Pharmacy guild of australia
(Image: Getty)

News has emerged overnight that the Pharmacy Guild of Australia, the peak body representing community pharmacies across the country, donated $15,000 to One Nation in Queensland last year. But pouring money into the coffers of Australia’s political parties is not new for the guild. In recent years, the body has given millions to Labor, the Liberals and the Nationals. Donations are just one element of the guild’s political operation. With members (i.e. pharmacies) in every electorate in the country, and huge control over the provision of medication, the guild has been able to quietly gain a hold over Australian politics, making it one of Australia’s most feared lobby groups.

Who does it donate to?

The Pharmacy Guild plays the donation game as well as anyone. Its contributions are big, regular and bipartisan. According to the Australian Electoral Commission’s annual returns, it made over $220,000 worth of donations in 2017-2018. Over half of this went to the ALP, with the rest going to the Liberals and Nationals. The guild’s donations have sat above the $200,000 mark since the 2015-2016 financial year (although in the past, they have given more to the Coalition than Labor).

The guild also appears to be looking beyond the major parties now. Other disclosure logs from the Queensland Electoral Commission show that, in March this year, the guild gave $1450 to Katter’s Australian Party.

Where does the guild get its power?

On the surface, community pharmacies may be small and unassuming. But together, they make up a formidable political force. In 2011, Crikey called the guild “Australia’s most feared and effective lobby group”, ranking its then boss Kos Sclavos as the nation’s most powerful lobbyist.

One key source of the guild’s power is that it is literally written into legislation, because of the guild’s role in the administration of the Pharmaceutical Benefits Scheme. The scheme provides for chemists to be reimbursed by the government for selling drugs listed on the PBS.

But, according to the National Health Act, a piece of legislation from the 1950s, any agreement about payment for chemists under the PBS must be made through the guild. Since 1991, remuneration has been dealt with through complicated five-year “community pharmacy agreements”, which are the result of long and, at times, tense negotiations between the government and the guild. Over the course of the current five-year agreement, community pharmacies will receive $19 billion from taxpayers. There are also strict controls over who can open a pharmacy and where — each must generally be 1.5 kilometres from its closest competitor to use the PBS.

Having such control in how the scheme is administered — and also having the ear of government — gives the guild considerable influence. So too does the guild’s sheer numbers. There are nearly 6000 community pharmacies in Australia. There is one in every suburb and, of course, numerous in every marginal seat. The guild uses this as a threat to MPs, promising to unleash public campaigns against government policies it sees as hostile to its members’ interests.

What does the guild do with its power?

Reminders of how much sway the guild holds pop up regularly. Just a week ago, News Corp papers reported that the Morrison government had quietly shelved a plan that would allow patients with chronic health problems to obtain greater quantities of medication each time they visited a chemist. The change was recommended by the independent Pharmaceutical Benefits Advisory Committee, was backed by the Australian Medical Association (AMA), and would have saved consumers $240 per year. But it also meant the government would have to pay chemists a dispensing fee six times a year rather than 12. After the guild revolted, putting out a full-page ad in The Australian, and telling its members via email that the changes would devastate community pharmacists, Health Minister Greg Hunt backtracked.

The best reflection of the guild’s power is reflected in what hasn’t happened. For years, it has stifled any attempted changes to the current system, despite review after review. In 2015, the government’s Harper Review into competition recommended changes designed to de-monopolise the pharmacy industry, including allowing supermarkets to enter the market, and loosen the location rules. There’s been little momentum in response to the review. A review for the Turnbull government by productivity commissioner Stephen King made similar recommendations, which were largely ignored. A 2015 audit found that the current system led to inflated drug prices, but allowed some pharmacies to become million-dollar businesses on the back of taxpayer dollars. Another report, by the Australian National Audit Office criticised the considerable secrecy surrounding negotiations between the government and the guild over administering the PBS.

But as ignored reviews pile up, there remains little push for change. While the current PBS arrangements are labyrinthine, difficult to reform, and unlikely to excite the average voter, the guild has a simple and effective message to mobilise pharmacists across the country, should they ever face a threat to their power. It’s a fight most politicians are unlikely to think is worth the hassle.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey