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2TM Regional News

Pharmaceutical uncertainty

The future is looking uncertain around pharmaceuticals with the latest changes to the Pharmaceutical Benefits Scheme (PBS) included in the 2023-2024 Federal Budget.


The change is a win for people living with a chronic illness, allowing them to buy two months’ worth of supply with a single script, saving them a co-payment each time.


But the Pharmacy Guild of Australia is concerned the changes will be detrimental to smaller pharmacies and to medication supply.


“I am very concerned about the viability of community pharmacy, the viability of the supply chain, and the ability of pharmacists to continue with the services they do in all communities across Australia,” said David Heffernan, President of the NSW Branch Pharmacy Guild of Australia.


However, Federal Labor Senator Tim Ayres, told 2TM from July this year there will be a minimum stockholding requirement of six months for certain medicines.


“At the moment there is a requirement that if an individual chemist is short of a particular medicine – which does happen from time to time – there is a requirement for it to be delivered through the distribution networks within 24 hours,” said Mr Ayres.


“With these new changes, from July one there will be minimum stock holding rules coming into effect, requiring drug keepers to maintain a six-month supply of certain medicines.


“The medicines being targeted here are the ones used for chronic health conditions [like asthma and diabetes], so there is no likelihood of shortages.”


Up to 320 medications prescribed for chronic health conditions will be available for 60-day supply on one script, saving Australians a co-payment each time.


Mr Ayres believes the Guild’s concern of medication supplies are just a tactic in their ‘scare campaign’.


But pharmacy owners have taken to social media expressing other fears.


They fear they will have to lay off staff or even close their doors due to the money they will lose from the changes, something Labor has also promised will not be the case.


For 33 years, the community pharmacy agreements with the federal government have been based on a 30-day model, and in 2015 the payment model saw a change from 10 per cent retail markups to a set dispense fee with a patient co-payment.


This meant, how much pharmacies were paid was determined by a five-year projection of volumes.


Simply meaning, if the volumes (supply needs) go up, the dispense fee goes down, and if the volumes (supply needs) go down, the dispense fee goes up.


The model is a win win for pharmacies and the government, with the Pharmacy Guild of Australia signing an agreement in both 2015 and 2020.


But with the Federal Budget announcement last week, the 2020 agreement has been changed halfway through, leaving pharmacy owners in what they believe is a tough place.


“Pharmacy owners have to take out bank loans, they have to hold inventory, they have to have operating capital, and now they have been left with a few weeks’ notice of an agreement change that leaves them to foot the costs out of their own pocket,” Mr Heffernan said.


“The government is conscripting the pharmacy industry into giving a cost of living measure out of their own pockets.”


The changes are expected to generate a cost saving of $1.2B that Labor said will be invested straight back into community pharmacies, suggesting there will be pharmacy peak body consultation in the future.


The Pharmaceutical Society of Australia has said they will be seeking to work with government to learn more about how the cost savings from the measure will be redirected to the pharmacy sector.


But, when asked if the Guild will be working with government as well, Mr Heffernan was unable to give a straight answer.


As for the New England, local pharmacies have told Barnaby Joyce, Member for New England, they’re very upset with the decision, especially young owners who are now left with a business loan to pay off while the business plan of how to operate the pharmacy is completely changed.


The Pharmacy Guild of Australia believes it is now a matter of waiting to see what the true consequences of the PBS changes will be.

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