Regional areas 'hit the hardest' in chemist contracts with government

Regional areas paying five times more for standard antibiotic syrups


Former competition watchdog Graeme Samuel said the Hunter is paying the price on common drugs.


A STANDARD antibiotic is more than five times the cost that it could be in parts of the Hunter because of pharmacy regulations that are hitting regional areas hardest, according to former Australian Competition and Consumer Commission chairman Graeme Samuel.

Figures collated by groups pushing the federal government to end rules restricting where pharmacies can operate show standard antibiotic syrups sold at chemists in Port Stephens, Singleton, Morisset, Belmont, Toronto and Cessnock were significantly higher than at discount pharmacies in other areas.

Cessnock residents paid the highest difference during comparisons in August, with the standard antibiotic syrup 5.2 times more expensive than at a discount pharmacy elsewhere.

Mr Samuel said restrictions defended by the Pharmacy Guild in regular contracts with the federal government left consumers paying the price because of lack of competition, and figures showed regional NSW was hit the hardest when compared with metropolitan areas.

The restrictions stop chemists from operating within 1.5km of each other, with conditions allowing relocations every five years. Only registered pharmacists can own chemist outlets.

"If you go into a town and there's one coffee shop and because of a lack of competition they charge $15 for a cup of coffee you'd be pretty outraged," Mr Samuel said.

"If there was only one petrol station in a town and you were charged $4.50 per litre for petrol you'd be just as outraged. Yet because of these contracts between the Pharmacy Guild and the federal government that's the case for pharmaceuticals."

The current contract between the two expires in June, 2020. The federal Department of Health said it was committed to signing a new five-year agreement by the end of this year.

In July department secretary Glenys Beauchamp chaired a roundtable to discuss the new contract that included the Pharmacy Guild, the Australian Medical Association, Consumers Health Forum of Australia, hospital groups and the Chemist Warehouse Group.

Mr Samuel applauded the inclusion of consumer groups after years of contracts that favoured existing pharmacy arrangements because of the political power of the Pharmacy Guild.

"There have been years of reviews into this situation and they all say the same - there's no justification for these rules and they need to change because consumers are paying the price for the lack of competition," Mr Samuel said.

"The government, to its credit, has invited consumer groups to the recent discussions and that's a sign we might see some change."


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