MONIQUE ROSS. Why the Pharmacy Guild is the most powerful lobby group you’ve never heard of (ABC News)Jul 5, 2019
It’s been called the most influential lobby group in Australia, and some believe it has the power to bring down a government if it really flexed its muscle.
It has nothing to do with miners, banks, the gambling industry or the church — in fact, there’s a good chance you’ve never heard of it before.
The Pharmacy Guild represents pharmacist-owners, so businesses in every community (and every electorate).
And it’s very good at getting what it wants.
It has achieved restrictions and laws that effectively shield its members from competition — it’s why we don’t have pharmacies in our supermarkets, and why you never see two pharmacies very close together.
“They’ve been extraordinarily effective in influencing government policy funding and regulatory decisions over a long period of time,” says Jennifer Doggett, chair of the Australian Health Care Reform Alliance.
“They’re probably regarded as the most influential force in the health system.
“They have … been able to maintain a funding and regulatory regime which privileges and protects them from competition in a way no other sector has been able to achieve.”
A complex set of rules
These protections primarily relate to who can own a pharmacy, and where.
The rules are complicated, to say the least.
Only a registered pharmacist can own a pharmacy, which locks out big companies like Coles and Woolworths.
And “location laws” mean individual pharmacies are protected from each other.
In larger urban areas, a new pharmacy cannot be opened closer than 1.5 kilometres from an existing pharmacy.
The new pharmacy also has to be within 500 metres of a full-time prescribing medical practitioner and a small supermarket, or within 500 metres of a large supermarket, in which case you don’t need a doctor.
These distances are straight lines, and there are plenty of other requirements as well — we’re barely scratching the surface.
“I’ve heard it sometimes comes down to the most ridiculous minutia of how to measure it,” Ms Doggett says.
“I have heard examples of where doors have been moved, because I think the measurements go from the front door of one to the front door of the other, so by just shifting a door a few metres, or having the door on one corner instead of the other corner, you can meet those restrictions.”
The Guild says the rules benefit patients “wherever they live”.
“The location rules ensure that community pharmacies are established where there is a genuine community need, creating a viable network across the country where patients need timely and equitable access to medicines,” reads a statement posted on its website.
But Ms Doggett says there is “certainly good evidence” that the restrictions mean we pay more for medicines than we should.
“Collectively we’re paying about half-a-billion dollars a year more than we should for prescription medicines,” she says, citing research by the Grattan Institute.
And consumers, she says, also lose out on convenience.
“There has been a whole range of evidence to show that the benefits to consumers of being able to fill a prescription at a supermarket, where you go and do all the rest of your shopping, would far outweigh any negatives,” she says.
“To have to go and make a special trip to a separate location to fill a prescription … only benefits pharmacists.”
She says successive inquiries and reviews have “almost unanimously identified the anti-competitive regulations as not being in the consumer interest and recommended that they be disbanded over time”.
These include the Wilkinson competition policy review, the Harper review, a National Commission of Audit inquiry and a Productivity Commission review.
But the Pharmacy Guild has seen off attempts to make the multi-billion-dollar sector more competitive.
It has also successfully resisted moves to restrict the sale of natural and complementary medicines in pharmacies, or at least to display them in a designated place within the pharmacy.
“They have been very effective in engaging in that political process to influence the outcomes of those decisions,” Ms Doggett says.
An ‘extraordinarily potent weapon’
So where does all that power come from?
Pharmacists are one of Australia’s most trusted professions, and that trust is perhaps the most critical weapon in the guild’s arsenal.
“There’s a bit of a perception by politicians that if you upset that group they will bad-mouth you to every single person they encounter,” says Crikey political editor Bernard Keane.
And with a vast network of 5,700 community pharmacies across Australia, they are encountering a lot of people.
“And who are they talking to? They’re talking to the elderly,” Keane says.
“So the Coalition in particular is vulnerable to a scare campaign from the Pharmacy Guild to say, ‘We don’t like this so we will tell all of our customers. And we will put up posters telling our customers that the government has made a terrible decision that will hurt them.'”
And whether it is a matter of perception or reality, it is a huge threat.
“[It is an] extraordinarily potent weapon to wield in discussions,” Keane says.
“This is why you can’t walk into a Woollies or Coles and go to the pharmacy section, because the Pharmacy Guild would go nuts and say, ‘We will destroy you if you did ever allow that.’ It happens.”
In 2015, Chris Walton from the Pharmacy Coalition for Health Reform told The Sydney Morning Herald: “There’s always been a fear that if they ran a campaign they could bring a government down.”
The Guild has also campaigned against individual politicians, such as federal Liberal National MP Andrew Laming.
When Dr Laming called for reform of the PBS in 2006, the Guild reportedly wrote to its member chemists in his electorate, warning of a secretive government plan to “decimate community pharmacy”.
“Your local member Dr Andrew Laming is one of the key people proposing this structural change,” said the letter, according to a report in The Age.
Dr Laming went on to criticise Australia’s drug prices, and the Guild, according to The Age, responded by warning chemists: “If your pharmacy can’t afford to lose $100,000 plus from the bottom line then you need to start doing something about this. Your patients need to be informed that Dr Laming is trying to close community pharmacies.”
Dr Laming told ABC RN that as a first-time MP in 2006, the “sense of trepidation from colleagues regarding the Guild was palpable”.
“But the potential savings from my PBS reform proposals were so large that change was inevitable,” he adds.
“It was clear there was sufficient [measures] on the table to compensate the Guild and wholesalers on the way through, which then-health minister Abbott achieved.
“A decade on, departmental estimates show $13 billion saved to the public purse; industry say closer to $20 billion. While the Guild didn’t hold back change, they succeeded in protecting member interests at a time when cuts might have been faster and more damaging.”
Political donations: ‘Like a facial tattoo in the mafia’
When you want to get something in Canberra, it also helps if you can give something.
“Anyone can donate as much as they like to political parties at the Commonwealth level,” explains Danielle Wood, an economic policy expert with the Grattan Institute.
“There’s no restrictions on the size of donations, nor is there any restriction on the amount that the Commonwealth parties can spend in election campaigns.
“So it’s a bit of a free-for-all at the Commonwealth level.”
The Pharmacy Guild made headlines earlier this year for its $15,000 in donations to One Nation, but its donor power stretches far beyond that.
According to the Australian Electoral Commission, it made more than $220,000 worth of donations in 2017-18 — including to both major parties.
Cameron Murray, a lecturer in economics and the co-author of Game of Mates, says most political donors hedge their bets with both sides — they don’t care who is in power as long if they get what they want.
“It’s best to think of donations as an entry ticket,” he says.
“It’s a signal that you want to play this ‘game of mates’, and if you are given a favour, you will reciprocate in the future, because you’ve put this money on the table and said: ‘My credit’s good, I want to play the game, if you look after me I’ll look after you, and importantly, I won’t dob you in.’
“So it’s like a facial tattoo in a way.
“So most donors donate to both sides.”
And the donations aren’t always headline-making.
In the 1990s Ms Doggett worked as a political advisor for the Australian Democrats, and recalls the Pharmacy Guild being “very forthcoming with assistance in providing campaign materials”.
“For example, they offered to produce a calendar with the leader Meg Lees’s photo on it and distribute that throughout all their pharmacies in Adelaide, and branded as an Australian Democrats resource, if she would just agree to a very bland, non-controversial statement,” she says.
That statement, she says, was something to the effect of “I support community pharmacy”.
“For a minor party with not many resources, that was a massive help,” Ms Doggett says.
“Now that doesn’t necessarily translate to any support for the Guild or the Guild’s policies in parliament. But that is the sort of processes they used.
“Whether it’s a donation at a political party level or just on-the-ground help for a campaign, they are very, very good at engaging with that political process and providing support to not only the parties and individuals who support them, but also to their political enemies.”
Working behind the scenes
The Guild also draws power from the fact that it’s been around for a very long time, since 1928.
“We’ve had a PBS, we’ve had government involvement in the pharmacy sector, since the 1940s,” Ms Doggett says.
“I do think that some of the reasons for some of these regulations, which do benefit them disproportionately and at the expense of consumers, there are some historical reasons for them.
“It’s just that they have been allowed to run on for far too long when the evidence for their efficacy and the net benefit to consumers no longer exists.”
And the Guild is unlikely to put the brakes on its efforts any time soon.
Ms Doggett says it will rightly keep pushing for a better deal for their members, “no matter how good things are”.
The Guild’s website describes its purpose as “representing and promoting the value of the role of community pharmacy in the Australian health care system”.
“The Guild is committed to supporting and maintaining the community pharmacy model as the most appropriate and efficient system of delivering medicines, medication management and related services to the Australian public,” it says.
“A major Guild activity at all levels is close liaison and negotiation with governments, manufacturers, wholesalers and other organisations in the health care delivery system.”
The Pharmacy Guild’s national president, George Tambassis, declined to be interviewed for the Who Runs This Place series.
The Guild also declined to respond to specific questions relating to this article.
“When you’re enormously successful at getting your way, it’s not something you want to advertise,” Keane says.
“The most effective lobbyists are the ones who work behind the scenes … the less scrutiny, the more effective you can be.”
Who Runs This Place? is a four-part series on RN presented by Richard Aedy, exploring how power works and how it is changing.
This article was published by ABC News on the 20th of June 2019.
Monique is the Digital Lead of RN’s Society and Culture programs. She has previously worked as a producer and reporter for ABC News Digital. Follow her on Twitter: @rossmonique