Pharmacy ownership, location rules ‘archaic and anti-competitive’

The Australian Medical Association says strict regulations on pharmacy locations and ownership are “archaic and anti-competitive”, calling for reform in the sector to increase access and lower the costs of medication.

The Australian Medical Association has also called for more “innovative models” for dispensing medicine to be considered including placing pharmacies in supermarkets, rolling out medication vending machines and allowing pharmacists to lift the $1 discount on PBS patient co-payment amounts. Picture: George Frey/Getty Images/AFP

The Australian Medical Association says strict regulations on pharmacy locations and ownership are “archaic and anti-competitive”, calling for reform in the sector to increase access and lower the costs of medication.

To increase geographic distribution and quality control, pharmacies are dictated by strict rules, which ban the establishment of new chemists within 1.5km of existing premises. The conditions prevent the relocation of pharmacies to a destination more than 1km away and state that the business must also be owned by a pharmacist.

The AMA has also called for more “innovative models” for dispensing medicine to be considered including placing pharmacies in supermarkets, rolling out medication vending machines and allowing pharmacists to lift the $1 discount on PBS patient co-payment amounts, in a submission to an inquiry into promoting economic dynamism, competition and business formation.

The Australian Medical Association is calling for reform to the nation’s “archaic and anti-competitive” pharmacy regulations which place limits on pharmacy ownership. Picture: iStock

AMA president Steve Robson said the proposed reforms would help place much needed downward pressure on medication costs for patients amid the cost-of-living crisis by creating more competition.

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

“The outdated pharmacy ownership rules are undeniably anti-competitive, drive up costs for consumers and governments, and are even more punitive for rural and remote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 and 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.”

Calls for reform come as the war between doctors and pharmacists ramps up across the country as chemists gain new powers to prescribe medication in Queensland, with the model to roll out in NSW and Victoria.

“The AMA strongly supports the many reports and inquiries which have called for Australia’s archaic and anti-competitive pharmacy regulations to be removed or reformed,” the submission said. “These reforms do not pose any risk to patient safety as they will not change the role of the prescribing doctor or the dispensing pharmacist. Rather, they will increase patient access to medicines and drive down costs through improved competition, potentially improving medication adherence.”

The AMA said reports investigating ways to make medication more affordable had consistently advised changes to the rules around pharmacy ownership over the course of two decades, though no action had been taken.

The Pharmacy Guild of Australia was contacted for comment.