Thursday, April 27, 2023

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New dispensing rules likely to trigger insurance changes

This week, the Australian Government announced it will implement major changes to the Pharmaceutical Benefits Scheme (PBS) starting in September. The changes will allow millions of Australians with chronic illnesses to purchase 60 days’ worth of selected medicines for the price of a single prescription. Amid the current ‘cost of living crisis’, this change is expected to save Australians more than $1.6 billion over the next four years. In parallel, the move has also been described as controversial, with major concerns raised about the impact it will have on pharmacies. This article examines some of the potential impacts of the changes for pharmacy retailers and their insurance coverage.


According to Health Minister Mark Butler, the new arrangements will be phased in over the next year and in the longer term, the changes will not impact the supply and demand of these medications. The decision to write a script for two months of medicine to be dispensed in one transaction will be made by a patient’s doctor, and the option to prescribe a one-month supply remains. Some industry stakeholders have argued the changes could lead to supply shortages and impact patient care – particularly in regional areas.  


Pharmacists have also raised concerns about the financial impact of the policy. At present, pharmacists receive a dispensing fee from the Commonwealth every time they sell medication. However, under the changes, pharmacists will be dispensing medication less frequently which could impact their earnings.


While the details and full impact of changes to the PBS remain unclear, there are some important insurance considerations for pharmacy retailers to keep in mind:

  1. Greater risk of dispensing errors

In the event that two months’ worth of medication is dispensed, and the pharmacist dispenses the wrong medication or dosage, then the customer could receive twice the amount of the incorrect medication. These errors are generally covered within a Professional Indemnity policy, however, it is important to be mindful of the greater risk, which could impact the claims history and premium.

  1. Potential changes to service offerings

To boost foot traffic and loyalty, many pharmacy retailers are integrating added health services to their businesses such as medication management, preventative health measures, screening, and support for chronic diseases. Changes to business models and service offerings may not be covered on a standard insurance policy so they should be discussed with your insurance broker to ensure adequate cover is in place.

  1. Decreases in forecasted revenue

Projected changes to your store’s revenue should be reviewed against your insurance needs. If your revenue is forecasted to decrease, then this could reduce your insurance premium.


If the outlined changes raise any concerns, we encourage you to discuss this with your insurance broker to ensure your program is fit for purpose.

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