Bills

Health Practitioner Regulation National Law (South Australia) (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 12 April 2017.)

Mr KNOLL (Schubert) (11:03): I rise today to speak on the Health Practitioner Regulation National Law (South Australia) (Miscellaneous) Amendment Bill. In doing so, I indicate that I will be the lead speaker.

To put the health minister out of his misery, the bill comes in three parts and the less contentious issue around changes to the giving and tidying up of information between the Australian Criminal Intelligence Commission and CrimTrac, and also some small changes around the unauthorised dispensing of optical appliances are things that we can get on board with. However, I indicate that we will not be supporting clause 4 of the amendment bill, which deals with the increase in the number of licences that the Friendly Society Medical Association can hold from 40 to 45.

To explain our stance, there is a long-held principle, which has strong consensus behind it at both a state and federal level, that the pharmacies in Australia and in South Australia should be pharmacy owned, pharmacy led and pharmacy driven. That is a principle to which all parties over a long period of time have held. As this is an area that is caught up in both state and federal law, there are some things we can do around upholding or choosing not to uphold that principle, but there are plenty more at a federal level on what they can do under the same.

In choosing to make this decision, the Liberal Party here wants to stand up for small, individually owned pharmacies all around South Australia. The reason this area is regulated in this way when other industries are not—for instance, a butcher's shop does not have to have restrictions put on it about how many different outlets it can hold—is that inherent risk comes with the dispensing of pharmaceutical products. They can otherwise be dangerous substances when used and abused incorrectly, so it is only right and fair that these products are regulated quite heavily.

There is a balance that we need to achieve when dispensing these potentially life-saving products, and that is a balance between allowing companies in the medical industry (I am talking about doctors' practices and small pharmacies) to conduct a business, and to successfully conduct a business, whilst at the same time ensuring that appropriate levels of clinical care are provided.

We want a system where, if somebody goes to the doctor and they desperately need an X-ray because they think they have a broken leg and the doctor says, 'Yes, no worries; let's go and do it,' it pays for that service and a person gets appropriate clinical care. We do not want a system that incentivises beyond what is appropriate and right (again, we cannot really get rid of this out of the system completely) for a doctor to prescribe in a clinical situation.

The same thing applies for pharmacists, in the sense that we want small, owned pharmacies to be successful in the businesses they run but that we want them to provide the clinically appropriate care. I am not suggesting for a moment that there are situations where that is not the case, but the long-held principle has been, is now and should be into the future, in my view and in the view of the Liberal Party, that that is best served by pharmacist-owned and pharmacist-run pharmacies, the idea being that pharmacists are the best people to ensure that their eye is very much on clinically appropriate care and delivering the right sort of care as a proper balance between what can be two competing interests.

In doing this, as I said, we are sticking up for the small, individually owned pharmacy or the pharmacist who owns a couple of pharmacies. If there is going to be a move away from this long-held principle, then that is a discussion and a decision that need to be had more broadly. It is a decision and a discussion that need to be had at the federal level as much as at a state level because, whilst we have some power (and we are seeking to exercise some of it today), this very much needs to be driven from a federal viewpoint. Until that changes, I think there is really no reason to see change.

In the minister's second reading speech, he admits that potentially there will be some change at a federal level around competition policy, and also that this may have an impact on pharmacy regulation in the future, and that recommendations may come from the Review of Pharmacy Remuneration and Regulation commissioned by the previous commonwealth minister for health. He goes on to say that there is a community pharmacy agreement in place, and will be in place, until 2020 and that there is a lot happening in the federal sphere that may have an impact upon what the government is seeking to do here today. I think that what we are doing here is jumping the gun on this issue.

The other point I want to make is that we have not been presented with evidence that suggests that there is an unmet demand out there that needs to be met by the friendly societies. There is no evidence of an increased membership base and there is no evidence of an unmet need in the community. In our view, this bill will derogate from this very strong principle, that we want to see small, independently owned, pharmacist-led, pharmacist-owned, pharmacist-run and pharmacist-driven pharmacies across South Australia, run by people who are connected to and involved in their communities and who deliver the highest quality care they potentially can.

The pharmacists I have just described are extremely important to the Barossa. There are a number of pharmacies in my electorate, for sure, and I want to highlight some of them and the good work they do; in fact, as the father of two young daughters, I have visited almost every single one of them. Wayne and Miriam Goodwin at Priceline in Tanunda do an excellent job and provide an excellent service. I have spoken to Wayne on a number of occasions about individual issues, and he has been extremely helpful and appreciative.

Guy Ewing at Tanunda owns a couple of pharmacies. He contributes hugely to the community. He is deeply involved in the community and he is a pillar of the community. People know that when they go to him they will get the very best advice and care and somebody who puts the best interests of the people first and foremost. Tim Siv is at the local Amcal at Angaston. Amcal is our local pharmacy, and they do an absolutely stellar job. They are open early to late for when we need to be there. Nothing is ever too difficult. When we go there seeking medication for the kids or for ourselves, we get a strong commitment to providing advice. It is not just simply handing over the drugs and walking out of the store. They are keen and very interested to know the issues and what is going on so that they can advise us in the best way so they can deliver the best sort of care.

I know that we will have a number of speakers talk to various issues, so I do not propose to take up a huge amount of time in the house. Essentially, in this instance, we will be sticking up for small business, as we are the party that has traditionally done so over a long, long period. We will be sticking up for small, independently owned pharmacies. We see absolutely no reason for change at this time. Until such time that there is a federal consensus that moves away from this very important principle, a principle that has been in place for a long time, we see no reason to support clause 4 of this amendment bill.

Mr PEDERICK (Hammond) (11:14): I rise to speak to the Health Practitioner Regulation National Law (South Australia) (Miscellaneous) Amendment Bill 2017. I reiterate what the lead speaker, the member for Schubert, said—that we will be supporting small businesses, that we will be supporting competition and that we will be supporting the individual pharmacy owners in this bill. We will not be supporting the increase one group wanted in their ownership capability, but we will be supporting other measures in the bill.

It is interesting to note the growth of pharmacies, and some have turned into quite big businesses. For example, there is a Chemist Warehouse in Murray Bridge as well as, I think, at least six other pharmacies around my electorate, in places like Tailem Bend and Goolwa. Pharmacies are a very important part of everyone's life. Certainly, as you get older, you find that you need to go to them more and more often for various things, not just for yourself but for your family. They are a very important part of our community, and we need to ensure that the legal and regulatory framework around chemist ownership and pharmaceutical supplies throughout the state is right.

The Health Practitioner Regulation National Law (South Australia) Act 2010 provides the legislative framework for the professional registration of health professionals, and it also deals with related matters that are not part of the national registration scheme, including pharmacy regulation. Under the act, all pharmacy premises and their owners must be registered with the Pharmacy Regulation Authority South Australia, primarily to protect the safety of the public—and that should be paramount.

The regulatory provisions include a requirement that an entity be limited on the number of pharmacies it may own. A pharmacist can individually own up to six pharmacies, but there is no cap on the number of pharmacies owned by individual pharmacists in aggregate. In regard to ownership, most European countries and all Australian jurisdictions require pharmacies to be owned by pharmacists to uphold the quality of pharmacy services and protect the sector from the damage perceived to have been done by the penetration of large corporate chains in the United Kingdom and the United States of America.

The strict regulation in Australia is aimed at stopping major chains from getting involved in the industry, but the regulatory framework can be subverted. There are some companies that have over 300 pharmacies through maintaining a web of partnerships that interconnect around members of two families. There are others that have accumulated a range of up to about 25 pharmacies. At the last federal election, Prime Minister Malcolm Turnbull wrote:

The Coalition continues to support the model of pharmacies being owned by pharmacists to ensure community pharmacy remains focused on the needs of patients. The established community pharmacy model continues to serve Australians well.

Friendly societies are allowed to own pharmacies in all jurisdictions except the Australian Capital Territory. The bill we are discussing today was introduced on 12 April 2017, and the major element, as I indicated earlier, is to increase the limits on pharmacy ownership for friendly societies. The Friendly Society Medical Association Limited, trading as National Pharmacies, was established in 1911 as a mutual organisation where profits made through operations are returned to members in the form of monetary benefits and services.

By 1928, National Pharmacies owned and operated seven pharmacies, 13 pharmacies by 1939 and 26 by 1947. Since 1947, National Pharmacies' ownership has been capped at 26 from 1947, 31 from 1961 and since 2007 the cap has been set at 40. National Pharmacies have over 200,000 South Australian members, pays a payroll tax of around $1.56 million per annum and employ 1,000 people. Other friendly societies are limited to nine pharmacies in total. Only one such pharmacy operates, and that is in Mount Gambier.

Since 2014, National Pharmacies have sought to increase their cap by 15, from 40 to 55. They particularly seek that rise to, in their words:

…give National Pharmacies the opportunity to maintain their market share—that is to operate the same proportion of pharmacies as a percentage of total pharmacies that they owned in 1947 when the cap was introduced.

They further argue that when the cap was first introduced in 1947 National Pharmacies had a 12.1 per cent share of South Australian pharmacies but that their share has now fallen to 8.7 per cent. An increase to 55 pharmacies, as at today, would have provided ownership of the same percentage of total state pharmacy numbers that existed when the cap was first introduced in 1947.

I note that this bill seeks to increase National Pharmacies by five rather than the 15 previously sought. In National Pharmacies' calculations, this reduces their market share from that top level in 1947—where they want to be—back to 9.4 per cent. The Pharmacy Guild opposed the proposed increase on the ground that National Pharmacies should only be given additional pharmacies as their membership numbers grow to enable them to service member demand. National Pharmacies themselves admit that their direct membership is stable but make the point that 20 per cent of their customers are not members and that new pharmacies would help them grow their membership.

In regard to the ongoing Pharmaceutical Benefits Scheme (PBS) reforms, National Pharmacies make the argument that they need to increase as well. They make the point that, in March this year, 17 South Australian staff were made redundant and that, whatever happens in regard to the Pharmaceutical Benefits Scheme and potential reduction in income, this affects pharmacies across the board, and the Pharmacy Guild certainly makes that point.

Regarding the view of the United Friendly Societies pharmacy in Mount Gambier, which is the only other friendly society that operates a pharmacy in South Australia, it does not support a transfer of all the unallocated numbers to National Pharmacies. In regard to other Pharmacy Guild concerns, the guild also objects to the increase in the cap on the basis that National Pharmacies should not be allowed to grow because their exemption from the principle that only pharmacists should own pharmacies is the result of grandfathering, which should not be allowed to be perpetual.

The guild's submission would not only mean that the cap should not be increased, but that the participation of friendly societies in the industry should be at least frozen or even phased out. The Pharmacy Guild also claims that friendly societies have unfair tax advantages and receive benefits as wholesalers. Both these matters are determined by commonwealth law and policy. National Pharmacies challenge that alleged tax advantage and refer to material from the commonwealth Treasury. They also point out that many individual pharmacists participate in buying groups.

Regarding the interaction with commonwealth regulation of pharmacies and what happens at the state level, the South Australian government sets pharmacy ownership limits for individual pharmacists and friendly societies and the PBS and Pharmacy Location Rules are regulated by the commonwealth government. A PBS licence is necessary to operate a pharmacy outlet and the Pharmacy Location Rules set out strict limits on where pharmacies are allowed to operate. These restrictions limit the overall number of pharmacies in South Australia.

We do not support this part of the bill passing because the raising of the cap, if this bill does pass, will only lead to new National Pharmacies being established if a pharmacy becomes available for sale or a greenfield opportunity is found. There are national discussions about the impact on pharmacy regulation in the future, including the current commonwealth Review of Pharmacy Remuneration and Regulation. The outcome of these discussions may impact on commonwealth, state and territory laws. We are told that any changes would be unlikely to be implemented until after the expiry of the Sixth Community Pharmacy Agreement, which expires in the year 2020. Whatever happens with this legislation, National Pharmacies are still very keen to have a further increase in their ownership cap, so we need to take note of that.

As I indicated earlier, regarding services to the regions, a pharmacy is a very important part of the total health effort in any community. There have been some changes recently regarding SA Health and its practices in relation to hospital pharmacies, whereby hospital pharmacies are supplying pharmaceutical products to citizens who are not currently patients of the hospital and a centralised supply of pharmaceutical products to hospitals, and this has a direct impact on regional pharmacies.

There are a couple of other amendments in this bill about selling magnifying or ready-made spectacles. They can currently be sold without a prescription, provided that a warning label is attached to the glasses stating that they are not prescription glasses. The bill is seeking to remove the requirement of the manner in which the warning label is to be affixed to the ready-made spectacles. There is another minor technical amendment to give effect to the merger of the CrimTrac agency with the Australian Crime Commission regarding investigating the potential of any criminal history of any individual pharmacist or health practitioner involved in the field.

We support the minor amendments but, with regard to pharmacy ownership and having major change just to increase their presence, we support competition, we support individual pharmacy owners and wish them to become more competitive in the field rather than giving one of the major players a larger presence in the field of pharmacy ownership. That is our position on the bill, and I look forward to the rest of the debate.