Pharmacy Guild: Review of PBS deal with Government raises concerns of how money was spent

Updated

Serious concerns have been raised about how millions of dollars of taxpayers' money has been spent by the Pharmacy Guild of Australia.

The guild receives the money as part of its $15 billion agreement with the Federal Government to dispense medications on the Pharmaceutical Benefits Scheme (PBS).

An independent audit of the deal outlined irregularities in how some of the funds were spent and how the agreement was managed by the Health Department.

Health advocates have called for a full and open inquiry, describing it as a "widespread and significant failure".

The report from the Australian National Audit office found:

$5.8 million given by the Government to the guild for professional development of pharmacists was instead funnelled into a public relations "communications strategy" without approval from the health minister;

Most of the $7.3 million of government funds meant to be paid to pharmacists to encourage electronic prescribing was instead reallocated to "fund other activities". The Health Department could not provide evidence to prove the health minister had been consulted;

The Health Department did not keep any formal record of meetings with the guild.

Since 1990, the Federal Government has funded five-year agreements to help maintain a national network of 5,460 pharmacies as a way of dispensing medicines on the PBS.

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The current agreement is about to expire and Health Minister Sussan Ley has held meetings with pharmacy representatives, the Health Department and patient groups on the next agreement.

A spokesman for Ms Ley said the Government was taking a close look at the report and its findings.

The Consumers Health Forum (CHF) said the audit raised serious concerns about how effectively the Health Department managed the current agreement.

"The audit of the fifth pharmacy agreement shows a disturbing laxity in what is a vitally important and costly scheme involving the dispensing of prescriptions," CHF chief executive Adam Stankevicius said.

The review found there were persistent shortcomings in departmental record-keeping relating to the pharmacy agreement.

"[The Department of] Health did not keep a formal record of its meetings with the Pharmacy Guild during negotiations of the agreement and did not document its subsequent discussions with the guild on the negotiation of related contract," the audit found.

"Given the significance of the issues under negotiation, the decision not to prepare an official record of discussion is not consistent with sound practice."

'Scandalous' agreement between Government, PBS

The audit also highlighted that the Health Department did not develop a risk management plan or ensure that conflict of interest declarations for members of its negotiation team were completed.

Greens health spokesman Richard di Natale said it was "scandalous" that taxpayers' money was being allocated on a handshake agreement.

"It fails by any standard of governance," he said.

"There is no transparency, no formal processes in place. It's actions like these that leave governments open to corruption."

In its response, the Health Department acknowledged "there is scope to realise further improvement in the effective and efficient administration of these agreements".

A spokesman for the Pharmacy Guild said it welcomed the audit.

"The guild welcomes the fact that the audit does not make any adverse findings in relation to its role in the administration of the agreement," the spokesman said.

The CHF said it beggared belief a program of such financial significance and health importance had been beset by such fundamental administrative deficiencies.

"We call on the Federal Parliament's powerful Joint Committee of Public Accounts and Audit to conduct a full and public inquiry into this report and its critical findings," Mr Stankevicius said.

"The inquiry must get to the bottom of why the two biggest components of the pharmacy agreement — the remuneration to pharmacists [totalling $13.8 billion] and the [$950 million] CSO payments to wholesalers — have not been fully reviewed for over 25 years."

The Health Department said it had implemented a range of improvements identified in the report.

Topics: health-administration, health-policy, federal-government, federal-parliament, australia

First posted