A popular prescription drug discount will end after the federal government struck a deal with pharmaceutical lobbyists to cut funding.
Chemist Warehouse will no longer be able to offer customers a $1 discount on medicines after lobbying against the practice by the Pharmacy Guild of Australia.
The Albanian government announced that the program will not be reimbursed during Tuesday’s budget speech.
A Pharmacy Guild spokesperson said the decision to scrap the scheme would provide “much-needed relief” for Australians “struggling with the cost of healthcare”.
The Pharmacy Guild, one of Canberra’s biggest political donors, has been fighting the discount scheme since its introduction eight years ago..
Chemist Warehouse will no longer be able to offer $1 discounts on prescriptions
The Albanian government did not continue funding the plan that had been operational since 2016.
A spokesperson for Chemist Warehouse told the Sydney Morning Herald that the measure was a “step backwards and anti-competitive” during the cost of living crisis.
‘Chemist Warehouse has discounted the copay, at no cost to the government, for all of our customers since the optional $1 discount was introduced in 2016.
“In the years since its introduction, Chemist Warehouse estimates that our pharmacies have provided value on the order of $125 million to our customers,” he said.
“With the proposed gradual reduction in the allowable discount, our customers who currently enjoy the benefit of the discount will face a price increase for their PBS medications at our pharmacies.”
The Pharmaceutical Benefits Scheme (PBS) sets the price of subsidized medicines to a maximum of $31.60 for general patients and $7.70 for pensioners and concessional card holders in Australia, an amount that increases annually due to indexation.
Previously, pharmacies were allowed to offer a discretionary discount of $1 off the set price, but Chemist Warehouse had been one of the only stores to offer it.
However, during the budget reading, Treasurer Jim Chalmers said the “cheaper drugs” measure freeze general co-payments for one year and pensioner prices for five years.
Over time, the plan aims to index the $1 discount until it is reduced to zero and eliminated entirely.
This means that Chemist Warehouse will be forced to increase its prices. until it reaches the standard PBS price charged by other Pharmacy Guild members.
The Guild argued that discounted drugs were creating disparities between drug prices in rural and urban areas.
One pressure group, the Pharmacy Guild, argued that the discount was leading to higher prices.
The president of the union, Trent Twomey, stated that by eliminating the discount the Albanian government could “return universality to the PBS.”
‘On behalf of our members, the union has a strong history of fighting to reduce the cost of medicines. I am pleased that the guild has secured anti-inflationary relief for patients by gradually implementing the universal application of the $1 discount as part of our [pharmacy] negotiations,” said Mr Twomey.
“Freezing maximum drug co-payments by phasing in the $1 discretionary discount will help Australians struggling with the cost of healthcare.”
Indexing co-payments meant customers had to pay more each year overall, Mr Twomey argued.
Former Health Minister Sussan Ley announced the discount program in 2016, which allowed pharmacies to reduce government-set prices by $1 to create competition.
The discount coupons gave Chemist Warehouse the advantage of being able to boast the cheapest drug prices available, as other pharmacies were not participating in the government scheme.
In 2016, the Guild demonstrated against the coalition government that introduced the discount.
Chemist Warehouse, however, campaigned for the opposite and requested that the The amount of $1 will be released to be able to offer even greater discounts.
He also expressed discontent with the Albanian government’s introduction of a policy of dispensing medicines every 60 days, which forced pharmacists to dispense double the amount of medicine to a patient.
Chemist Warehouse has been contacted for comment.
