Fourth Community Pharmacy Agreement

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18 April 2005
ABB036/05

The Australian Government and the Pharmacy Guild have begun formal talks about Pharmaceutical Benefits Scheme (PBS) dispensing arrangements over the next five years.

The government envisages spending $11.75 billion on payments to pharmacy over the period. This is a 30 per cent real increase on the $8.38 billion spent under the current agreement.

Over the next few weeks, the government and the guild will discuss the best and fairest basis for providing this money to pharmacists for the services they provide to the community.

The government also wishes to explore with the guild the possibility of pharmacists' discounting to customers with the co-payment as the maximum rather than the mandatory price for PBS drugs for which the listed price exceeds the co-payment. In order to develop a comprehensive health record, the government also wishes to explore with the guild mandatory recording of all drugs dispensed, not just those dispensed at the co-payment.

Under a new agreement, the government intends to continue to protect the position of community pharmacy. Community pharmacies, however, should have more freedom to compete among themselves under the location rules associated with a new agreement.

The government is concerned about the long term growth of PBS costs (which have been growing at a compound rate of 9 per cent over the past decade). Under existing trends, the government estimates that pharmacy revenue will increase from 0.2 per cent of GDP now to 0.7 per cent of GDP in 2040. This would be an unfair burden on taxpayers, notwithstanding all the good work pharmacists do.

The government intends to reduce the rate of growth of payments to pharmacy under the next agreement with the long-term aim of limiting pharmacy revenue to 0.4 per cent of GDP in 2040 (which would still involve doubling pharmacy's current share of the economy).

For more information call Mr Abbott's office on ph 02 6277 7220.