AUSTRALIAN GOVERNMENT EXTENDS BAN ON PHARMACIES IN SUPERMARKETS

One of Australia's leading drugmakers and distributors has come out in support of the government's decision to continue to prohibit supermarkets operating pharmacies. The federal government announced the ban as part of a US$11.1bn deal with the pharmacy sector.

Supermarkets in the country have criticised the move as being against the spirit of competition. However, the government is standing firm, claiming that the legislation will save taxpayers approximately US$350mn a year. As part of the agreement, the wholesale mark-up on drugs will be reduced to 7.5% from 11.1%.

Industry observers have claimed that this measure is likely to have little impact, as most wholesalers offer heavy discounts to pharmacists and as such, the actual wholesale margin is below the 7.5% level anyway.

Under the plans, the dispensing fee for pharmacists will also be raised to US$5.15 for every prescription from the Pharmaceutical Benefits Scheme (PBS), the state-subsidised drug list. Approximately 75% of all drugs consumed in the country are provided through the PBS.