Michael Johnson (Ryan, Liberal Party) Share this | Hansard source

I am pleased to speak in the parliament today in support of the Health Legislation Amendment (Pharmacy Location Arrangements) Bill 2006. As the federal member for Ryan I want to say at the outset that I very strongly support all the pharmacies and pharmacy owners in my Ryan electorate. They do a wonderful job in providing a community service as well as in providing a service in the nature of their small businesses. That is one of the key things I want to get across in this debate on this important piece of legislation—that pharmacists across the country are small businesses also and they deserve the full support of the Australian government.

I am a strong supporter of small business in the Ryan electorate and, as someone who has a great degree of admiration for the health minister, I would compliment him at the outset for his negotiation of the community pharmacy agreement. It was no doubt a difficult and challenging set of negotiations, but I think this legislation strikes the right balance between the government’s overall responsibilities, its national interest responsibilities and, of course, the protection of pharmacists in the country, who provide a very special and unique service in the overall architecture of a health service to the people of this country.

There are some 5,000 pharmacy owners across Australia—in my electorate of Ryan there are almost 1,000 pharmacists—who provide a very important service. In the 2005 Morgan gallop poll, pharmacists came second on the list of those regarded by the Australian community as the most ethical and as being in the most honest profession. I am sure that is a position that they guard very jealously. It is a position which they rightly deserve and one which many others can aspire to.

As I said, I want to commend this bill very strongly. It amends the National Health Act 1953 to implement aspects of the fourth community pharmacy agreement. As part of the agreement, the bill sets out changes to the pharmacy location rules and the Australian Community Pharmacy Authority. Since 1990, the Commonwealth of Australia, through the government of the day and the Pharmacy Guild of Australia, has entered into five-year agreements known as community pharmacy agreements. Primarily, the agreements set out the remuneration that pharmacists will receive for dispensing Pharmaceutical Benefit Scheme medicines—PBS medicines. Over time, these agreements have increased in scope to include other relevant provisions, such as location arrangements and professional pharmacy programs and services.

This is the first opportunity, since negotiations were completed in November last year, that members have had to speak in the House about these agreements. As I alluded to earlier, I recognise that these were very challenging negotiations because of the nature of the sector that all stakeholders were dealing in. I have already congratulated the health minister, but I also want to pay tribute to the Pharmacy Guild for its commitment to come to an outcome that is in the interests of the government, the guild’s stakeholders and, more importantly, the Australian people.

The fourth community pharmacy agreement will provide in excess of $11 billion in payments for the dispensing and supply of PBS medicines. This represents a substantial increase to the $7.9 billion paid under the third agreement. It equates to an average payment of some $11.38 per prescription dispensed. This represents a normal increase of 14.5 per cent on the average payment under the third agreement, which was $9.93. Most importantly, the agreement will achieve $306.8 million in savings over the life of the agreement primarily through a reduction in the wholesale mark-up. This will improve the sustainability of the PBS and help to ensure that new medicines can continue to be listed in the future.

I think it is important for members of parliament to frequently emphasise the importance of policy and initiatives that will address or redress the increasing call upon the PBS budget. We are an ageing population; it is important also to stress that. It is important therefore that government policies take into account our ageing population and the increasing stress being placed on the health budget and specifically on the PBS budget. This is an important aspect of the Australian health policy under the Howard government and it is important that it be maintained, preserved and sustained because it provides a very important benefit to the Australian public.

The new agreement that I am referring to retains the current pharmacists payment structure with payments covering the cost of the medicine, the cost to have the medicine delivered to the pharmacy by a wholesaler, a retail mark-up, a fee to cover the pharmacist’s costs for the handling and storage of medicines and a fee for the pharmacist’s professional advice and service in dispensing the medicine to the patient. One of the important aims that the government wants to achieve through the community pharmacy agreement is, as I have touched on, to ensure the sustainability of the Pharmaceutical Benefits System. This is an important system and it is therefore important that government policies take into account as much as possible the PBS structure. To this end the fourth community pharmacy agreement will establish the community service obligation pool. This funding pool will be used to make direct payments to pharmaceutical wholesalers, to make sure that they deliver the full range of PBS medicines to all pharmacies, irrespective of location, usually within 24 hours. The fourth community pharmacy agreement will also deliver increased funding for rural pharmacy programs and programs which support and improve access to pharmacy services by Aboriginal and Torres Strait Islander Australians. This is a further reflection of the government’s commitment to our Indigenous Australian and also our rural and regional Australians. In total, the fourth community pharmacy agreement will provide some $500 million in funding for professional pharmacy programs and services. This reflects an increase of some $100 million on the allocation under the third community pharmacy agreement.

Changes to the pharmacy location arrangements will aim to deliver pharmacy services to where there is most community need and to provide as well an increased level of competition between pharmacies. It is widely known that the pharmacy location rules state that any pharmacist who wishes to relocate their pharmacy or any pharmacist who wishes to establish a new pharmacy must apply to the Australian Community Pharmacy Authority. The ACPA considers all applications according to location based criteria before approval is given to dispense medications under the PBS program. This can be granted by the Secretary of the Department of Health and Ageing. During the negotiations on the fourth community pharmacy agreement, certain groups—most notably our large, well-known retailer, Woolworths, through its CEO, Mr Roger Corbett, and the Australian Medical Association, through its then president, Dr Bill Glasson of Queensland—were of the opinion that the current pharmacy location arrangements were too protective of the pharmacy industry and that this was competition policy in reverse. Both called for reform which would allow Woolworths to operate in-store pharmacies. Mr Corbett commented on the ABC’s 7.30 Report in April 2004:

For this Government, which is a free enterprise Government, to be taking such action is quite extraordinary.

Other commentators have been less diplomatic, saying that the government has effectively been impotent for not deregulating the pharmacy market. I have given speeches in the parliament previously expressing my strong disagreement with Mr Corbett. With all due regard to his undoubted talents as a very senior and highly respected CEO in this country and to his very successful stewardship of Woolworths, in the parliament today I again put on record my strong disagreement with his views. This government has been very amenable in its policies in allowing greater competition and fostering greater deregulation across the Australian economy. As I have said, I have commented in this House previously on my position. Mr Corbett’s views that the government’s policy on pharmacies is quite extraordinary are quite unwarranted. This government can stand very proud of its record of opening up the economy in its 10 years in office. No doubt it will continue to do so, and I would encourage it to continue to do so.

I know that Ms Janet Albrechtsen, writing in an Australian article on 22 June 2005, also called for the government to act expeditiously to redress this alleged wrong. I offer all due respect to Ms Albrechtsen, who I know has very high respect for Australian government policies. I salute the work that she does as a member of the ABC board. She is doing a fine job in that capacity, and I know that all members of this parliament will acknowledge her contribution to the national political debate through in her articles in the Australian. But on this particular issue I have no hesitation in saying that Ms Albrechtsen is entirely wrong. She is paddling a canoe up the river the wrong way and her paddles are not functioning effectively.

One of the reasons why I very strongly support local pharmacies, not only in my electorate of Ryan but throughout the country, having some degree of support through these community pharmacy agreements is this: not only are they, given the nature of their work, a small business but also they provide a unique service. They provide a very specialised service as part of the allied health group. They are a part of the architecture of the health structure of this country. They are not just another corner shop. They are not just another Boost Juice franchise. They are not just a shop on a shopping strip. You can have a handful of them on the same shopping strip and they can compete. This is not a situation whereby we want pharmacies littered throughout the shopping malls of Australia. They are small businesses first and foremost that provide service of a very professional nature in the health architecture. I reject entirely the comments of commentators who say that the government’s position of standing side-by-side with the pharmacy community in Australia is incorrect. I have strongly supported the Minister for Health and Ageing in his negotiations and I commend him for taking the stand that he has.

The pharmaceutical market in this country is some $9 billion a year. It is little wonder, therefore, that the likes of Woolworths want a piece of that pie. I do not think that anyone would resent Mr Corbett or senior executives of Woolworths for making the representations they are making to have a slice of that $9 billion pie. No doubt if I were a CEO of Woolworths or Coles I would want to have a pharmacy located in my stores. But the responsibility of this government is to protect the overall Australian community and the national interest; it is not to ensure that Woolworths’s share price goes up because all of a sudden it has a big chunk of that $9 billion a year industry.

I know that many of my fellow Australians are shareholders in Woolworths. As an aside, members of the parliament who are shareholders of Woolworths will have that declared on their register of pecuniary interests, and it will be interesting to see who they are. More importantly, this government’s responsibility is to govern in the national interest. Governing in the national interest ensures that the likes of Woolworths are not able to expand their empires without having to take into account the pharmacies in their midst. I want to put on the record very strongly my support of the almost 1,000 pharmacists in the Ryan electorate. I visit their stores frequently and I have a very high regard for their professional expertise. Again, I strongly repudiate calls by any sector of the Australian business community to erode the pharmacy agreements and to entertain the notion that big retail chains include pharmacy stores.

In 2003 an independent study by Curtin University estimated that, if you take into account the value-added service that pharmacies provide to customers when they come into their stores to buy prescription drugs, pharmacists provide over 78 million free consultations annually. When I go to my local pharmacist as a consumer to purchase an item, I invariably end up speaking to him for some five, six or seven minutes. If that were multiplied by the many people who go into his store, and if a price were to be put on it, a very valuable service is being provided.

Studies commissioned by the Pharmacy Guild also show that pharmacies are more than just drug-dispensing counters. Not only do they provide these free consultations but they also provide a degree of care and compassion to their customers that, I would be so bold as to say, someone in a Woolworths pharmacy would not provide. Supervised administration of individual doses occurs in community pharmacies for many thousands of Australians and for patients of doctors who go to their pharmacy and collect their prescribed drugs after a consultation. This is important to note. Counselling occurs in these private locations in the pharmacy on many occasions. It has been estimated that counselling occurs in pharmacies across the country on almost 14½ million occasions annually.

It has been calculated that 385,000-plus screening tests for undiagnosed chronic conditions and 25,000 pregnancy tests were conducted annually in pharmacies. More than 40 per cent of pharmacies are very active in methadone or buprenorphine dosing and needle exchange. While it is true that Woolworths, were it to be granted access to pharmacies, intends to staff its in-store pharmacies with registered pharmacists, I still subscribe to the view that, under the cost-cutting and profit driven environment of these major retail chains, invariably there would come a point where the community would suffer and these valuable services provided by pharmacies would cease. Not only do community pharmacies provide these services but they act as an important check for doctors. It is important to acknowledge that they provide an important complementary service to doctors.

Pharmacy location rules are important not just because they prevent operators like Woolworths from owning pharmacies or because they prevent pharmacies from being located within, adjacent to or connected to a supermarket; they also help to ensure widespread community access to pharmaceutical services and the continued viability of existing pharmacies. This gives much needed security to pharmacists, to consumers and, of course, to the PBS—a structure which this government is striving very hard to keep in check. This bill will extend the operation of the pharmacy location rules to the conclusion of the fourth community pharmacy agreement in June 2010 and also make some other minor changes agreed to under that agreement.

As the federal member for Ryan, which I have had the great honour of representing since 2001 in this parliament, I am a very strong supporter of the some 1.2 million small businesses in Australia. Pharmacies are also small businesses. They are dotted throughout the Ryan electorate and form the small business architecture of this country. It is incumbent upon all of us in this parliament on both sides to strongly support small businesses. I note that the Leader of the Opposition has previously said—he is famous for this remark—that Labor is not part of small business—(Time expired)

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