The chemist monopoly that means you pay more for medicines

A chemist monopoly is forcing many Australians to drive hundreds of kilometres to save thousands on the cost of life-saving medications.

Exclusive: Patients in the bush are paying three times more than people in the city for life-saving medicines because of monopolistic rules backed by the Pharmacy Guild of Australia.

It means some families are forced to drive 100 kilometres to get their scripts filled at a discount chemist to save more than $1,000 a year on prescription medicines.

Government rules introduced in the 1990s prevent anyone except a pharmacist from owning a chemist shop and they prevent a new chemist from opening within 1.5 kilometres of an existing pharmacy.

Former competition tsar Graeme Samuel has told News Corp the rules are bolstering the interests of powerful pharmacy owners at the expense of consumers who have to pay hundreds of dollars a year more for medicines.

“The public’s needs are best served by low prices for scripts and convenient hours but the incumbents (chemists) say we don’t want that to happen,” he said.

Graeme Samuel, the former Australian Competition and Consumer Commission boss, says consumers are being treated unfairly. Picture Aaron Francis

The location rules have been progressively tightened at the behest of the powerful Pharmacy Guild of Australia to stymie the expansion of discount chemists like Chemist Warehouse.

When discount chemists found a way around the rules by setting up shops in light industrial areas the regulations were tightened to require any new chemist to open next to a supermarket.

The catch 22 was that in most areas there was already an existing chemist within 1.5 kilometres of the supermarket.

In a sign of the continuing power of the Pharmacy Guild, both major parties sign a letter before every election, including the 2019 election, agreeing they will not deregulate the industry to benefit consumers.

The rules protect existing chemists in country towns from competition and mean country people are paying $20 for commonly used medications like cholesterol lowering atorvastatin which is sold for as little as $6 per script by discount chemist chains.

Residents in these towns are also missing out on the $1 discount on the patient charge for subsidised medicines which is opposed by chemist owners represented by the Pharmacy Guild of Australia.

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Country residents are paying more for medications and missing out on discounts. Picture: iStock

A spokesman for the Pharmacy Guild said the organisation was “absolutely unapologetic” about the restrictive location rules even if they had the unfortunate effect of inflicting cost pressure on country residents.

“The rules were introduced in the 1990s to ensure the viability of the pharmacy network, if there were no rules there would be more pharmacies in affluent areas (than rural areas),” he said.

The Guild has asked the government to pay for cutting the price of all prescriptions by $1 so pharmacists don’t have to bear the cost and all Australians can access the cheaper scripts.

A survey of 325 Victorian country residents conducted by Thrive research on behalf of Chemist Warehouse found two in three people had driven to another town to fill their prescriptions to save money.

Of these, over 85 per cent drove over 50kms and price was the key factor for the trip.

Eight in ten of those surveyed were not aware pharmacies could pass on a $1 discount to customers.

Six in ten had delayed buying medication for financial reasons.

More than seven in ten of those surveyed would like a discount pharmacy to open in their town and agreed there should be a change in the law to allow for more pharmacy competition in small towns.

A grandmother from Cowra, in New South Wales, told News Corp there used to be four chemists in town but now there were only two but they both charged high prices.

She travels to Sydney to buy her medicines at Priceline which charges half as much as the chemists in her home town.

High prices are forcing people to drive long distances to get their prescriptions.

Robyn Lindsay, from Hamilton in southwestern Victoria, says she drives 100 kilometres to Warrnambool so she can get her multiple prescriptions at half price.

Mrs Lindsay, aged 54, has a back injury and suffers from nerve pain and uses three medicines but says she can’t afford two more prescribed for her -hormone replacement therapy or anti-inflammatories — because they are too expensive.

Her husband David also needs three prescriptions per month and the couple saved $130 recently by shopping remotely.

She says she was not even aware that her local chemist could offer her a $1 discount on medicine prices.

“I would like to see the rules changed rather than me having to go to Warnumbool,” she said.

“I think everyone is finding it tough,” she said.