The Federal Government should axe five-year Community Pharmacy Agreements and instead task an independent authority with setting dispensing fees based on pharmacies’ costs, the Grattan Institute says.

Its 92-page report on pharmacy funding, published this week, says that the $26 billion the current agreement delivers over five years is based on “almost no public evidence” and that the Pharmacy Guild of Australia is “calling the shots” on policy.

“It’s clear that pharmacies are receiving substantial government funding and generating substantial profits,” the report says.

“The combination of rising profits, opacity and regulatory capture warrants scrutiny.”