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Australian Journal of Pharmacy : September 2006
guild HEproblem with a radical proposal is that it often does not achieve the intended goals set and, added to that, there may be unintended consequences. The generics reform proposal currently being considered by the Federal Govern- ment has so many variables that it is hard to model and therefore very hard to cal- culate the full impact it will have on the pharmaceutical sector. In fact, the mod- elling is so hard that even the Department of Health has not done the modelling of its proposal. Pharmacists, however, are already making decisions and preparing for the worst. The Guild and other organisations and associations in the sector believe that the proposed changes will ultimately not achieve the desired goal of making better use of generic medicines. Instead, we believe it will eventually bring about a decline in the uptake of generics. The other big issues are that the sector believes that the proposed reforms will undermine patient access to new medi- cines and erode R&D and investment in our innovative pharmaceutical industry, and drive the rate of return on capital invested in full-line wholesaling activities to unsustainably low levels. These are just the most obvious poten- tial consequences. I’d like to take this opportunity to outline some of the others, which we are sure the Department has not yet fully or adequately considered. Pre-registration students It is logical that pre-registration student placements will be put at risk. In any business there are fixed expenses and variable expenses. The two biggest ticket items in expenses in community pharmacy are wages and rent. Rent is fixed and so it is not surprising that phar- macists may be looking at reducing wage expenses moving forward. Other health professionals There is a chronic shortage of health pro- fessionals. While governments at all levels have been playing catch up of late, a rea- son why there is no immediate and easy fix for the health workforce crisis is that all students need clinical placements. Clinical placement for pharmacy is the pre-registration year. Other health pro- 14 ? THE AUSTRALIAN JOURNAL OF PHARMACY VOL.87 SEPTEMBER 2006 from the president Pharmacy Guild of Australia president Kos Sclavos Unintended consequences in generics reform proposal T This action may give some immediate relief from the anticipated pain. However, it is not good in the long term, as the Guild wants to see continued investment in our future pharmacists and pharmacy assis- tants. The data coming through to the Guild is that pharmacists are making the deci- sion now that they will no longer take on a pre-registration student and worried students are contacting the Guild stating that their intended placement for 2007 is no longer available. With a declining PBS due to the Government’s initiatives and declining script volumes, pharmacy revenues are falling For many pharmacists a pre-registra- tion student is an investment which allows them to plan for the period where, hope- fully, the student pharmacist moves on to be an employed registered pharmacist, then manager and eventually partner in some cases. It would be a sad state of affairs if this becomes a wide scale issue and is another point we will raise with government in relation to the unintended impact of the reform measures. fessions are standout examples of why clinical placement is the rate-determining step for the availability of health profes- sionals. Using medical specialists as an example, it is the clinical placement and the necessary supervision that restricts the numbers of entrants. In the last few weeks there has been a lot of media coverage about the number of physiotherapy graduates who will be unable to get clinical placement. Year-end figures a major concern Many pharmacists do not have an accu- rate analysis of their business until 30 June year-end accounts are finalised and have been calculated by their accountant. With a declining PBS due to the Gov- ernment’s initiatives and declining script volumes, pharmacy revenues are falling even before considering further changes to the PBS. Many pharmacists are report- ing a decrease in turnover for the first time in the history of their businesses. This decline is against a backdrop of wages at double digit growth and rent increases above the inflation and GDP rate. All of this translates to a significant decrease in profit. Despite reassurances that this generics proposal is just that—a proposal—phar- macists can take it from me that the Department of Health is committed to its proposal. The downturn in the PBS is not fully accepted and is not seen as a reason why reform should not go ahead. The Guild is continuing to spare no effort in making representations on mem- bers’ behalf on this critical issue. The Howard Government has been very sup- portive of our profession in the past, but now it is up to the Guild to ensure that it does not rush into rash, radical reform that will have many unforeseen negative consequences for the entire sector and patients. ¦