Currently,the Commonwealth Government makes payments direct to pharmacists for supplying medicines listed on the Pharmaceutical Benefits Scheme(PBS). These payments cover:

* the cost of the medicine
* the cost to have the medicine delivered to the pharmacy by a wholesaler
* a retail mark-up to cover pharmacists costs in storing and handling medicines
* a fee for the pharmacists professional advice and services in dispensing the medicine to the patient.

A separate payment is also made by the government where a pharmacist is required to supply a PBS medicine that is classed as a dangerous drug (for example, morphine injections) or where the pharmacist is required to mix the ingredients for a PBS medicine before it can be given to the patient (for example, antibiotic mixtures for children).

Under the Third Community Pharmacy Agreement, the government also allocated $400 million for various pharmacy programs (for example, support payments for pharmacists in rural and remote areas, and payments for pharmacists to review the medicines being taken by elderly patients in nursing homes to make sure they are taking their medicines correctly).

The Fourth Agreement has made provision for a number of reviews to be undertaken during the life of the Agreement on issues impacting on community pharmacies. These reviews include: The existing Pharmaceutical Benefit Scheme (PBS) supply arrangements in the context of aged care residential facilities and private hospitals. The existing supply arrangements for drugs listed under Section 100 of the National Health Act 1953. The online collection and recording of relevant data on PBS prescriptions supplied by community pharmacy that are priced below the patient co-payment. Payment times for processing of PBS claims in the existing environment. The staged supply of PBS medicines when this is specified by the prescriber. The role of community pharmacies in drug recalls

The inquiry has based its work on patient and consumer perspectives. In other words, it has designed a proposal to benefit these groups in terms of accessibility and price. The high level of expertise, security and quality that characterises the pharmaceutical trade today is to be maintained. The inquiry has conducted international comparisons of pharmacy markets and taken into consideration their strengths and weaknesses when drawing up the proposals. Another starting point was that the state is still to be responsible for supervising and monitoring the pharmaceuticals trade and pharmacy staff.

At the end of 2006 the Government appointed an inquiry on the re-regulation of the pharmacy market. The objective was greater efficiency, improved accessibility for consumers, price pressure, and safe and appropriate use of medicinal products.The inquiry delivered its final report on the reform of the pharmacy market to the Minister for Health and Social Affairs on 8 January 2008. It contains proposals that will enable actors other than Apoteket AB to retail both prescription and non-prescription medicinal products in pharmacies. One fundamental prerequisite is that a permit must be obtained from the Medical Products Agency by anyone wishing to retail in these products and that the business has access to pharmaceutical expertise.
The inquiry also proposes that the IT infrastructure be independent of Apoteket AB so that it can be accessible to all pharmacies regardless of owner. Finally, it proposes a new pricing model for medicinal products. The report is being circulated for comment. The final date for comment was 11 April 2008.The inquiry was also required to present proposals that would allow for the sale of a limited range of non-prescription medicinal products at locations other than pharmacies.