James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Hansard source

Thank you, Senator Leyonhjelm. The pharmacy location rules are a longstanding and fundamental part of the Pharmaceutical Benefits Scheme as we know it today. In 1985, there were just under 5,500 pharmacies in Australia, and an inquiry conducted by the Pharmaceutical Benefits Remuneration Tribunal in 1998 found that there was a marked inconsistency in the location of community pharmacies supplying PBS medicines. It found that many urban areas had clusters of pharmacies while access in rural and remote communities was relatively poor, with significantly lower pharmacy-to-population ratios. For some rural and remote communities, the distance to a pharmacy made it difficult or expensive to access PBS medicines.

The introduction of location rules in 1991, with the first Community Pharmacy Agreement, resulted in a restructure of the industry that reduced the number of pharmacies, in the short term, but encouraged greater efficiency and economies of scale in individual pharmacy businesses. The objective of the pharmacy rules, and the government sees no need to change this, was to encourage a widely distributed network of PBS pharmacies that matched the demographic spread of the Australian community.