Pharmacy red tape should be cut: submission to Senate Select Committee

by Stephen Duckett


Excessive pharmacy red tape is bad for consumers. The existing red tape is designed principally to protect the interests of pharmacy owners, not consumers.

Red tape controls where pharmacies can open-up shop. Existing location rules restrict the establishment, relocation and expansion of pharmacies across Australia. These rules are anti-competitive and tend to protect incumbent pharmacies and restrict market entry. Red tape stifles competition between pharmacies and results in higher retail drug prices.

Red tape controls who can own pharmacies. These rules are more effective in protecting the commercial interests of pharmacy owners than in serving the public interest. They lock pharmacists into inefficient business models which contribute to high dispensing costs.

The existing red tape did not come from nowhere. Existing pharmacy regulation has been intractable despite several independent recommendations for the removal of ownership and location rules. Grattan Institute research and national audits suggest that the pharmacy industry has far too great an influence on its own regulation.