A new Grattan Institute report says Australians are being pushed into paying more for prescription medicines because the pharmacy lobby has too much influence over how pharmacy funding and charges are set.

The report argues the Pharmacy Guild of Australia is effectively “calling the shots” through negotiations with government that Grattan says occur behind closed doors and lack transparency. It also claims current funding arrangements protect pharmacy revenue even when medicines could be cheaper for patients.

Grattan points to several specific areas affecting costs:

It says pharmacy owners are discouraged from providing discretionary discounts on some medicines. It highlights the “allowable additional patient charge,” arguing fees of that type don’t compensate for services and should be removed. It says location and entry rules for new pharmacies limit competition, which Grattan says keeps prices higher and reduces incentives to improve access.

The report recommends overhauling the current pharmacy funding model, including abolishing the Community Pharmacy Agreements by 2029. If that isn’t done, it suggests involving pharmacists and patients in future negotiations and using an independent pricing authority to set funding rates.

The Pharmacy Guild disputes the findings, saying its agreements reflect the essential role pharmacies play and support services such as vaccination programs and chronic disease support.