AusDoc investigation: The Pharmacy Guild, its lobbyists and its money

An insider's guide into how the guild protects the interests of its members

Back in the mid 90s one of medicine’s own, the former doctor-cum-politician Dr Michael Wooldridge was dumped as deputy leader of the Liberal Party of Australia.

The day after a very public humiliation came a deafening silence: he says the phones stopped ringing, the daily hassles ceased, the lobbyists, the media, even his political colleagues lost interest in someone stripped of power.

He got one call — it was from the Pharmacy Guild of Australia offering commiserations and promising to stay in touch.

Within a couple of years, Dr Wooldridge’s political star had risen once more. He was appointed federal minister for health.

Later, looking back on what happened, he said the guild’s "kindness" in his hour of darkness was something he did not forget.

Cash for access

This article has been written to explain how the guild works to protect the interests of its members — something it has done well for a long time.

And to be clear up front, this is not a shock-horror expose of dirty dealing or brown paper envelopes, although beyond simple acts of kindness it does involve smoke-filled rooms and a lot of money.

Let’s follow the money.

In the latest Australian Electoral Commission figures on donations to the main parties, the guild was right up there among the big players.

In terms of dollars it was ranked sixth, ahead of ANZ, the Australian Hotels Association and Wesfarmers and hundreds of others, handing over $295,000 during the previous financial year, a slice of the $1.7 million it has invested in the last five years.

This is not money for nothing. As the guild itself acknowledges, it is to secure (or ‘buy’ if you want to avoid euphemisms) political access.

It usually means signing up to various 'business clubs' run at both state and federal levels by the main parties through which interest groups, corporate businesses and individuals get to meet and greet those wielding power.

At a federal level the guild is a member of the Federal Labor Business Exchange.

Membership is not cheap, with the platinum option costing $110,000 a year, gold some $55,000 and silver around $25,000.

The ALP does not generally advertise this forum, does not disclose (at least to the public) what memberships buys and there are many who describe it as an affront to an open society.

The guild is not an outlier. Medibank, Medicines Australia, nib Health Funds and Healius are just a few of the health players signed up along with a list of corporates from the mining and drinks industries to the big name consultancy firms seeking profit from government contracts.

“The important thing about the business exchange is that you can get access to the shadow ministry,” a veteran Canberra lobbyist explains.

“There are various events that you can attend. But the main one is a form of speed dating. The invitations for the event go out from the party and in response you will put in a bid to meet say the shadow education minister or the shadow health minister.

“You put down half a dozen names and the organisers will come back with a program.

“So, during the event, which usually runs at a posh hotel conference suite, you'll have a 10-minute meeting with a shadow education minister, then a little while later, you'll have a 10-minute meeting with the shadow health minister, or whatever.

“And they're quite strictly timed so that you get [the] maximum … And generally, it's just a conversation.

“But if you've got a bee in your bonnet about a particular policy matter, you'll say, ‘Hi, we want to talk to you about, say, pharmacist scope of practice and here's why we think it's a good thing, and here's why we think if you get into government, you should be doing this’.

“And they will say, thanks very much. And then, 10 minutes later, you move on. It's a bit like an old-fashioned barn dance.”


The guild’s access to Liberal Party bigwigs is a little different. It is also not so instant because the party is in government, it can play harder to get, but the same principles apply — cash for access.

The Liberal Party's main group is the Australian Business Network, a big money spinner which offers similar membership packages to Labor and at similar cost, but again it's an outfit existing in the shadows, where who gets what for their dollars is far from clear.

The guild has publicly denied being part of the network. But it does have financial ties to the party because it is signed up to something called the Tasmanian Leaders’ Forum run by its Tasmanian branch. 

This sounds low key and small scale, but it is still about access to federal ministers rather than the MP for Braddon.

“On parliamentary sitting nights in Canberra — Tuesday, Wednesday, Thursday — there'll be a dinner with a federal minister hosted by a Tasmanian MP for about 15 or 20 business groups," the Canberra lobbyist explains.

“You go along to those dinners and it goes around the room, everyone says who they are and what they do, and has one minute to discuss a pressing issue.

"And then the minister says a few words about the political landscape and a few things, and everyone has a nice glass of Pinot and off they go.

“You don't pay for the dinner but you do pay a subscription to the Tasmanian branch of the Liberal Party.”

AusDoc has no details of the guild’s use of this forum.

We do not know if it has used the forum to connect with federal Minister for Health Greg Hunt, for instance.

But it would, in theory, get semi-regular access to Liberal Party influencers, the likes of Josh Frydenberg before he became treasurer or Senator Richard Colbeck, the current minister for aged care.

The issue here is about what these interactions are about.

“Some people come away from these things and say, well it doesn’t seem worth it," says the man in Canberra.

"The truth is, if you've really got something you want to discuss, some policy issues, some grievance, you don't want to discuss it in front of everyone else who shows up. But it is about showing your face and being seen.

“You're there, it's all very civil and convivial and you're not meant to get down into the nitty gritty of an issue because, A, it's boring for the others and, B, you're not speaking privately.”

Is this something that general practice exploits?

The AMA says lobbying through donations is what you do when you have no good arguments. So, it does not make political donations.

The RACGP does not make donations either despite its vast resources, because it is a registered charity and could end up in trouble with the Australian Charities and Not-for-profits Commission.

It is also worth stressing here the obvious point — that the GP groups get access anyway. When Dr Karen Price became president of the RACGP, Mr Hunt rang her, offered his congratulations and urged her to contact him whenever.

The timing of the return calls are no doubt dependent on the importance of the issue at hand. But over the last two years, they've happened quickly given the importance of doctors supporting, and being seen to support, the government's pandemic response. 

And the national guild president Professor Trent Twomey, who it's interesting to note had a former life as campaign manager for Liberal Party Federal MP Warren Entsch, would also have the minister’s business cards.

Trent Twomey
Professor Trent Twomey.

The guild and the AMA were apparently the first calls Mr Hunt made after he was appointed minister for health.

But the value of the engagement outside these more formal channels is basic psychology.

“Through these business events and meetings, you can get chummy … you’ve had wines together and the rest of it.

“But look, it's hard to put a value on it. And let’s be clear, some ministers, politicians, don’t look particularly pleased to be there at these meet-and-greet functions. And they may not have any value.

“But I suspect the guild and quite a few other organisations clearly think it does. And $25,000 on the Labor Party is not a huge amount of money for some of the companies that play the game.”

The personal touch

The other means employed by the guild to connect with those in power are the guns for hire, the private lobby firms.

There are dozens of them. The big names that get mentioned in the context of the guild are Barton Deakin Government Relations, a company called C|T Group and Hawker Britton.

Their employment can cause resentments. Both the guild and the AMA, which has also used lobby firms to further its cause, have experienced and respected in-house public relations staff.

Why opt to outsource to a lobby firm whose fees can easily hit $120,000 a month? Again, it is about the personal touch.

“What you buy from these companies is direct influence,” says a former political staffer and health lobbyist.

“The best ones have a long and direct personal relationship with ministers and their staff.

“For instance, Grahame Morris, [the chairman of Barton Deakin] has been part of the Liberal Party inner circle for more than 30 years. He was chief of staff to John Howard.

“Simon Banks [managing director at Hawker Britton] has been in the inner sanctum of the Labor Party for about the same time. Again, he has been a chief of staff to Kevin Rudd.

“The people hired by the firms are usually former party hacks who have known the politicians who are now ministers since they first entered parliament. Some of them would have campaigned for them.

“Those sorts of friendships guarantee you access and that is what the lobby firms sell.

“It’s easier for them to get into the minister’s office and present your arguments.

“But I’d still stress whether you get an outcome is dependent on how good the policy is; its costs and the wider politics. It’s not about looking after old mates.”

Of all the state and territories, it is only Queensland where you get insight (at least some insight) into what is (sort of) going on with these firms.

The Queensland Integrity Commissioner runs a lobbyist register which each year lists the contacts between these firms and the state's politicians and officials.

The guild has been active in this space and it is Hawker Britton, with its strong Labor contacts, who has been busiest on its behalf.

According to the register, Hawker Britton lobbyists working for the guild met Queensland government officials 81 times between August 2020 and February this year.

They include meetings with the senior advisors working for the premier and the attorney general.

PGA with liberals
Signing the 7th Community Pharmacy Agreement. Guild president George Tambassis with Scott Morrison and Greg Hunt. Source: PGA

But there were also 24 meetings with Hawker Britton and senior officials in the office of Yvette D’Ath, the Queensland minister for health whose department is responsible for the north Queensland pharmacy diagnosing, prescribing and dispensing trial.

This is where the transparency in the register ends. It offers no details on what was discussed. Under the reasons for these meetings it says no more than “an introduction” “commercial in confidence”, “development or government policy” and “other”.

However, the dates are worth tracking. The register for instance records a sudden flurry of activity by Hawker Britton from the start of February this year.

They made contact with the office of Queensland Health's director general on February 2, then a few days later they contact one of Annastacia Palaszczuk's senior policy advisors as well as a senior official in Ms D’Ath’s office.

Then on February 18, the register records 17 contacts between Hawker Britton and the electorate offices of Queensland MPs, including the MPs for Whitsundays, Mackay, Mulgrave, Cairns, Burdekin, Hinchinbrook, Mundingburra, Thuringowa and Townsville.

After this, Hawker Britton meets with the executive officer of the Department of the Premier and Cabinet and then two days later with Ms Palaszczuk's chief of staff.

Why?

It's because the north Queensland pharmacy prescribing trial has just become front page news in the state.

CourierMail Cover

 

The media was reporting that doctors had walked off Queensland Health's expert advisory committee warnings of major risks to patient safety.

The whole thing -  a product of an 2020 pre-election deal between the guild and the state government - was beginning to wobble.

The electorate offices targeted by Hawker Britton were based in the north Queensland regions where the trial will run.

We contacted the guild’s Queensland branch last week to explain.

"Hawker Britton distributed an invitation for the MPs to attend a briefing on the status of the [pilot], which was precipitated by the mistruths and falsehoods of recent commentary from the RACGP and AMA Queensland," its spokesman said.

"As an example, the RACGP deliberately stated, for their own purposes, not patient safety, that community pharmacists would be treating ‘heart disease’ in the pilot – nothing could be further from the truth.

"BTW, cardiologists should treat heart disease, not GPs."

The guild said it would normally get one of its employees rather than Hawker Britton to send out the invites but they happened to be on leave at the time.

It added: "The guild has a long standing multi-year relationship with Hawker Britton, as they assist the guild when required and provide us with a different point of view from our own on a vast array of issues."

The slush fund 

While this response suggests the guild should not be licensed to advise MPs about heart disease and its management, it does raise a question.

Where does the guild get the cash to do all this stuff? Its membership fees only go so far. And Hawker Britton is not cheap.

There are about 4500 full members of the guild. There is also associate guild membership on offer for those pharmacists yet to acquire a pharmacy.

But in terms of money, the fees generated don't amount to much ($3.97 million in total in the last financial year) for an organisation that costs more than $30 million a year to run.

Of the alternative revenue streams for the guild, two are worth mentioning.

The first is jellybeans, the bags of Glucojel lollies branded with the guild logo sold at the front counter of virtually every pharmacy in Australia.

It is done through the guild’s Gold Cross subsidiary which markets the lollies and also offers formal endorsement — presumably at a cost — of various pharmacy products.

This commercial arm generates about $1.3 million a year in cash inflows for the guild.

The second revenue stream comes from a bigger cash cow.

“The best thing that anyone ever did for the guild was [done by] one of the presidents back in the late 60s I think," says the veteran Canberra lobbyist.

“Some genius national president said, ‘You know what, all of our pharmacies pay a shitload to insurance companies for insurance. Why don’t we have our own insurance company?’

“And so they did. They set up Guild Insurance. It is very well run and it’s very successful, an insurance business that covers pharmacies, and some other professional groups such as physiotherapists, dentists, and even the childcare industry.”

In 2020, the business generated $3.2 million in cash inflows for the guild.

It is this money which helps pay for the guild's National Fighting Fund (the capital letters are not a typographical error, that's its official name).

Set up after a referendum among members in 2002, it sits at the heart of the guild’s lobbying efforts. Its sole purpose is to pay for “special endeavours required to preserve and protect the long-term interests of members”.

As of June 2020, it held $1.8 million in cash. Historically, the sums have hovered far higher, between $3 million and $4 million. Spending under the direct control of the guild’s executive committee.

It is this slush fund which covers the cost of the political donations, the party membership fees, the lobby firms, the full-page adverts in national newspapers (up to $92,000 in The Australian), and the running of its public campaigns.

The guild and people power

One criticism you hear of GPs is that the grassroots are useless at collective action. Yes, they deliver 120 million consults a year. In terms of pure footfall, 90% of the population walk through the doors of a GP surgery at least once during the year.

As the former political staffer and health lobbyist put it to AusDoc: “Getting GPs to put posters up in the clinic is hard work, unless they are nice glossy ones that turn up in the mail.

"You can generate colour copies and ask practices to print them out but even if they do that, they don’t look good.

“That's why in any [practice] you see the health department posters instead and not anything about the crippling effects of bulk-billing. And that's why Norman Swan’s TV channel is always playing in the waiting room.

"But you've got to spend money — big money — to get it in there.”

Are pharmacist owners different?

Annoy the guild, and politicians are meant to fear the mass campaign. Is this reason why governments are rendered compliant?

A decade ago, the guild ran one of its biggest campaigns against any federal government.

It's origins lay back in the days when Tony Abbott was minister for health. His department realised that pharmacist owners were making substantial profits as a large number of big name drugs came off patent and generics flooded into the market.

But governments were still paying a fixed price to pharmacist owners to secure and dispense PBS medications they were now getting much cheaper.

So Mr Abbott attempted to "harvest a share" of the profits generated by introducing a price disclosure policy so government payments could be adjusted more quickly to better reflect the cost.

When the Gillard/Rudd government attempted to tighten the policy a few years later, the guild claimed (in the face of much ridicule from the consumer groups) that the future of 1000 pharmacies was on the line.

These were not windfall profits, the guild said, they were better understood as “trading terms income”. 

If patients had looked at the issue in detail, it must have made their brains bleed given the technicalities, but some would have realised that maybe the government was acting in their interest.

Nevertheless, the guild managed to secure 1.2 million signatures in protest — and this was in the days before petitions ran on social media in a click-share-and-go format.

The petition was presented to parliament in February 2014. There were publicity shots with the petition inside 22 boxes sat on the back of a ute.

When AusDoc interviewed people for this article, many referred to this campaign as the example of the guild’s abilities to influence pollies. But most forgot the twist.

It achieved nothing. The changes went ahead as planned - and notably no pharmacies seemed to shut their doors as a result.

Another example is the guild’s more recent fight against the TGA move to up-schedule 150 codeine-based products being sold in pharmacies to curtail harms. 

Again, a campaign was launched.

Up-scheduling was unnecessary, the guild argued, the evidence was mixed on the safety of allowing GPs to write the scripts and some patients would be in pain unnecessarily if they could not obtain the opioids at their pharmacy.

And anyway, stronger audit trails through pharmacists could be employed to protect patients from harm.

The warnings were issued, the minister lobbied. There were attempts to get the states to sidestep the rules by changing poison legislation and allow pharmacists to prescribe the products themselves as S4s. 

Mr Hunt did not budge. He said no. And so did the states.

The guild’s influence does have limits.

“What you also have to understand about pharmacists is it's like training cats to get them all to do the same thing,” the Canberra lobbyist says.

“They're owned by individuals and groups of individuals, they're under different banner groups.

“But fundamentally they're not longing to grab their patients or their customers when they come in and say, ‘Hey, let me bash your ear about politics for a minute.’

“That's not good business. So as a mechanism to get your way, the guild’s powers are kind of exaggerated.”

Maybe that is true.

But it is also true that the guild has secured for its members commercial and legal protections from government unheard of in the retail sector — the locations rules, the ban on non-pharmacist owners, the laws preventing competition by the supermarket giants

And if the guild’s ability to arouse the masses is more myth than reality, it can be no less powerful as myth — as long as the pollies believe it.

The Community Pharmacy Agreement is both symbol and reality of this power.

It is signed and sealed in political darkness behind closed doors with ministers and their health department officials sitting across the table from the guild, with the Pharmaceutical Society of Australia, the lobby group for pharmacists, rather than their employers, only recently allowed in.

Both the process and outcome have been savaged over the years by doctors, consumers, the health policy wonks at the Grattan Institute, by the Australian National Audit Office in a particularly damning report from 2015, and by the government-commissioned King Review.

Yet governments of every colour are reluctant to ruffle the financial comforts it offers, at mammoth cost to taxpayers.

PGA
MP Michael McCormack (2nd from left) in a Pharmacy Guild tie with NSW guild president David Heffernan (left), formal national guild president George Tambassis (right) and current national president Professor Trent Twomey (far right). Source: Facebook

Another, smaller, case study of the guild's influence was the government’s brief flirtations with 60 day dispensing for patients on low-risk medications long term.

A formal recommendation by the PBAC back in 2018, it would have covered 143 drugs including the big spinners for pharmacies — statins and antihypertensives.

Based on an "assessment of clinical safety and ongoing cost-effectiveness", the PBAC said the change would "allow clinicians to exercise greater choice and provide patients both financial and convenience benefits".

The guild said it was worried patients would be at risk. Some said it was more worried about the loss of dispensing fees and the reduced consumer footfall.

With widespread public backing for the reforms, it was expected to be in the seventh community pharmacy agreement, but in 2020 when the agreement was inked, it had vanished.

“That victory for the guild was one they got by absolutely head butting the government, including the minister," says the Canberra lobbyist.

“The guild leadership moved because it was literally halving the remuneration for dispensing chronic, high-volume medicine.

“It was taken off the table to never revisit the table.”

The guild, according to The Herald Sun last week, had apparently been so enraged by the 60 day dispensing threat, it donated $250,000 to the Victorian branch of the ALP and asked it be used to fund a campaign against Mr Hunt in his Fliinders electorate during the 2019 Federal election.

The guild denied the claim.

The adaptive species

Regardless of your view, it is worth stressing that the guild operates in an ecosystem not of its own making.

It exploits, like any adaptive species, vulnerabilities; in this case the vulnerabilities of politicians and their parties, their desperation for money to fund their interests, their own fight for electoral survival and, with that, their fears of public and media criticism.

Politicians, it is important to say, want to fix stuff too — the hard moral endpoint to justify their existence. The guild's interventions and support when the COVID-19 vaccine rollout hit trouble last year helped Mr Hunt (and Australia) through a potential crisis.

Does the efficacy of the guild’s methods mean it will succeed in its push to radically expand pharmacists’ practice scope? 

The north Queensland trial — at least in the form that was being discussed behind closed doors last year — seems bonkers in its ambition.

Pharmacists, with limited training in the complexities of differential diagnosis, diagnosing and managing 23 medical conditions with inbuilt financial incentives to prescribe and dispense S4 medications?

As we have written before, it dismantles some of the fundamental principles of safe patient care.

While the final form of the pilot, if it does go ahead, may be far more modest than the plan revealed in AusDoc back in January, the guild has shown that you can influence state governments, convince them that you can offer a fix to some perceived problem, while regulators tasked with protecting public safety — the TGA in particular — can be ignored.

As the codeine saga showed, the guild has identified the soft underbelly of the system. Pharmacy prescribing of S4 drugs only needs tweaks to a state’s poison legislation and those tweaks are in the hands of the pollies rather than the regulators.

The limits on the guild lie elsewhere.

It's whether the pharmacists as a profession believe diagnosing and prescribing is safe, and if they believe it is, then its the calculations by pharmacy indemnity providers to determine whether their business will sink should things start going wrong.

And perhaps it will be this — the potential crippling of the guild’s cash cow, Guild Insurance — that will curtail what many believe would be a reckless experiment in patient care.


Paul Smith is Australian Doctor's editor. Additional reporting by Geir O'Rourke and Antony Scholefield.

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