Australians are being "ripped off" when it comes to prescription medication, according to the nation's former top regulator.
Graeme Samuel, the former Australian Competition and Consumer Commission chief, believes agreements between the federal government and the Pharmacy Guild of Australia are hampering competition and costing consumers more for prescription drugs.
Professor Samuel's comments come as Health Minister Greg Hunt is negotiating a new five-year agreement with the "powerful" Pharmacy Guild and as a new survey - released by the discount chain Chemist Warehouse - shows that 55 per cent respondents had previously delayed buying medication for financial reasons and 57 per cent had travelled to another town to visit a pharmacy to access cheaper prices.
"If you're in a town and you have one supermarket, one service station or one coffee shop, let's just assume the coffee shop charges $8 for a cup of coffee and the petrol station charges you $2.50 for a litre of petrol and the supermarket charged you $4 for a litre of milk, you'd be pretty angry," he said.
"Fortunately, we don't have that situation, but what we do have is agreement between the Pharmacy Guild - which is the union for a selected group of pharmacists - and the federal government, which says there shall be only one pharmacy in regional towns."
In larger towns and cities, like Wagga, a pharmacy cannot be located within one-and-a-half kilometres of another one, which Professor Samuel said was to try to stop competition.
"What happens is that those who live in small regional towns then have to - if they want to get cheaper prices - have to travel maybe 30 or 40 kilometres to another town to be able to buy them more cheaply, or alternatively what they are doing is that they are now learning the ability to go on line," he said.
Professor Samuel believes that in the same way the taxi industry has had to deal with the arrival of ride-sharing services like Uber, pharmacy regulations will ultimately be relaxed.
He said the pharmacy industry was one of a handful exempted from a massive overhaul - led by then-Prime Minister Paul Keating - of what were then deemed to be anti-competitive agreements, and had continued to be exempted since then.
"We have to remember that the Pharmacy Guild is a very, very powerful union," he said.
An unexpected illness can have a devastating effect on the budget of someone with a limited income, according to a Wagga welfare advocate.
Peter Burgess, diocesan president of the Wagga Central Council of St Vincent de Paul, said medication was "very much" an issue that people were often forced to make tough choices about.
What happens is that those who live in small regional towns then have to - if they want to get cheaper prices - have to travel maybe 30 or 40 kilometres to another town to be able to buy them more cheaply, or alternatively what they are doing is that they are now learning the ability to go on line.Professor Graeme Samuel
He said unexpected illness was more often a concern, but the cost of regular medication was also often a problem, particularly if a prescription was expensive.
Mr Burgess has seen clients electing to forego their own medications to meet other expenses, especially if they had children.
"They do put their kids first, as most parents do, and when you do that, you run yourself down," he said."You try to tell them 'you have to look after yourself, because who's going to look after these kids if you don't,', but they do make those sacrifices.
"Sudden illness can strike all of us. If you put it off, it can get worse."They're living week-to-week, so they might be able to save for things like rego of the car, but unexpected things just catch them out."
Mr Burgess said St Vincent de Paul could, in some circumstances, help clients with the cost of prescriptions or to seek medical treatment.
"It's hard enough living on Newstart, or something like that, but it's a lot harder when something unexpected comes and you just didn't have the resources," he said.
"People come in looking for support with the electricity bill and we sit down and talk with them.
"They might have paid only, say, $200 of the $300 bill, so they're already a little bit behind.
"They buy school uniforms for the kids or other things and then the next bill comes and it's a little bit bigger because it's winter. Then they're in a hole, and then the kid gets sick and needs prescription medicine and it's 'how do I do this?'."
Mr Burgess said illness and the price of medication was often a hidden issue in talking about the cost of living.
High cost of care
Wagga residents could be paying up to four times the price for common prescription and over-the-counter medications compared to metropolitan consumers, according to the recent study.
According to a survey of regional NSW residents, compiled for discount chain Chemist Warehouse, 55 per centof respondents had previously delayed buying medication for financial reasons, while 57 per cent of respondents travelled to another town to visit a pharmacy. Of these, more than 44 per cent drove more than 50 kilometres to visit an alternate pharmacy, with price being the key factor.
Discount pharmacy chains, like Chemist Warehouse, argue that a deregulated pharmacy market would allow competition to bring down medicine costs.
The Pharmacy Guild of Australia has previously campaigned to retain the status quo and continues to defend the current agreement in place with the government.
It argues that for almost 30 years, the so-called location rules "have ensured a well-distributed network of community pharmacies supplying PBS medicines and patient services" and prevented the "clustering" of pharmacies in higher socio-economic areas at the expense of less lucrative areas or more isolated regional communities.
National guild president George Tambassis said: "The location rules have played an important and beneficial part in sustaining the effective network of community pharmacies in Australia - a network which benefits patients wherever they live."