The CPA also responded to government and pharmaceutical industry concerns about Australia`s pharmacy-to-population ratio (much higher than in other Western countries) and the lack of consistency in the various financial drivers across the profession, including supplements and PBS-based drug distribution costs. With the municipality`s current pharmacy contract expiring on June 30, 2020, a new agreement is being negotiated. The Australian government pays licensed pharmacists for the provision of Pharmaceutical Benefit Scheme (PBS) drugs to patients. For Community pharmacists, the amount of remuneration is agreed between the government and the Pharmacy Guild of Australia (the Guild representing the majority of pharmacy owners) and set by pharmacy contracts for five consecutive years. Any subsequent agreement has helped to maintain the principle of equitable distribution of pharmacies throughout the country through professional controls on the location rule, which stipulates that a pharmacy should not be open within 1.5 kilometres of an existing pharmacy. Pharmacies buy drugs from wholesalers, sell them to people who bring prescriptions and are reimbursed by the government for drugs on the PBS. They are also paid for the professional advice they provide when dispensing these drugs. The first Community Pharmacy Agreement (CPA) began in 1991 and focused on optimizing the distribution of pharmaceutical services across the country. At the time, there were concerns that there would be more pharmacies in the major cities, while regional and rural Australia did not occur.
The agreement introduced a new compensation framework for pharmacies that supply PBS-based medicines and created incentives for pharmacies in rural and remote areas. It is also not uncommon for parliamentary committees to examine aspects of EU pharmacy agreements. For example, in 2015, the Joint Committee on Public Finance and Audit reviewed the aforementioned ANAO report on the fifth EU Agreement on Pharmacies. Under the legislation establishing the PBS framework, Parliament has no direct role in the adoption or approval of the agreement, with pharmacy agreements negotiated between the Minister of Health and the Guild and which take effect through a provision of the PBRT. However, Parliament may be invited to consider legislation transposing certain issues into the Community`s pharmaceutical contracts. For example, in 2015, Parliament passed the Pharmaceutical Benefits Act in 2015, which implemented 6CPA issues, such as the optional one-dollar rebate on patient supplements and the continuation of pharmacy localization rules. Patients pay a contribution to the cost of their medications to the pharmacist, who then claims to the government the difference between what they paid the wholesaler and the patient`s contribution. In the fiscal year that ended June 30, 2014, the government used $9.1 billion for PBS-listed drugs. That is exactly what that money received that was regulated by the Community Pharmacy Agreement. The agreements ensure the safety of the government and small pharmacies, which are responsible for effectively providing taxpayers with PBS-based drugs to the benefit of patients. In 1981, an independent pharmaceutical compensation tribunal (PBRT) was established to determine the remuneration of pharmacies for the dispensing of PBS-based drugs.
In 1989, the PBRT proposed amendments to reduce the pay of pharmacy owners (p. 36). This sparked a dispute between the government and the Guild over the calculation of compensation, which was settled by the signing on December 6, 1990, of the first community pharmacy agreement between the Guild and the Minister of Age, Family and Health Services.