5 things GPs need to know about the Pharmacy Guild

“Americanisation” was a quick and effective distraction hitting the media this week. The real story is a protected pharmacy ownership lobby seeking greater control over diagnosis, prescribing and dispensing, with general practice expected to absorb the consequences.

The Pharmacy Guild of Australia saw the threat quickly. The Grattan Institute report had put a spotlight on protected ownership, restricted competition, opaque funding negotiations, pharmacy profits and the political influence of the pharmacy ownership lobby.

The response was immediate: warn of the “Americanisation” of Australian healthcare and make the story about Coles and Woolworths. It worked. Once again, the headline moved faster than the evidence. But the Grattan report was not simply asking whether supermarkets should own pharmacies.

It was asking why pharmacy owners receive protections no other healthcare business receives, how billions of dollars in public funding are negotiated, and why those same protected businesses are being allowed to diagnose, prescribe, dispense and profit from treatment.

General practice cannot be treated as collateral damage while the pharmacy lobby pursues that agenda.

As RACGP WA Chair, we have taken pharmacy prescribing head-on. I challenged government, fought for stronger safeguards and walked away when consultation became a box-ticking exercise. Colleagues across the RACGP have mounted that fight nationally.

Here are the five things every GP, and indeed every Australian, should know about the system through which we obtain most of our medicines.

The Pharmacy Guild of Australia represents owners and has huge political influence

The Pharmacy Guild of Australia does not represent all pharmacists. It represents community pharmacy owners.

There is nothing wrong with pharmacy owners having strong representation. GPs need strong representation too.

But we must be clear about whose interests the Pharmacy Guild of Australia represents.

According to the Grattan report, the Guild had 4,154 member pharmacies in 2023, approximately 70% of Australia’s community pharmacies. It does not represent Chemist Warehouse stores, which account for around 9% of pharmacies and likely a larger share of the market. There is a brilliant corporate strategy story behind the latter, which I will write about soon.

An employed pharmacist and a pharmacy owner do not necessarily have the same financial interests. Patients do not necessarily share the interests of either group.

Yet the Pharmacy Guild of Australia negotiates directly with the federal government over arrangements distributing about $3.8 billion in taxpayer and patient funding each year. These negotiations occur behind closed doors, with limited external scrutiny or transparency around the evidence used.

This is not simply another professional organisation making submissions to government.

Grattan found that the Pharmacy Guild of Australia donated $2.5 million to political parties over the five years to 2024–25, making it the largest political donor in healthcare.

It is little surprise that State premiers and health ministers are appearing across social media to attack general practice while promoting the pharmacy lobby’s agenda.

That political and financial strength also explains how quickly a detailed report about funding, competition and governance was reframed as a campaign against the “Americanisation” of healthcare.

My takeaway for you: Governments must distinguish between the interests of patients, pharmacists and pharmacy owners.

No other healthcare group receives this level of protection

Australia restricts who can own a pharmacy, how many pharmacies one person may own and where a new pharmacy may open.

In most jurisdictions, only registered pharmacists can hold a financial interest in a pharmacy. State rules generally limit an individual’s interest to no more than six pharmacies, with lower caps in some jurisdictions. Commonwealth location rules can prevent a competitor from opening near an existing pharmacy and prohibit new pharmacies directly accessible through supermarkets.

When I opened my practice, I had never seen such interest in the position of a door handle. That was where the measuring tape began when determining whether a pharmacy could open nearby.

Wild times.

No other major group in healthcare receives this combination of ownership restrictions, limits on new entrants and protected geographic territory. GPs, dentists, optometrists and specialists do not receive comparable protection.

Before my words are misappropriated, this is not an argument that general practices should be protected from competition. Competition is a normal part of operating a healthcare business.

The question is why pharmacy owners alone should receive such extraordinary insulation from it.

These rules have not prevented corporate concentration. About 60% of community pharmacies belong to banner groups. Grattan also cites a 2018 estimate that the four major banner operators at that time controlled 73% of the market.

My takeaway for you: Australia has restricted local competition without preventing large-scale consolidation. The community pays for this both ways.

Patients and taxpayers may be paying the price

The financial arrangements underpinning community pharmacy are unusually difficult to scrutinise.

The standard dispensing fee is around $9 per medicine, but Grattan found that it is not based on a current independent assessment of the actual cost of dispensing.

No comprehensive costing study has been completed since 1989. Grattan says attempts to collect the financial information needed to conduct one have been resisted by the Pharmacy Guild of Australia.

Patients may also pay an additional $2.80 on some prescriptions, despite Grattan concluding that the charge does not purchase an additional service.

A $1 PBS discount saved patients about $48 million in 2022–23. It has since been removed for general patients and is scheduled to end for concession patients in 2029.

Meanwhile, the Pharmacy Guild of Australia’s own survey data suggest average pharmacy profits have more than doubled in real terms over the past decade.

My takeaway for you: Billions of dollars in public funding should come with independent costing, transparent negotiations and clear evidence of value.

“Americanisation” is the distraction, not the argument

The Pharmacy Guild of Australia’s response was politically agile.

Rather than defend pharmacy ownership restrictions, protected locations, pricing arrangements and private funding negotiations, it focused public attention on supermarket pharmacies.

A broad debate about protectionism and public accountability was transformed into a contest between the trusted local pharmacist and Coles or Woolworths.

That is a false choice.

Grattan recommends reforming pharmacy ownership and location rules, allowing greater price competition, independently setting fees and opening government negotiations to greater scrutiny.

Supermarkets are one possible new entrant under reform. They are not the reform itself.

Concern about supermarket market power does not justify shielding every existing pharmacy owner from every potential competitor.

Rural communities deserve reliable access to medicines. That access should be supported directly and transparently through targeted government intervention, rather than used to defend blanket restrictions across the entire country.

“Americanisation” makes for a compelling headline. It does not answer the findings raised by the RACGP, the Sax Institute review or the Grattan Institute.

My takeaway for you: Do not be distracted by the supermarket narrative. The real issue is entrenched protectionism and weak transparency.

The same protected businesses now want to prescribe

Here is the contradiction.

The Pharmacy Guild of Australia says ownership restrictions protect healthcare from commercial influence. Yet it wants those same protected businesses to diagnose, prescribe and profit from dispensing the treatment.

If that conflict is dangerous when a supermarket owns the pharmacy, it does not disappear when a pharmacy prescribes what it sells.

The Sax Institute review found no high-quality evidence for any of the 19 common or minor conditions examined, or the three chronic conditions reviewed. Only two reported clinical outcomes and only two reported safety outcomes.

Yet pharmacy prescribing continues to expand.

General practice is then expected to manage the fragmented records, missed diagnoses, inappropriate antibiotics and loss of continuity that follow. We cannot become the safety net for poorly evidenced retail prescribing while another sector collects the funding, activity and political credit.

Pharmacists have vital expertise. Grattan’s proposed $80 million investment in non-dispensing pharmacists within general practices and Aboriginal Community Controlled Health Services offers a better model. It strengthens the patient’s care team without creating another retail prescribing service.

If elected RACGP President, I would support that collaboration while opposing further pharmacy prescribing expansion without independent evidence, shared clinical information and clear accountability.

My takeaway for you: Protection from competition cannot become a licence to prescribe while general practice is left carrying the clinical risk.

General practice cannot be taken for a ride while the pharmacy lobby expands its influence, income and clinical reach.