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$19 billion pharmacy deal sign of skewed health priorities

The AMA has accused the Federal Government of skewed health priorities after it announced it would pay pharmacists an extra $600 million to provide an unspecified range of patient services as part of a push to increase their role in the provision of primary health care.

Health Minister Sussan Ley has announced pharmacists will receive $1.2 billion for programs and services as part of an $18.9 billion five-year in-principle Community Pharmacy Agreement struck with the Pharmacy Guild of Australia.

If ratified, the deal – which delivers the sector an annual 4.54 per cent pay rise – would mark a major advance for the nation’s pharmacists in their campaign for an expanded scope of practice, including the delivery of flu vaccinations and the conduct of patient health checks.

Ms Ley said the deal was “recognition of the increasingly important role pharmacists play in a patient’s ‘medical team’ of health professionals, and further demonstrates the Abbott Government’s commitment to delivering greater integration between health services in Australia’s primary care system”.

But AMA Vice President Dr Stephen Parnis said the Government’s decision to award the pharmacy sector a $3 billion pay rise at the same time as imposing a four-year freeze on funding for medical services showed its priorities were “all wrong”.

“Patients have been hit with a Medicare rebate freeze until 2018. Public hospital funding to the states has been cut dramatically. More health programs and services suffered funding cuts in [the] week’s Budget. But the pharmacy sector gets a huge funding boost with no questions asked,” Dr Parnis said. “The Government has its health priorities all wrong.”

As part of the deal, the Government will pay pharmacists a set fee for dispensing medicines instead the current arrangement under which their fee is a percentage of price. Ms Ley claimed the change would ensure no increase in the average dispensing cost, saving $1.5 billion.

The sector has also reluctantly accepted the introduction of a discount of up to $1 on the PBS patient co-payment, which the Government said would make medicines cheaper. The change would also slow the rate at which patients reach the PBS safety net threshold, cutting costs for the Commonwealth.

Last year, the Government increased the PBS safety net thresholds and the patient co-payment. For concession card holders, who account for 80 per cent of all prescriptions dispensed through the PBS, the co-payment is $6.10 per prescription, but medicines are free once the safety net threshold of $366 or 60 prescriptions is reached. For non-concession patients, the co-payment is $37.70, and once the threshold of $1453.90 is reached, further prescriptions are $6.80 each.

The Pharmacy Guild made it clear it was unhappy with the proposed $1 co-payment discount. President George Tambassis said it supported the savings the Government was seeking to achieve through the agreement, “with the exception of the discounting of the PBS co-payment measure, which is a matter for government”.

The Pharmaceutical Society of Australia said it was concerned about the “health impact” of the discount and other savings measures, including the co-payment increase and the life in safety net thresholds.

But Ms Ley said the discount would give pharmacists flexibility to compete on price and quality while saving taxpayers up to $360 million.

In a warning to the sector, the Minister said the measure was also part of a drive to encourage greater competition in the sector.

Current regulations stifle competition by limiting pharmacy ownership to registered pharmacists and banning outlets from opening within 1.5 kilometres of each other.

A Government-commissioned competition review recommended scrapping these restrictions, and the new Community Pharmacy Agreement includes what Ms Ley said was the “most significant independent and public review of the pharmacy sector ever conducted over the next two years, including consideration of both remuneration and regulation, such as location rules”.

The push for an overhaul of these arrangements was given extra impetus earlier this year when the Commonwealth Auditor-General issued a scathing report on the administration of the current Community Pharmacy Agreement, including savings shortfalls, a $300 million blow-out in pharmacist incentive payments, and the diversion of almost $6 million from professional development programs into a “communications strategy”.

Dr Parnis has raised concerns about the allocation, under the new Agreement, of $1.2 billion to fund what the Government said would be “support programs for patients”.

“This is a lot of money for programs that are yet to be devised. We have seen past proposals and worry about fragmentation of patient care because these pharmacy ‘services’ may not add any value to patient outcomes,” he said.

Mr Tambassis said the funding would include $50 million for a Pharmacy Trial Program and $600 million in a contingency reserve to support new and existing community pharmacy programs and services.

And Ms Ley tried to reassure that the money would be used carefully, insisting that all pharmacy programs would be subject to scrutiny and approval by the Medical Services Advisory Committee.

But Dr Parnis said the current concerted push by pharmacists into new and expanded areas of practice, including vaccinations, skin and health checks, mental health assessments and wound dressing was of great concern.

“The Health Minister said that the Government wants pharmacists to play a greater role in the patient’s ‘medical team’ – but pharmacists are pharmacists, not doctors,” he said. “Pharmacists have real expertise. I consult and work with pharmacists every day I’m in my hospital, and that works extremely well.

“I’m just not sure that – the proposals being put forward in this agreement make sense, particularly when they talk about allocating $1.2 billion for this and then we’ll work out the details later.

“Pharmacists are not medically trained to provide medical services, nor are they indemnified to do so. The best primary care is provided by the local family doctor, the GP – the most cost-efficient part of the health system,” he said.

Adrian Rollins