Unprecedented Attacks on PGA Post-ANAO Report

“Australian pharmacy is in a death throe whether you are an accredited consultant or a community pharmacist and the PGA has been the spectacular lobbying body that has brought us to this point.”
This is just a sample of one of the many comments currently circulating since the publication of the ANAO audit report after investigation into the management of the 5CPA.

Pharmacists collectively are bewildered at the venom being hurled at their profession from various segments of the mainstream media and are at a loss to understand why they are taking such a beating when most pharmacy proprietors are desperately trying to stay afloat.
There are not many “millionaire” pharmacist owners even if they are dealing with large numbers associated with government health programs.

It’s what is left over after the broken promises and the mismanagement of government that leaves a battered or non-existent bottom line for a pharmacy.
The fact that journalists rate at number 20 in the pecking order of a Roy Morgan scale of ethics and honesty while pharmacists rate a second place ought to be illustrative enough.
However, pharmacists must find a more efficient method of communicating their arguments to the general public to counter these attacks, and refrain themselves from knee-jerk inflammatory responses.
Where is our leadership here?

Perhaps an email newsletter response organised by PSA/PGA delivered through individual pharmacy Loyalty Club email addresses might create a critical mass response, particularly if coupled with social media campaigns.
That may be a good starting-point.

But whatever your internal pharmacy affiliation, we are all part of one family and it is time to come out swinging.
Just set aside any pharmacy politics and let us deal with the problems of a mainstream press misreporting the pharmacy profession as just one backlash problem of the moment.

Unfortunately, there are a number of agendas that are being run concurrently behind the scenes. Most of them involve highly organised groups of Medical Skeptics, and further back in the shadows, the medical profession and Global Pharma’s.
There is an unhealthy alliance here that extends to media personalities such as Janet Albrechtson  and Sue Dunlevy.
Remember also that the Murdoch press is currently in bed with the Coalition and they will traditionally strike at soft targets like pharmacy.
That they persist in writing deliberate distortions without the corrections provided by pharmacy organisations is actually a testament to a low standard of evidence they work to.
In fact, most Medical Skeptics hold this characteristic in common – demanding a distorted level of medical evidence from all others while not working to any recognised evidence level themselves.

At the root of it all?
Money and power for doctors medical academics and their associated drug companies – plus the usual government manipulation that always occurs around CPA negotiation times.
It just seems worse this time around.

Even the Consumer Health Forum (CHF) has a cadre of Medical Skeptics embedded within its organisation and i2P has previously commented on this.
That the Professional Pharmacists Association (PPA) has found support from this sector, I believe is only expedient as all the anti-PGA forces begin to merge together. This momentum is gathering.

As a long time critic of the PGA I would first like to clarify my position.
Before any political or group affiliation I regard myself first as a pharmacist health professional.
As such, any patients that I have the privilege of serving are front and centre in my work ethic.

I respect my fellow pharmacists and try to foster relationships that are collegial and ethical.

And I respect the various groups that pharmacists form up, to more clearly present their business and professional interests, under an open constitution. This includes the PGA.
I have been a past member of the PGA and participated in many of the issues facing pharmacy during the time that I was a pharmacy proprietor. I took pride in being a pharmacist and a pharmacy owner.

I have always had a passion for health delivery systems through community pharmacies and to facilitate that process I trained as a management consultant and became accredited with the Institute of Management Consultants in 1972, which was upgraded to CMC (International Level) in 1995.
I was the first accredited management consultant to service the pharmacy profession.

In the year 2000 I was beginning to observe some activities and processes within the PGA that appeared to be aggressive in nature, non-collegiate, and to me, some issues verged on the unethical.
I discussed some of these issues with PGA contacts, but the message I always received was to “butt out”.
So I decided to create an online publication called i2P (Information to Pharmacists) and openly debate the policies of the PGA and their impact on the whole of pharmacy.
I also invited other writers to participate, whether as pharmacists or whether as non-pharmacist members of the pharmaceutical industry in general.
And I set out to attract a global audience and invited respected international writers to contribute.
Today, our subscribers are 80 percent Australian, 15 percent from the US with the remainder sprinkled through New Zealand, UK, Japan, Barbados and other countries.

My objective was to have an open perspective within i2P so that anyone was free to comment, or respond in an article format if they wanted to amplify any of the issues covered.

While I have been openly a PGA critic, my objective was never to damage the PGA as the appropriate organisation to represent pharmacist proprietors, but more to modify inappropriate behaviours and direction.
What you see in i2P is what you get – there are no shadowy backers and we remain not-for-profit so as to avoid unnecessary pressure and manipulation.

And it is in this regard that I express caution in respect of opportunistic retaliation that may occur from within the pharmacy profession towards the PGA.
Yes, the mismanagement and the shadowy deals must be made to disappear, but no, don’t over-react and kill the organisation that still has political skills that will continue to serve pharmacy well, if they are appropriately harnessed and delivered ethically.
This can only occur through reform by members, but I outline an intermediate step later in this article.

The most telling aspect of the ANAO report is that most of the records of meetings and decisions surrounding the management of the 5CPA were recorded on “the back of an envelope” and that a lot of those envelopes had gone missing.
This smacks of a deliberate obfuscation of management processes and is therefore improper.
The Department of Health took most of the “hits” in this regard, and we have the spectacle of the PGA zealously sending out their troops to affirm that PGA records were “kosher”.
But I personally believe both sides were intimately involved in this shadowy process.

An analysis of the ANAO Report, as prepared by the Consumer Health Forum, is presented below:


Nine significant flaws in the Fifth Community Pharmacy Agreement disclosed in the

Australian National Audit Office report.  

The full report is at :




Report Para 23:  Limited basis for assessing extent to which 5CPA met its key objectives, a number of which “were only partially realised and there have been shortcomings in key aspects of Health’s administration…”  Para 24:  No documented evidence of authority to increase 5CPA baseline budget in forward estimates by $127 million.  Para 26:  Plan to shift financial incentives from volume-driven sale of medicines to delivery of value-adding professional services essentially  unfulfilled, price, mark-up and fee structure unchanged.  Paras 21 and 24:  Agreement states $1 billion savings but ANAO says analysis shows net estimated savings before agreement was signed were closer to $400 million.


Paras 4.33 to 4.36 and para 4.66:  Of $663million in funding specified for “patient-focused”  programs and areas of need, just 26 per cent went to popular and cost-effective patient medication management programs which struggled to meet demand,  while more than half of funding went to pharmacy accreditation focused on business and staff management and not delivery of patient-focused services.


Para 2.75:  Department stated that dozens of meetings with the Guild were conducted face to face, by email, telephone and teleconference but department said it had not kept a formal record, taken minutes or prepared agreed notes of discussions.  Para 2.76 says given significance failure to keep record was not consistent with sound practice.

Recommended that Department “improve its ability to satisfy accountability requirements and capacity to protect the interests of the Commonwealth in the event of disputes or legal action”.  


See Para 2.24: “There is no formal mechanism in place to reconcile actual expenditures on pharmacy remuneration against funding specified in the 5CPA.’’

Patients pay not only $2.2 billion in co-payments but also at least another $2.6b on PBS medicines that attract no government subsidy. 

See 2.27: This substantial element of remuneration “could usefully all have been included in the agreement to provide full transparency of total remuneration [of pharmacists]…”

Recommended that Department presents in key documents estimated government payments and patient payments for both subsidised and unsubsidised PBS and RPBS medicines.


Para 2.33: The 2% indexation rate used for 5CPA was significantly higher than that forecast by the Department of Finance.  This meant dispensing fees forecast at $7.09 instead of $6.94 a script (see Table

2.1) Para 2.34 states that total costs of dispensing fees were “overestimated” by $95 million and para 2.36 states that in late October 2014 Finance Department tells auditor “It is unclear why a 2 per cent indexation factor was used”.

Recommended that to assure basis of costings for next CPA, the Department of Health applies the relevant forecast indexation factors released by the Department of Finance.


Table 5.2 shows the Department contracted to pay the Pharmacy Guild $29.3 million to administer programs worth $67.4 million.   Paras 5.61 and 5.62 say it was a  “notable omission” that department did not tell Cabinet that it would be paying the Pharmacy Guild to administer programs and that the money would come from funding meant for professional (patient) services.   Para 5.65: Some contracts in effect before March 2014 did not clearly distinguish between payments to the Guild for its services to the department and funds used to pay recipients under 5CPA programs.

    The Department entered into contracts with the Guild totalling $300million without competitive tenders being called. See Para 5.60, and Fig 5.4 which includes comment “allows Guild to apply for funding”.
    The Department also entered into a further eight contracts concerning the Guild’s part-owned FRED IT entity, although many of these contracts were not directly related to 5CPA.

On Page 231 the Guild in its response says the audit does not make adverse findings in relation to its role in the administration of 5CPA.  Para 16 in the report summary says that the audit did NOT examine the Guild’s administration of 5CPA professional programs.  Paras 5.78 – 5.87 however show the audit did identify problematic issues in the financial arrangements with the Guild, with regard to  the government rules governing the management of public monies by non-government organisations.  The Department was unable to provide “confirmation or evidence” that the Guild had complied with these rules.


Para 23: The Department’s administration of the agreement has been “mixed” and a “limited basis” for assessing extent to which it met key objectives. 
Para 6.26 “Overall, the KPIs adopted over the period 2010-2014 for the 5CPA provide a limited basis on which to assess performance against high level 5CPA objectives, specific professional program objectives or the material components of Commonwealth expenditure such as pharmacy remuneration.”


Para 6.70 “Shortcomings in Health’s performance reporting and 5CPA evaluation framework mean that the department is not well positioned to assess whether the Commonwealth is receiving value for money from the agreement overall, or performance against its six principles and objectives.”


Point number 2 is particularly relevant for HMR pharmacists because it would appear that a significant component of the budget for patient services was diverted to pharmacy administration processes. Only 26 percent of that budget made it to HMR pharmacists.
It also appears that the funding of Medscheck was created out of the HMR budget.
The PGA has strenuously denied these allegations and proof of decision seems to have evaporated on one of those lost envelopes. But the intention in budget forward planning involving Medscheck increase and HMR decrease is open for all to see in the ANAO report.

HMR services are both popular and evidence-based and there is NO evidence for Medscheck.
Medscheck is a perfect example of the PGA utilising funding to shore up a program that was not going where they thought it would i.e. Mirixa.
Manufacturers did not support this initiative like it should have been supported and so it needed a boost.
Thus Medscheck was born.
Also consider the cost effectiveness of these programs.
ONLY HMRs and RMMRs have robust peer-reviewed evidence of reduced costs, hospitalisations and improved patient outcomes and high levels of patient satisfaction.
They are VALUE for money and not a cost.
HMR funding was just starting to become part of the stable of close collaboration with GPs when its funding was slashed and the rules were changed once again.
GPs were not informed of the rule changes and overnight a group of pharmacists, who the PGA had supported and nurtured to develop their clinical skills and engage at a professional level, had their incomes decimated.

One HMR pharmacist contacted by i2P stated:
“The impact on the profession has been substantial. Existing pharmacy students are swapping to other courses, enrolments are down, pharmacists are despairing about ability to have an income in a business environment that has suffered too many cuts.
Many of us have had to really dig deep to stay well and not go into a complete mental breakdown when the changes were announced – and some did not make it.”

The damage done to the entire profession is immense and i2P has pointed out in previous articles that PGA mismanagement has been in vogue for the past 20 years, and it accelerated around the time that the PGA was given sole management rights for pharmacy grants.
This created an imbalance of power within the pharmacy profession and created a large pool of money for PGA to consolidate its power base. It has culminated in bitterness and division never before experienced in pharmacy.

The result has been a minimal amount of funds directed for professional development and research, and a suppression of innovation and invention.
It gives me no pleasure to confirm that much of the material published by i2P has proven to be correct, and I weep tears of frustration for the decimation of a proud profession that I still hold dear.

For the PGA to remain relevant, the PGA Executive should immediately resign and have an administrator appointed to sort out all the relevant issues.
This will allow the organisation to function at arms-length to previous decision-makers, and over time, restore confidence to all pharmacy sectors.

Some of these issues include:

1. The replacement of the PGA as sole government negotiator with a representative(s) nominated by a “Council” of all pharmacy organisations, hereinafter referred to as “The Council”. This will enable the whole of pharmacy to unite under a single banner and present a single voice in negotiation.

2. A restitution of an upgraded HMR budget immediately, to prevent further decline in the “brain drain” within pharmacy.

3. A reconstitution of the Australian Association of Consultant Pharmacy (AACP) to replace the existing shareholders (PSA, PGA) with individual member shareholders, and that the PSA and PGA to be appointed to a secondary advisory board in a non-voting capacity (and be joined by other appointee organisations).

4. That “The Council” be appointed by the Department of Health to receive and manage all pharmacy grant funds, and that the commissions received be allocated to the administration of “The Council”.

Some members of the PGA executive (state and federal) who “punch politically well above their weight” will be disappointed by the outcome that has arisen from the collective behaviours of current and previous executive members.
Once rationalising their disappointment, they should make themselves available to assist PGA members in appointing an administrator.
Once through its period of administration, the administrator will be able to thoughtfully manage a new election for a new executive.

Only the appointment of an administrator can prevent the deterioration of the esteem once held by the PGA.
There are many positives from the past, but there is a dark cloud overhead at the moment.

You see organisations such as local councils having to undergo periods of administration when they get themselves into difficulties.
They always emerge stronger and more confident organisations after the administration process.

The profession of pharmacy needs a peaceful and stable period to reorganise itself and fulfill the destiny of which it is capable, and a profession that all of its practitioners can be universally proud.

Currently, that requires a dose of castor oil, as a form of purgative to remove the obstructions.

Leave a Reply

Your email address will not be published. Required fields are marked *