Yahoo Finance Hidden blow for Chemist Warehouse customers in the budget
The $1 discount on medicines was axed in this week’s federal budget, meaning some Aussies will soon be paying more for their prescriptions.
Chemist Warehouse customers will be hit with higher medicine costs, thanks to a small detail included in this week’s federal budget. The pharmacy giant has blasted the move as “backward and anti-competitive” at a time when Aussies are battling a cost-of-living crisis.
The government announced the cost of medicines on the Pharmaceutical Benefits Scheme (PBS) will be frozen for one year for everyone with a Medicare card. For pensioners and concession card holders, the co-payment will be frozen for five years.
It means the price of medicine will remain at $31.60 for everyone with a Medicare card and $7.70 for pensioners and concession card holders, rather than going up with indexation.
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The budget also revealed the optional $1 discount on medicines would be phased out each year until it reaches zero.
Pharmacies have been allowed to apply this voluntary discount to government-set prices since 2016 but they have to bear the cost themselves.
However, Chemist Warehouse, which has more than 500 stores across the country, is the main pharmacy that offers the discount.
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Aussies to face ‘price increase’
A Chemist Warehouse spokesperson told Yahoo Finance patients who shopped at pharmacies with the discount would now face a “government-imposed price rise”.
“Chemist Warehouse has discounted the PBS co-payment – at no cost to the Government - for all of our customers since the optional $1 discount was introduced in 2016,” the spokesperson said.
"With the proposed gradual reduction in the allowable discount on the PBS co-payment, our pensioner and concession cardholder customers who currently enjoy the benefit of that particular discount will face a price increase for PBS medicines at our pharmacies.
"This is an anti-competitive backward step in the current cost of living crisis.”
Since the discount was introduced, the company claimed it had provided $125 million in value to its customers through offering the optional discount.
The change will only affect the $1 discount of the PBS-co-payment, Chemist Warehouse said.
"Medicines priced below the PBS co-payment for general patients ($31.60) will continue to be discounted by Chemist Warehouse," the spokesperson said.
Axing discount to ‘restore universality’
The Pharmacy Guild of Australia, the peak body representing community pharmacies, had been lobbying for the $1 discount to be scrapped. It argued this would be fairer to everyone.
"The freezing of maximum medicine co-payments via the staged application of the discretionary $1 discount will help Australians struggling with the cost of healthcare and will restore universality to the PBS,” the Guild’s national president Professor Trent Twomey said.
The Guild said the measure would give “much needed relief” for Aussies “struggling to afford their essential medicines” amid inflationary pressures and the cost-of-living crisis.
“Freezing indexation of co-payment means patients won’t have to foot more of the overall cost for their medicines come 1 January each year,” Professor Twomey said.
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