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The government’s reforms to raise dispensing limits on prescription drugs are aimed at making them more accessible and affordable – changes the Pharmacy Guild strongly opposes as a threat to their revenues. By Bianca Nogrady.

Pharmacy Guild’s bid to block prescriptions reform

Members of the Pharmacy Guild of Australia outside Parliament House, Canberra.
Members of the Pharmacy Guild of Australia outside Parliament House, Canberra.
Credit: AAP Image / Mick Tsikas

Every 30 days, Australians with chronic illnesses such as high blood pressure, high cholesterol or heart disease have to visit a pharmacist to get their next month’s allowance of medication.

People with these conditions are likely to be on multiple medications, all of which have the same 30-day dispensing limit, but whose 30 days may start at different times throughout the month, meaning they may need to visit a pharmacist multiple times a month.

If that person lives in a metropolitan area, it might be a quick trip around the corner. If they live in a rural or remote area or if they’re elderly or housebound, however, it’s a more challenging excursion that must nonetheless be undertaken if they are to take their medicines on time without interruption.

From September 1, many Australians will be able to get two months’ worth of medication dispensed in a single pharmacy visit. Federal Health Minister Mark Butler announced in April the government would implement a recommendation, made in 2018, that a raft of commonly used medications for chronic diseases be eligible for 60-day prescriptions instead of 30-day. The government took it a step further, saying the number of tablets might double but the price wouldn’t, effectively halving the cost of those medications for consumers.

The original recommendation, made by the Pharmaceutical Benefits Advisory Committee, an independent expert group that advises the government about what medications should be subsidised on the Pharmaceutical Benefits Scheme, was for 143 medicines to be eligible for 60-day dispensing. The federal government is extending that to 325 medicines, which will come under the new rules in three tranches of about 100 medicines each, starting on September 1.

The move has been welcomed by organisations representing doctors, such as the Australian Medical Association and the Royal Australian College of General Practitioners, and by patient advocacy groups including the Consumers Health Forum of Australia. They say the move will not only save patients money but will mean patients won’t need to visit a GP as often because their prescriptions can last 12 months instead of six.

“It is about making medications cheaper and more accessible, and freeing up GP appointments,” says Dr Nicole Higgins, president of the RACGP and a GP in Mackay, Queensland, adding that the move will bring Australia into line with other countries including New Zealand, Britain and Canada. “Some of those countries have three or six months’ dispensing – we’ve got 60 days.”

The changes could also increase people’s adherence to treatment, because they’re less likely to experience an interruption from running out of medication, says AMA vice-president and Sydney GP Dr Danielle McMullen. “Having to just run out of medicines every month and be organised enough to go to the pharmacy and pick up more, we see in clinical practice as being a time when people tend to drop off their medicines,” McMullen says.

For pharmacists and pharmacy owners, however, the shift to 60-day dispensing could have potentially serious financial impacts for an industry that relies substantially on the fees paid to it by government for dispensing PBS medicines.

The Pharmacy Guild of Australia, an organisation that represents the owners of community pharmacies, has campaigned hard in the public eye and behind the scenes against the policy. It commissioned an independent report, by economist Henry Ergas, that estimated the policy would lead to a $3.4 billion to $5.2 billion reduction in community pharmacy revenue over four years. Butler himself acknowledged the drop in dispensing fees paid to pharmacists could amount to $1.6 billion over the same period.

The report claims the larger drop in revenue will represent such a hit to the pharmacy sector that it’s likely to lead to the closure of between 200 and 600 community pharmacies, and place a further 900 under financial stress.

A spokesperson for the Health minister dismissed the Pharmacy Guild’s claims as a “scare campaign”.

Dispensing fees, which the government pays to pharmacists for the administration and handling of prescriptions, represented about 57 per cent of community pharmacy revenue in 2022, according to data from the Pharmacy Guild. The rest of revenue comes from other pharmacy services, non-PBS medications and other items sold in pharmacies.

However, the pharmacy sector has enjoyed a revenue boost in recent years, partly aided by an increase in services, such as immunisations. Guild president Trent Twomey has been quoted as saying “our sector started 2023 in a well-capitalised position”.

The 60-day dispensing policy will only apply to certain classes of medications – and excludes drugs such as opioids and antibiotics. However, the Pharmacy Guild says the first tranche of 92 medications to come under the policy represents a third of the total volume of PBS-subsidised drugs prescribed in Australia.

One of the variables at play in modelling of the financial impact of the 60-day dispensing policy is how much it will actually be used by GPs. The Ergas report assumes a higher take-up rate than what is modelled by the government, which would account for the much higher predicted impact on pharmacies’ bottom line described in the report.

Butler has assured the pharmacy sector any government savings from the 60-day dispensing policy would be reinvested into community pharmacies to help pharmacists “get out from behind the counter to deliver the sorts of high-quality services I know they want to deliver”.

He recently announced an increase of 7 per cent to the amount paid to pharmacies for dispensing PBS-listed medications from July 1 this year, double the indexation increase to the Medicare rebate paid to GPs and other healthcare professionals for their services. The budget for the Regional Pharmacy Maintenance Allowance, which provides financial support to pharmacy owners in regional, rural and remote areas, also doubled from July 1.

However, the guild says the increase in the dispensing rate is already locked in as part of the standard agreement negotiated between the pharmacy sector and the government every five years, called the Community Pharmacy Agreement. “It simply catches up with inflation after years of indexation funding cuts and does nothing to stop the concerns of community pharmacies,” a spokesperson for the Pharmacy Guild said in a statement.

The Pharmacy Guild, which represents pharmacy owners, isn’t the only organisation looking out for the interests of the community pharmacy sector, but it’s certainly the loudest. The Pharmaceutical Society of Australia, the peak body for Australia’s 36,000 pharmacists, has repeated the findings of the Pharmacy Guild’s report and said Australia could not afford these cuts to pharmacies. The organisation would not respond on the record to questions about the impact on pharmacists.

Professional Pharmacists Australia, the union and professional association for community and hospital pharmacists and pharmacy technicians, has also expressed concerns about the potential impact of the policy on employment and workplace conditions for pharmacists.

“While we understand these proposed changes may improve patient equity of access to medicines and increase convenience,” the organisation’s president, Leon Yap, said in a press release, “further information is required about any evaluation of the potential for medication misadventure and any effects on the viability of community pharmacies as a result”.

Another concern raised by the pharmacy sector is if patients can get twice as much medication at one time, it will reduce the number of times they see their doctor.

The AMA’s McMullen pointed out the decision about whether to give a patient a 60-day prescription, and therefore 12 months’ worth of medication, would still be at their doctor’s discretion. “If a patient’s condition isn’t stable or you’ve got other concerns or they’ve got multiple health issues, they may well still want to see their patients every six months,” McMullen said. “But there are other patients … where you know the patient well and actually an annual review and an annual check-up is acceptable and fits within medical guidance.”

Higgins says there are also separate systems in place, such as a GP management plan, to ensure regular check-ups for patients with chronic health conditions, which have nothing to do with appointments simply to renew a prescription.

As a regional GP, she sees the new policy as having significant benefits for patients, particularly those in rural areas. “People aren’t going to have to come into town quite so frequently,” she says. “Our Aboriginal and Torres Strait Islander community has been asking for this for a long time to enable people the flexibility to look after their conditions.”

This article was first published in the print edition of The Saturday Paper on July 8, 2023 as "Script changes".

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