place,” he said.

“The AMA has consistently called for reform of community pharmacy to ensure patients benefit from lower prices and better services.

“The outdated pharmacy rules are undeniably anti-competitive, drive-up costs for consumers and governments and are even more punitive for rural and remote Australians because they have less competition with restrictive location rules.

“These changes would encourage competition to go hand-in-hand with our call to increase the extent pharmacies can discount the PBS patient co-payment, currently restricted to $1. This amount has not been indexed since the measure was introduced in 2016.

“If the government is serious about access to cheaper medicines it’s time they listened to the economic sense of the experts for the sake of all patients, especially those struggling with affordability.”

The AMA lodged a submission to the Inquiry into promoting economic dynamism, competition and business formation, noting that the Productivity Commission, in particular, has consistently called for an end to the anticompetitive rules dating back to 1999. A key example is from the 2015 “Efficiency in Health” research paper:

 “Restrictions on retail pharmacy location and ownership are clearly more about protecting the vested interests of incumbent pharmacists than about promoting consumers’ interests and maximising benefits for society as a whole. These rules limit competition in the sector and can make it harder for some consumers to access pharmacy services. There is much to gain from removing these regulations while targeting safety and access objectives more directly.”1

The Australian newspaper reported that the AMA believed the strict regulations on pharmacy locations and ownership were “archaic and anti-competitive”, calling for reform in the sector to increase access and lower the costs of medications.