‘Public interest rather than pharmacy interest’ – CHF on the Competition Policy Review

bottle of spilt pills in a dollar sign On 22 September 2014 the Competition Policy Review Panel released their Draft Report. The Consumers Health Forum of Australia made a submission to the review which highlighted a number of areas for improvement, and CHF is pleased to see that many of our comments have been picked up by the Panel.


CHF asked the Review Panel to consider the impact of the current pharmacy location and ownership rules, and whether these serve the public interest and the interests of health consumers.

The Panel noted that the Consumers Health Forum, National Seniors, Chemist Warehouse, and Professional Pharmacists Australia call for changes to the regulations.

“The Panel does not consider that current restrictions on ownership and location of pharmacies are necessary to ensure the quality of advice and care provided to patients, and we agree. Such restrictions limit the ability of consumers to choose where to obtain pharmacy products and services, and the ability of providers to meet consumers’ preferences” said CHF CEO Adam Stankevicius.

Trade Agreements

CHF raised concerns that leaked versions of the ongoing trade Trans-Pacific Partnership (TPP) negotiations suggest that new provisions could prevent the use of effective pricing mechanisms for medicines and increase the influence of the pharmaceutical industry over decision making.

“This would be an unacceptable measure and has the potential to undermine the fundamental principles of our health system.

We are pleased to see the Panel’s recommendation that an overarching review of intellectual property be undertaken by an independent body, such as the Productivity Commission. Trade negotiations should be informed by an independent and transparent analysis of the costs and benefits to Australia of any proposed IP provisions. Such an analysis should be undertaken and published before negotiations are concluded.”

Codes of Conduct

The Panel has been given evidence that of codes of conduct, including those in the health sector, are perceived to be lacking in meaningful enforcement sanctions and the capacity for public enforcement.

“Establishing a single code of conduct for the promotion of therapeutic goods would provide the Australian community and health consumers with reassurance that the promotion of medicines and other therapeutic goods is ethical, competitive, transparent and ultimately done for the public benefit.

“The introduction of civil penalties and infringement notices for breaches of codes strengthens the Competition and Consumer Act (CCA) enforcement options. Any change to CCA codes could consider whether they should apply penalties for non-compliance.”


The Australian Competition and Consumer Commission (ACCC) has the ability to grant authorisation to certain representative bodies such as the Australian Medical Association (AMA) and the Australian Dental Association (ADA), to collectively negotiate with state and territory health departments the terms of contracts, including fees, for the provision of health practitioners and services.  ACCC grants authorisation on the basis that there would be some public benefit in the form of transaction cost savings and enhancement of effective representation of rural practitioners in negotiating service agreements.  However, in its recent decisions the ACCC has granted authorisation of these anti-competitive arrangements in the absence of any evidence to demonstrate that they are in the public interest.

“While we note that these authorisations may have a positive influence on the retention of rural health workforce and provide transaction cost savings for members of these organisations, the actual impact on rural and remote consumers is a critical metric in determining the public benefit claims. CHF would expect that there is a requirement to provide evidence to support a public benefit claim of such an authorisation.

Therefore, we are pleased that the Panel believes that incorporating a wider range of business, consumer and academic viewpoints would improve the governance of the ACCC.”

Environmental and consumer protection exception

“CHF is supportive of the current CCA exemptions, which allows boycotts in circumstances where the dominant purpose of a boycott relates to environmental or consumer protection issues.

“We would be very concerned if there was an intention to dilute these provisions. Consumer protection and welfare should be the paramount objective of Government regulation in this area, and consumers cannot be deprived of their freedom to seek and communicate information that guides their decision-making in the marketplace, including where it relates to consumer, ethical or environmental concerns.”

This position was noted by the panel and the report states that consumer and environmental based organisations argue for retention (or expansion) of the exception, while industry groups argue for its removal.

Private Health Insurance

The only red flag for CHF in the Draft Report is Private Health Insurance.

The Panel feels it is important that consumers have access to products that meet their needs, including in the area of private health insurance, and that some deregulation may be worth investigation.

CHF has previously noted with concern suggestions by the National Commission of Audit that there may be scope for ‘lighter touch’ regulation of the private health insurance sector. In particular, price regulation of premiums could be replaced with a price monitoring scheme and health funds could be allowed to expand their coverage to primary care settings.

Ensuring that consumers are informed and engaged with their choices about private health insurance, particularly if there is an expansion into primary care, is vitally important. CHF encourages the Government to have a thorough conversation with consumers before any changes are made to further deregulate the private health insurance market.

CHF has been calling for a broad Productivity Commission inquiry into Private Health Insurance prior to any changes to the structure, supervision or coverage of this sector.  Robust, evidence-based analysis must inform any decisions which will impact on the significant number of Australians with private health insurance.

This article was originally published by Consumers Health Forum at https://www.chf.org.au/pdfs/csh/csh-2014-5.html#Public%20interest%20rather%20than%20pharmacy%20interest%20CHF%20on%20the%20Competition%20Policy%20Review