Huge blow for customers of Chemist Warehouse as Albanese government bows to pressure over discounted medicines

The popular prescription drug discount will come to an end after the federal government struck a deal with pharmaceutical lobbyists to cut funding.

Chemist Warehouse will no longer be able to offer customers $1 off medicines after the Pharmacy Guild of Australia lobbied against the practice.

The Albanian government announced during Tuesday’s budget speech that the program will not be reimbursed.

A spokesperson for the Pharmacy Guild said the decision to abolish the scheme would provide “much needed relief” to Australians “struggling with the cost of healthcare”.

The Pharmacy Guild, one of the largest political donors in Canberra, has fought the rebate scheme since it was introduced eight years ago..

The Albanian government has not continued funding the scheme, which had been operational since 2016

A spokesperson for Chemist Warehouse told the Sydney Morning Herald that this move was a “backward and anti-competitive step” during the cost of living crisis.

“Chemist Warehouse has discounted the co-pay – at no cost to the government – ​​for all our customers since the optional $1 rebate was introduced in 2016.

“In the years since its launch, Chemist Warehouse estimates that our pharmacies have delivered approximately $125 million in value to our customers,” he said.

‘With the proposed gradual reduction in the permitted discount, our customers who currently benefit from the discount will experience a price increase for their PBS medicines at our pharmacies.’

The Pharmaceutical Benefit Scheme (PBS) has set the price subsidized medicines for up to $31.60 for general patients and $7.70 for retirees and concession card holders in Australia, increasing annually due to indexation.

Pharmacies were previously allowed to offer a $1 discretionary discount on the fixed price, but Chemist Warehouse was one of the few outlets to offer this.

However, during the budget reading, Treasurer Jim Chalmers said the “cheaper medicine” measure would do just that freezing general personal contributions for one year and pensioners’ prices for five years.

Ultimately, the plan aims to index the $1 discount until it is reduced to zero and completely eliminated.

This means that Chemist Warehouse will have to increase its prices until it catches up with the standard PBS price charged by the other members of the Pharmacy Guild.

The Guild argued that discounted scripts caused disparities between the price of medicines in rural and urban areas.

A lobby group, the Pharmacy Guild, argued that the discount led to higher prices

Guild President Trent Twomey claimed that by abolishing the discount the Albanian government could ‘restore the universality of the PBS’.

“On behalf of our members, the guild has a strong track record in the fight to reduce the cost of medicine. I am pleased that the Guild has secured anti-inflationary relief for patients by phasing in the universal application of the $1 rebate as part of our [pharmacy] negotiations,” Mr Twomey said.

‘Freezing the maximum out-of-pocket cost for medicines through the phased application of the $1 discretionary rebate will help Australians struggling with the cost of healthcare.’

The indexation of co-payments meant customers were paying more in total each year, Mr Twomey argued.

Former Health Minister Sussan Ley announced the rebate program in 2016, allowing pharmacies to get a $1 discount on government-set prices to create competition.

Discount scripts gave Chemist Warehouse an edge in offering the cheapest drug prices available, as other pharmacies did not participate in the government program.

In 2016, the Guild rebelled the coalition government that introduced the discount.

However, Chemist Warehouse campaigned to the contrary and requested that the The $1 amount is not capped so even greater discounts can be offered.

It also expressed dissatisfaction with the Albanian government’s introduction of a 60-day drug dispensing policy requiring pharmacists to dispense double the amount of medicine to a patient.

Chemist Warehouse has been contacted for comment.