Therapeutic vape scheme suffering due to high price of legal tobacco

Some legal vape manufacturers may bow out of the market as a government scheme allowing adults to buy therapeutic vapes over the counter struggles to get off the ground. Find out why.

There have been fewer than 8000 therapeutic vape sales through pharmacies every month this year despite Therapeutic Goods Administration (TGA) estimates that 450,000 people would move from illegal to legal channels under a scheme introduced by the federal government last year.

Australia’s war on illicit vapes is failing, with new figures revealing the push to steer smokers and vapers into the legal market is barely making a dent.

Freedom of Information documents obtained by The Daily Telegraph show there have been fewer than 8000 therapeutic vape sales through pharmacies every month this year despite Therapeutic Goods Administration (TGA) estimates that 450,000 people would move from illegal to legal channels under a scheme introduced by the federal government last year.

Under the scheme, adults can buy vapes from a pharmacist without a prescription.

The TGA records “Schedule 3” pharmacy notifications, which count patients over 18 who can buy therapeutic vapes directly from a pharmacist without a prescription. These figures do not include GP prescriptions.

In May, there were 7952 notifications across 735 pharmacies. In June the figure dropped to 7252 at 703 pharmacies, before rising slightly in July to 7350 at 724 pharmacies.

The Royal Australian College of General Practitioners estimates 1.7 million Australian adults now vape.

That equates to an average of about 7500 therapeutic vapes dispensed each month across just over 700 pharmacies, in a country with 6000 registered outlets. On average, that is roughly one therapeutic vape sold every three days per pharmacy that’s opted in to the scheme.

Industry sources have told The Daily Telegraph several vape manufacturers that have been operating within the model since its introduction are considering leaving the market altogether.

The Royal Australian College of General Practitioners estimates 1.7 million Australian adults now vape.

Rohan Pike, a former senior Australian Federal Police investigator who established the Australian Border Force’s tobacco strike team, said “the government’s policy is failing”.

“The legal product, with all its regulations, is losing the battle against the illicit product,” Mr Pike said.

He said 95 per cent of vapers wanted to choose their own flavours and concentrations “without the inconvenience of having to find one of the few pharmacies that sells them”.

“Countries with the lowest smoking rates, like New Zealand, actually encourage responsible vaping by having a properly regulated market,” he said.

While the legal market stagnates, illegal tobacconists are booming across suburbs, openly selling black market cigarettes and flavoured nicotine vapes. Border seizures are at record levels, but enforcement on the ground remains thin.

Soaring cigarette prices are fuelling demand for the black market.

In its latest budget, the government committed $156.7m over two years from 2025–26 to crack down on illicit tobacco and nicotine.

But revenue from tobacco excise continues to slide. The federal government is forecast to collect $7.4bn this year - less than half the $16.3bn raised in 2019–20.

Soaring prices are fuelling demand for the black market. In 2020, the average pack of 20 cigarettes cost $28.20. From Monday, a new round of indexation and tax hikes has pushed the cost to $43.59. By contrast, an illicit packet has recently fallen to a record low of just $7.50.

“The driver for the illicit cigarette market is the price,” Mr Pike said. “Legal tobacco is now about five times the illicit price and, with another 7 per cent increase on September 1, it only adds fuel to the fire.”

Originally published as Therapeutic vape scheme suffering due to high price of legal tobacco