23 November 2018

The pharmacy industry has experienced a dramatic shift in the last decade, moving from a community based pharmaceutical dispenser to a landscape dominated by discount pharmaceutical and healthcare retailers. The King Review of Pharmacy Remuneration and Regulation (‘the King Review’) recognised parts of the community pharmacy sector are at risk.

The industry has also seen a fundamental shift away from independent ownership towards a franchised and discount model, with major players now holding 73% of notional market share1. This shift has seen major players requesting an increased presence for major industry milestones including the upcoming 7th Community Pharmacy Agreement (‘7CPA’).

The struggle for power between the traditional negotiators (Pharmacy Guild) and the prominent discounters indicates the industry will be at a crossroads when the 7CPA negotiations commence in July 2019. The resulting agreement that will come into effect in June 2020, will define the industry for the next five years.

Despite favourable conditions driving underlying demand, overall industry performance continues to be challenged by ongoing PBS regulatory reform.

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