The Pharmacy Monopoly Racket

Health & Body
141

I don’t get it. Increasing the number of repeats (as mentioned in the opening paragraph) makes the ratio

visits-to-pharmacy/visits-to-doctor

go up, and would in general be seen as a good thing by customers and pharmacies alike (and of course as a bad thing by doctors).

For the quantity in one supply, the pharmacy perspective is likely to be negative i.e. the opposite. As always, the devil is in the details

For selected patients, it could be a good thing to have each supply be for a larger quantity. For other patients, it could be a bad thing e.g. results in medicine being thrown out (waste of taxpayer funds, waste of resources), or given away to a friend, or sold dubiously, or, tying in with the topic on paracetamol, used for an overdose.

So it’s going to come down to what “selected drugs” and “selected patients” means in practice. In general, it could be seen as a good thing for customers i.e. less hassle - fewer visits to both doctor and pharmacy.

This already exists within the regulations covering prescriptions i.e. a doctor can write a prescription with multiple repeats but get the pharmacist to dispense the whole lot in one go - which has the effect of increasing the number of days supply that a customer could hold. (I forget the section number that applies to this.)

As for supply issues, not a total fiction e.g. for how weird distortions can cause actual shortages: Ozempic helps people lose weight. But who should be able to use it? - ABC News

It isn’t necessarily about “supply line problems”. They also have to consider the cost of inventory, default reorder size, and shelf life. To me that suggests that “selected drugs” should be chosen carefully - to cover a very small number of reasonably popular drugs that have an appropriate shelf life - with the goal of flushing out problems before deploying more widely.

142

Maybe for the time servers who don’t care if they spend their day on unnecessary scripts instead of treating sick people. In my area demand of medical services far exceeds supply so I doubt skipping a few short consults (or doing it for nothing but a small fee to the practice) would have a great impact on their income. The AMA is supporting it.

The linked table specifies.

We are talking about some temporary surges when the first rounds of scripts go double quantity, not a net increase in demand as in that example, after six months these ought to even out. Not impossible to predict the demand for any given month with reasonably accurately.

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143

Sure but if that means that a life-critical drug is simply unavailable, temporarily, the patients who died are not temporarily dead. :wink:

It is unclear how the updated script would be endorsed by the dispensing pharmacist if unable to fulfill the script in full i.e. partly filled.

(filling in the gap)

Regulation 49.

Already exists. The doctor gets to decide whether to activate Regulation 49 on the script. So part of this hypothetical change already exists.

144

One question that I wonder about is … is this an intentional substantial increase in the public subsidy? Effectively the customer is making a much lower co-payment.

I’m not saying that that is a bad thing, particularly in cases of financial hardship, but equally you have to ask how widely this will be (ab)used and whether the public funds could be better spent elsewhere?

If the only concern were the hassle of attending the pharmacy then that issue could be addressed independently of the financial aspect of it, albeit that that would cause cash flow problems for those who are relatively povvo.

145

Pharmacists already have the capacity to ration drugs in short supply, it was done during COVID lockdown. Of course there is also the option to not include such drugs in the list until supply problems have been rectified.

146

If fewer scripts need to be processed to deliver the same drugs how is it that the subsidy on script filling is increased?

147

Would the PBS early supply regulation also need amendment, or the supply tables updating?

‘Pharmaceutical Benefits Scheme (PBS) | PBS Safety Net early supply rule - Consumer Frequently Asked Questions

P.S.
If my recollections are correct the dispensing costs (IE excludes the product cost) of a prescription are as @grahroll previously linked mostly made up of fixed fees. IE independent of whether 7/14/30 days supply. The greater change may be with the suppliers who may need to use the next size up box to hold double the number of cards to increase supply from 30 to 60 days. Or does the pharmacy simply supply 2 x 30 day boxes?

There are real savings for the consumer and the PBS.

No one has asked is there also a need to assess the scale of the impact on pharmacy businesses operating outside of major urban areas? The smaller urban independently owned chemists have largely been superseded by the big name chains. Doubtless they have the scale and established presence to adjust to any decrease in dispensing income. For those localities with limited choices (often only one pharmacy) it may be different.

148

Forget the pharmacy.

And let’s put Concession Card holders to one side, and likewise those who are nevertheless eligible for Concession Card holder rates on account of the Safety Net. So, for comparison purposes, we’re talking only about normal purchasers paying the normal price.

The true wholesale cost from the supplier is sometimes tens, sometimes hundreds of times the retail cost. There is a public subsidy, sometimes massive.

The total amount paid by the customer is lower (e.g. one fixed prescription fee v. six fixed prescription fees).

By “fixed prescription fee” I mean what is referred to officially as “PBS patient co-payment” aka “patient contribution”. I believe the current maximum fixed prescription fee is $30 (although I think the actual amount charged is usually a few dollars lower than that).

So you received the same total quantity of drugs but you paid less in total.

Ergo the subsidy has increased.

149

But we are talking about the dispensing fee component only, the cost of the drug and its subsidy from the PBS for the product itself are not affected.

The subsidy increases to match the amount not paid by the user only if the total paid stays the same. For your conclusion to be true you have to justify that assumption.

The reason the Guild is complaining is because they will get less money. The dispensing fee per script stays the same but the number of scripts is halved for the specified items. Therefore the aggregate dispensing fee cost is less, which contradicts your assumption.

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150

I have long term meds and some cost less as private scripts than PBS. Nothing to do with generics so don’t think it is not like for like.

Some are subsidised but others are essentially pass through plus a dispensing fee. A guess is whether the price is at or below the PBS amount as to which is more likely.

151

The Minister has approved the proposal to halve the number of scripts required and to double the duration of scripts for some drugs.

This will save approximately 400 million dollar PA.

A Pharmacy Guild speaker tells us this will be a catastrophe.

Speaking ahead of the government’s announcement, ACT Pharmacist and Capital Chemist Charnwood owner Samantha Kourtis said there would also be a huge financial cost to pharmacies.

“We can’t afford to keep our doors open, offering the same services when this comes through, as what we are now,” she said.

“There will be cuts. We’re anticipating one-third of the pharmacy employment sector will lose their jobs. That’s pharmacists, nurses, pharmacy assistants.”

How is it that when any lobby group that opposes a government measure they say it will cost jobs? I don’t expect them to provide the same service I expect half the amount of service in relation to those scripts. I also expect that halving to have few or no consequences.

A question. How can pharmacists be in such a dire position that they require this subsidy to survive? Is it a subsidy?

Consider a hypothetical world that is slightly different where 60 day scripts are the norm. Pharmacists say they are going out of business, things are crook in Tallarook. The Guild lobbies hard and gets some pollies on side and they propose to halve the dispensing interval to 30 days. Pharmacists rejoice, they will live again and employ more staff they say. Is it wise to prop up the industry by doubling the cost of the same service or are there better choices?

Of course if the change will have no such outcome then the hypothetical has no significance.

How do all of you are are on long term medication feel about reducing unnecessary paper shuffling and cost?

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152

Below is a link the the Minister’s press release.

Possibly because they think or, more than likely, know that it will.

The campaign used by the Pharmacy Guild and others in similar situations is no different to that used by Government. The information publicised is likely to be one sided and often degenerates to a standard common with primary school debating competitions

The business model of a lot of pharmacies might become unviable with the lower level of subsidy. Some will need to cut costs to survive. Other pharmacies will have fewer customer transactions so will not need as many staff to serve customers.

One consideration relating to the subsidy it that it allows for pharmacies in many smaller towns to remain viable. Noting that the same objective could likely be achieved by other means, without further lining the pockets of the the owners of large chains.

Providing the system works as suggested by the Minister my guess is that almost everyone will be happy about fewer trips to a pharmacy and doctor.

153

When it is true and if jobs are more important than all the other issues involved and if providing jobs in that way is the best way to do it.

That is three conditions that have to be met, I wonder how often they are. Are they in this case?

154

You asked the question “How is it that when any lobby group that opposes a government measure they say it will cost jobs?”, which has a simple answer. If it can be shown that at least two people will either lose their job or be not recruited to the industry, the statement is correct. The occasions when it would not be true would be close to zero.

No argument has to be overriding for it to be presented or valid. Whilst the Government decision should consider and prioritise all issues, there is no onus on any lobby group or Minister’s press release to support or consider any more than one side of an argument.

155

The lobby group has no such obligation you are correct, they are free to misrepresent and express bias all they want. That is what they do, present one side of the argument.

Ministers on the other hand I expect quite a bit more, both in the arguments they listen to when making their decisions and that they publish as being the important considerations. Ministers work for our society and have obligations to that society. But we digress.

It will be nice to save some time and money come July first.

156

Subjectively or objectively?

  • Ultimately industry sponsored lobby groups are only accountable to their paying members. Some have very deep pockets.
  • Governments on the other hand when communicating a position or that of the non government members do so knowing they are accountable to the Australian public. Most of whom vote and nearly all of whom consume.

It’s worth noting consumers too have lobby groups, although the depths of their finances had always been limited. Some would suggest many are not seen as equals in respect of access or influence. Only a few consumer orientated organisations such as Choice stand out.

I welcome the 60 day option, hopeful it will capture my now lifetime medications.

Note there are approx 5,700 pharmacies in Australia employing approx 60,000. IE approx 1 pharmacy for every 4000 population. If there is any concern for an impact it’s difficult to accept the pharmacies serving larger regional centres or cities are at risk. Around 90% of us live in towns or cities with more than 10,000 population. Enough to support at least 2 pharmacy businesses with room for expansion.

If there is a meaningful genuine discussion to be had, is it about how medical services as a whole are delivered in the less well served regional and remote areas of Australia? It’s made a more difficult discussion when any group looks to use the ‘potential’ for impact on the 5-10% to avoid passing on a benefit to all. If it as such a certainty for smaller regional centres it needs a different solution for just those exceptions?

157

That’s the same thought I had, but not to be. The earliest staring date, for one-third of the eligible medications, is 1 September 2023. The others on the list are expected to move to the new arrangement in two lots on 1 March 2024 or 1 September 2024.

158

Because then it doesn’t look like self interest - and makes it politically more difficult for the government.

Unless you and I are running pharmacies (I’m not!) we don’t know where the truth lies. Right?

A different question to ask is: How can pharmacists be in such a dire position that they require this level of business to survive?

That’s largely a rhetorical question - as all businesses are in a position of requiring a certain level of business to survive.

However I would suggest two general answers.

  1. Competition means that all businesses are squeezed down to the lowest margins that sustain a reasonable return for the business. That means that they don’t have a lot of ‘fat’ when conditions change.
  2. Competition means that all businesses retain the lowest possible stock levels and rely on “just in time”. Again, that means that they don’t have a lot of buffer if there are supply shocks or demand shocks (which is something that the minister seems to be dancing around, and there will be a demand shock in the short term with such a change unless it is managed very carefully).

If you want an illustration of the silliness of the minister’s argument … during the pandemic, Australians as a whole did not take more dumps but we still managed to achieve widespread total stockouts on toilet paper.

It is still unclear to me what will happen if the script specifies that one repeat is quantity X and the pharmacy does have stock of the medicine but does not have quantity X “available”. Do they dispense the quantity that they do have available and call it one repeat? Is there potential for subversion of this measure? Or in this scenario are they obliged to decline the sale and the customer can continue the fruitless search in another pharmacy?

The thing that really bugs me about this change is that if the result is that pharmacies are making lower margin on selling medicines then they will probably move to selling higher margin irrelevant crap. That’s what has happened in petrol stations and has already happened to an extent in pharmacies. So you will be able to go into the pharmacy and buy everything except the thing that you actually went there to buy. :wink:

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159

Have had that happen. The pharmacy dispensed what they had and the remainder 2 days later when they got it. Since I am local to the pharmacy and went by regularly it was no drama but if I lived beyond Bourke and had to collect it I might not be so sanguine. The option of delivering would depend on who paid, eg not me.

A similar argument was made as Chemwarehouse proliferated and pushed prices down where they operated. Today many competitors will meet a local Chemwarehouse price if asked. They remain in business and it appears the Chemwarehouse franchisees (by whatever name) are doing very well. They sell lots of crap from supplements to cosmetic items to this and that at decent prices too.

As we follow along behind the USA with so much, that horse bolted last century. CVS and Walgreens, RiteAid and others sell scrips almost as side businesses. Your analogy to petrol station would be highly appropriate with them, missing only the pumps. Walmarts and their competitors have pharmacies also. For those checking fire up your VPN as they mostly geo-block.

160

There is no relevance as people cannot panic buy prescription drugs for irrational reasons.