My pharmacy is the only health service in my town. Won't this reform close it?

This is the most important tension in the Grattan report. The proposal is not to close community pharmacies — it is to change the funding model, remove anti-competitive location rules, and allow pharmacists to also practise within GP clinics. In rural and remote areas, community pharmacies often provide the only accessible health touchpoint, and any reform that destabilises that access would make the problem worse. The Grattan report argues that removing location restrictions would actually increase pharmacy presence in underserved areas by enabling pharmacies to open wherever there is genuine demand — but that claim requires careful evidence-testing before rural patients should feel reassured about it.

What is the Community Pharmacy Agreement, and when does it change?

The Community Pharmacy Agreement (CPA) is a multiyear funding deal negotiated between the federal government and the Pharmacy Guild of Australia. It sets dispensing fees, patient co-payments, and pharmacy location rules. Unlike most other health funding decisions in Australia, CPA negotiations have historically occurred without public evidence requirements or independent cost review. The current agreement expires in mid-2029 — that date matters because it is the practical window for structural reform, when the government has leverage to change the terms and demand transparency.

Pharmacy reform: why the current model isn't working for patients

What just happened

The Grattan Institute released a major pharmacy policy report this week, and the language from the researchers is unusually direct. Authors Peter Breadon, Mia Jessurun, and Molly Chapman write that pharmacy policy in Australia has been “weaponised” by the Pharmacy Guild against patient interests, and that the system “is too important to be controlled by a powerful lobby.”

The report, “Future pharmacy: A better deal for patients and taxpayers”, argues that community pharmacy funding in Australia is unlike almost any other sector of public health: the terms are set through opaque negotiations between the federal government and the Guild, without the public evidence requirements applied to hospital, imaging, or general practice funding decisions. The Guild has donated $2.5 million to political parties over the past five years. In the same period, member profits have more than doubled in real terms — even as dispensing automation has reduced the labour required to perform the core service.

RACGP President Dr Michael Wright has endorsed the report’s findings, saying the evidence supports healthcare professionals working together as a coordinated team, and that “lobbyist-led healthcare” is not the same as evidence-based or patient-centred care.

The both-and

The governance critique is well-founded

The argument that pharmacy funding lacks public-evidence transparency is not contested by serious health economists. Australians visit community pharmacies an average of 18 times per year — more than any other health service type — yet the funding that underpins those visits is set in a process that would not satisfy independent cost scrutiny if applied to hospitals, pathology, or imaging.

The Grattan team recommends three linked changes: replacing the negotiated funding model with an independent pricing authority based on actual cost data; reinstating and expanding the $1 discount option for patient co-payments on mid-range medications; and embedding pharmacists inside general practices rather than maintaining the current retail separation.

That third proposal is the most clinically significant. A pharmacist working within a general practice can review a patient’s medication list with full access to their medical history, in the same building as the GP prescribing those medications. This is different — clinically and practically — from a brief conversation across a dispensary counter, where the pharmacist may have access to dispensing records from one pharmacy but not to the patient’s full clinical picture. The UK and Canadian models for GP-integrated pharmacists have produced measurable improvements in medication safety and reductions in low-value or duplicate prescribing. The evidence base for this model is stronger than for most of the expanded pharmacy services currently being rolled out across Australian states.

The access risk in rural and regional areas is real

The Guild’s counter-argument is not entirely wrong. Community pharmacies — particularly in rural, regional, and outer-suburban areas — function as genuine health service anchors. They are often the first point of contact for minor illness, the most accessible source of health literacy for people who cannot easily see a GP within a reasonable wait time, and the practical infrastructure through which complex medication regimens are currently managed for older and frail patients.

Any reform that disrupts community pharmacy funding without credibly replacing those functions risks worsening access for exactly the communities who can least afford reduced access. The Grattan report argues that removing pharmacy location rules would allow pharmacies to open wherever there is genuine demand — but this relies on a market-response assumption that deserves scrutiny in remote and very-low-income areas where the commercial case for opening a pharmacy may not exist even without location restrictions.

It is also worth noting the internal consistency issue in the current situation: only one expanded pharmacy service — uncomplicated urinary tract infection prescribing — has, according to the Grattan report, accumulated sufficient cost-effectiveness evidence for confident national rollout. The critique of Guild influence on funding operates, correctly, on an evidence standard. The same standard should be applied uniformly — including to clinical scope expansions proposed as alternatives to GP care.

The 2029 window

The current Community Pharmacy Agreement expires in mid-2029. This is the practical moment for structural reform — the point at which the government has maximum leverage to change the funding model, require public evidence, and negotiate genuinely different terms. What happens between now and that renegotiation — which parties commit to transparency requirements, which resist them — will tell patients a great deal about whose interests the health system is structured to serve.

The Grattan report’s publication now, three years before expiry, is deliberate timing. It allows the arguments to be tested, the counter-arguments to be made, and the evidence base to be assembled before the negotiation table opens.

My two cents

For a patient trying to understand what this means in practical terms today: not much has changed yet. Your pharmacy is open, your medications are dispensed, and your community pharmacist is trained and providing genuine care.

What the Grattan report is really describing is a structural problem that has compounded across multiple Agreement cycles — a governance gap that neither major party has addressed because the Pharmacy Guild is a skilled political operator with a strong community presence and a consistent donation strategy.

If the proposal for GP-integrated pharmacists gains traction, the most direct benefit for patients would be medication reviews that happen in full clinical context — particularly for people on five or more medications, people managing complex conditions across multiple prescribers, and older patients where medication errors carry the highest risk. That is a real clinical improvement, not a theoretical one.

The 2029 renegotiation is worth watching.

Verdict: yes — worth knowing about.

Sources cited

RACGP newsGP — ‘Held hostage’: Grattan Institute calls for pharmacy overhaul. https://www1.racgp.org.au/newsgp/professional/held-hostage-grattan-institute-calls-for-pharmacy
The Conversation — Unfair fees and low competition: why the pharmacy sector needs a shake up (July 2026). https://theconversation.com/unfair-fees-and-low-competition-why-the-pharmacy-sector-needs-a-shake-up-287074