‘Get rid of anti-competitive pharmacy rules’: Report

A new Productivity Commission report has urged the Government to drop ‘anti-competitive’ regulations covering pharmacies.
 
The ‘5-year Productivity Inquiry report’ was publicly released last week.
 
‘The Australian Government should remove impediments to competitive pressures in sectors where it has a substantial regulatory footprint,’ the report stated.
 
According to its authors these include ‘removing anti-competitive regulations on the ownership and location of pharmacies’.
 
The Commission, which was set up to provide independent research and advice to Government, says regulations on location and ownership have reduced competition in local markets.
 
‘There are now fewer pharmacies per head of population than when the regulations were introduced – and have facilitated the establishment of local monopolies – four pharmacy operators control 73% of the market share (through franchising and the like),’ its research found.
 
‘Australian governments should follow the lead of the United Kingdom and the United States where pharmacy colocation – for example, pharmacies located in supermarkets – is allowed.’
 
An interim version of the report, published last year, also backed reform of the existing rules, and noted that governments could swiftly change the current set-up.
 
‘These impediments to competition are purely due to the regulatory framework and could be changed by governments immediately,’ it found.
 
The Commission notes there are ‘relatively few’ circumstance in which the location of businesses in a particular industry are restricted, saying this typically takes place to ‘minimise adverse social outcomes’.
 
It gives the example of a cap on gaming machines used in some jurisdictions.
 
‘The location restrictions that governments apply to retail pharmacy, however, stand in stark contrast to this,’ the authors wrote.
 
‘Rather than restricting an activity that could be expected to have an adverse social or environmental outcome, the Government restricts the location of a business that contributes to community health and wellbeing, and thereby limits the scope for getting improved outcomes for consumers.’
 
The recent analysis also recommends that the Australian Government work with AHPRA to expand MBS and PBS items to nurse practitioner services ‘that currently receive inadequate funding’.
 
‘Consideration should be given to amending requirements for collaborative arrangements and to credentialing policy, given their importance to the employment of nurse practitioners,’ the report states.
 
Another recommendation is for that state governments to undertake ‘similar’ pharmacy trials to those undertaken in Queensland and NSW.
 
However, the Productivity Commission says that authorities should ensure appropriate funding arrangements are in place to ‘encourage the use of evidence-based trials’.
 
It said more investigation is needed before broader conclusions could be formed.
 
Many GPs flagged strong unease about evidence from Queensland’s UTI pharmacy prescribing pilot, which has now been made permanent – and the Productivity Commission acknowledged those concerns and suggested future schemes should apply different evaluation methods.
 
An official report into the UTI pilot indicated that 87% of patients reported their symptoms as resolved, while 13% said they were unresolved. An AMA survey, which was strongly contested by the Pharmacy Guild, also suggested there were ‘alarming’ complications from the pilot.
 
‘Some issues in the collection of data were also noteworthy and should be rectified in future trials,’ the Commission stated.
 
‘Effort was made to prompt pharmacist to follow up patients, but it remains possible that a lack of reporting and ineffective or inappropriate treatment could be correlated and bias the results.
 
‘Future reporting should ensure data collection methods are independent of trial subjects.’
 
The Commission also suggests giving support through the MBS and PBS in pharmacy prescribing trials, given increasing access is cited as one of main drivers for the trials.
 
It notes that the forthcoming North Queensland pilot will require patients to cover the costs out‑of‑pocket.
 
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