PHARMACY ownership rules need to be reformed to cut red tape and reduce Pharmaceutical Benefits Scheme (PBS) costs, Grattan Institute Health Program Director, Stephen Duckett, believes.
In the Institute's Commonwealth Orange Book 2019: Policy priorities for the Federal Government, Duckett said there was "no rhyme or reason about how many pharmacies can be owned in a state".
"The PBS is completely bound up in red tape," he said.
"Who can own a local pharmacy is regulated by state governments; so too how many pharmacies they [pharmacists] can own.... [however] where new pharmacies can be located is regulated by the Commonwealth Government, with strict rules limiting competition by specifying minimum distances between pharmacies.
"This regulation benefits pharmacy owners more than customers," he said, urging governments to roll back these regulations, starting by relaxing location rules and ownership controls in metropolitan areas "to promote competition to reduce prices and improve services".
Duckett also called for therapeutic group premiums to be extended to cover all gaps in drug costs regardless of whether molecules have been subject to price disclosure, saying the Government was "wasting money on over-priced drugs" urging the next Federal Government to "cut a better drug deal" to strengthen the PBS.
Duckett said the 'therapeutic group premium' was a "good idea in theory, but in practice is full of loopholes and no longer works".
He said the Grattan Institute had estimated savings of over $240 million annually by extending therapeutic group premiums to cover all gaps in drug costs within the seven existing groups, while "extending Australia's relatively small list of therapeutic groups from seven to 18 could save the Commonwealth Government an additional $205 million a year".
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