Frequently Asked Question - How is Pharmacy Ownership Regulated?

The key components of regulation that underpin the community pharmacy model in Australia are the Location Rules (which are Federal) and the ownership rules which are State and Territory based.
The Location Rules were previously subject to a Sunset Clause in the National Health Act which saw them expire with the end of each five-year Community Pharmacy Agreement. This sunset clause was removed from the Act last year, with bi-partisan support in the Federal Parliament.
The result is that the Location Rules that are in place, will not expire with the current Sixth Agreement in June next year, but will continue into the Seventh Community Pharmacy Agreement from 1 July next year which is currently being negotiated between the Government and the Pharmacy Guild. The Minister for Health Greg Hunt has publicly declared that the Location Rules are ‘not on the table’ in the current negotiation.
Cate’s Chemist supports the Location Rules because they are good public policy introduced by the Government to ensure a viable network for the distribution of PBS medicines where people need them. The extensive and equitable distribution of local pharmacies across Australia in 2019 is the result of the Location Rules which were introduced in 1991 to correct the concentration of pharmacies out of rural and suburban communities into regional centres, major shopping centres and CBDs. The current network is by design and not an accident of a free market.
The ownership rules at the State and Territory level have recently been reviewed and reaffirmed in inquiries in Western Australia and Queensland. Likewise, they are not - and could not - be on the table in the Seventh Agreement negotiations which are now underway.
Dr Willett, Chair RACGP QLD submitted in evidence during the recent QLD Parliamentary Pharmacy Inquiry in 2018 “Quite frankly, in general practice, we have seen corporate models roll out and a more profit-driven ethos that tends to go with that. I think clinicians being directly responsible for the way the business is conducted does lead to better outcomes and fewer conflicts of interests … probably will lead to better outcomes if pharmacists continue to control their pharmacies.”