In the SMH, there is an article titled "The Pharmacy Guild: the most powerful lobby group you've never heard of", in which Matthew Knott writes: "In his final report on competition policy - the first of its kind in more than two decades - economist Ian Harper lays down a challenge to the government: to rip up the rules that make community pharmacy one of the most protected sectors in the economy. New entrants are now banned from opening a pharmacy within 1.5 kilometres of an existing business and must be owned by registered pharmacists. This has shielded community pharmacists from competition from the likes of Coles and Woolworths. Ripping up these rules should, in theory, bring prices down for consumers. The government is considering the report's recommendations and has not indicated whether it accepts or rejects Harper's call to deregulate the pharmacy sector...The consequences of taking action won't need to be spelt out: a campaign, fronted by community pharmacists around the country, against the government (and any crossbench senators who support deregulation).These include pharmacists in marginal seats. Surveys show that pharmacists are highly trusted by the public - rating well above politicians and, for that matter, journalists. As well as self interest, the pharmacy lobby has a set of potent arguments on its side. Most notably that deregulation would allow Coles and Woolworths to become more dominant than they already are."
Another SMH article about the Harper Review notes: "Few believe that the Abbott government has the stomach for another fight. Not after the bruising losses on things like the GP co-payment, university reform, "wait for the dole", and now its pension indexation plans which look unlikely to get through."
A summary article in the Canberra Times is titled - "Pharmacy explainer: what are the benefits of deregulating the pharmacy industry?". Dan Harrison echoes the SMH when he concludes by writing: "Various reviews dating at least as far back as 2000 have considered these issues and made recommendations for reform. Most recently, last year the Commission of Audit recommended location and ownership rules be removed.Why no government has been brave enough to implement reform probably has a lot to do with the legendary lobbying power of the Pharmacy Guild."
A commentary article in The Age is titled, "Harper Competition Review finds bitter pills in pharmacy industry". Peter Martin, the Economics Editor, writes: "The best estimate suggests the [UK] decision to allow supermarkets to sell medicine cut the prices charged by 10 to 30 per cent. Few in Britain would turn back the clock. The rules governing Australia's pharmacies are so strange we've come to think of them as normal. They apply in no other industry. Whereas any Australian can own a doctor's surgery or an electrical or plumbing business, only qualified pharmacists can own new pharmacies. The restriction isn't to ensure that those qualified pharmacists work in the pharmacies, as many of them own many pharmacies or are retired. It's to make sure no-one else can own them, because apparently supermarket goods and pharmacies don't mix...The more important effect of the location rules is to protect pharmacies from price competition and from competition for the government payments that make up over half of pharmacies' incomes. Harper says if there are areas of Australia left unserved after the location rules go (as there are now in Indigenous areas) the government should consider allowing doctors to dispense medicines themselves. It's far from true that Australian pharmacists support the restrictions. The Pharmacy Guild of Australia represents only the 4000 who own pharmacies. Another 20,000 are locked out of ownership and forced to work for those who got in early. These "employee pharmacists" are represented by Professional Pharmacists Australia, which supports a review of the location rules and has incidentally asked the Audit Office to conduct a complete audit of all public money handed to the Guild."
Philip Clarke, Professor of Economics at the University of Melbourne, has written an article for The Conversation, titled "The right prescription: pharmacy sector in dire need of reform". He writes: "The high profitability of established pharmacies mean business sale prices for inner city and suburban pharmacies can run into the millions. And this high purchase price locks out many pharmacy graduates from ever owning their own business. It also means new entrants are saddled with levels of debt that turn what should be profitable business into marginal ones. All this creates what might be termed a cycle of rent-seeking: while the ownership and location rules protect existing owners, the next generation of pharmacy owners will have to buy their businesses at inflated prices. And this makes new owners seek ever more protection from competition to make their business profitable and, in some cases, viable."