Chemists have been overcharging customers for medicines a government review finds

A REPORT has blown the lid on massive pricing discrepancies in subsidised prescription medicine, with some customers paying up to 200 per cent more.

THE price of the same PBS medicine can vary by up to $26 depending on where a consumer shops, a damning government review of the pharmacy industry has found.

The Turnbull Government’s Review of Pharmacy Remuneration and Regulation wants to end the practice costing consumers $145 million a year by introducing a set price for PBS medicines.

The Pharmacy Guild of Australia claims that solution could see medicine prices could soar by over $8 per script and the Chemist Warehouse discounting model be brought to an end.

But the author of the review Professor Stephen King denies this and says discount chemists would still be able to offer discounts if they dispensed medicines as private prescriptions.

The interim report has blown the lid on a massive pricing discrepancies in subsidised prescription medicine.

It shows consumers can be paying up to 200 per cent more for a PBS medicine in one pharmacy compared to the price charged in another.

Medicine prices would soar. Picture Thinkstock

This is because when a medicine costs less than the $38.80 general medicine co-payment chemists can add a range of extra charges to bump up the price.

The pharmacy may choose to charge an additional Safety Net Recording Fee of $1.19 for ready prepared items or $1.55 for extemporaneously prepared items, and an Additional Allowable Fee of up to $4.38, so long as the total amount charged does not exceed the patient co-payment.

Using the example of top selling anti-cholesterol medicine atorvastatin it shows how the government prices the treatment at $14.25, a fee that includes a wholesale margin, a profit for the chemist and a dispensing fee.

Discount chemist Chemist Warehouse charges just $6 for this medicine.

However, a suburban pharmacy that applies extra fees allowed on top of the $14.25 government fee could bump the price up to $19.82 or higher, the review says.

This means it would be possible for a chemist to charge up to $38.80 for the script which really costs half that amount, Professor King says.

Analysis of the charging practices of pharmacists by the review found the price of products like Panadeine can vary by as much as $4.78 depending on which pharmacy you use.

The contraceptive pill costs up to $5.24 in some chemists compared to those that discount.

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The $1 medicine discount should end says review. Picture Getty Images.

The review also caves into the demands of the powerful Pharmacy Guild of Australia which has been fighting for the end of the government’s voluntary $1 discount on the PBS co-payment for medicines.

If the government adopts the recommendation it could push up the prescription costs of pensioners by up to $70 a year.

Chronically ill people with multiple prescriptions could end up paying hundreds of dollars more for medicine.

The voluntary $1 discount was introduced by the Turnbull Government in January 2016 but was mostly being offered by discount pharmacies.

Pensioners and concession patients pay $6.30 for medicines on the Pharmaceutical Benefits Scheme but this price falls to $5.30 if the discount is applied.

General patients pay $38.80 and this falls to $37.80 if the discount is applied.

News Corp has revealed chemists were only applying the voluntary discount to 28 per cent of prescriptions and the review says it was inequitable because chemists in the bush were least likely to pass it on.

A spokesman for Health Minister Greg Hunt said the Government had indicated it would consider a review of the optional $1 medicine discount.

“This is an interim report to Government which is now open for public comment and the Government will respond on all other matters when the final report is delivered,” the spokesman said.

“Our clear principle is to keep downward price pressures on medicine, as achieved in the Medicines Australia agreement, and this will govern our response,” he said.

The Consumers Health Forum says it is concerned about the pricing recommendations.

“We are concerned by the option to restrict pricing variations for prescribed medicines and for the abolition of the $1 discount provision, measures which would likely increase out of pocket costs for patients,” CHF spokesman Mark Metherell said.

Originally published as Chemists have been overcharging customers for medicines a government review finds