Pharmaceutical Benefits Scheme reforms are affecting the industry's operating conditions, as price disclosure progressively cuts the cost of PBS medicines.
Melbourne, Australia (PRWEB) July 05, 2014
Pharmacies in Australia play an important role in providing community primary health care. The nation's 5,250 community pharmacies provide services such as medication management information, advice on minor ailments and preventative-care services. They are also the primary distribution points for prescription and scheduled OTC medicine and will dispense over 290 million prescriptions in 2014-15. The industry has gradually undergone several changes over the past few years, due to considerable changes taking place in the general pharmaceuticals sector. According to IBISWorld industry analyst Arna Richardson, “growing regulatory and competitive pressures from new internal and external forces, such as big-box pharmacies and supermarkets, are changing the industry's operating landscape.” Ongoing Pharmaceutical Benefits Scheme (PBS) reforms are also affecting the industry's operating conditions, as the move towards price disclosure progressively cuts the cost of PBS medicines.
No significant growth was recorded over the past five years. Industry revenue is estimated to grow at an annualised 0.1% over the five years through 2014-15, to total $11.9 billion. Revenue is down 2.0% from the previous year as the changing operating environment continues to take its toll. Over the next five years, a rising number of converging variables will combine to create a perfect storm for the pharmacy sector. These include intensifying competitive pressures, the continued loss of market share to external forces, falling prices due to price disclosure and discounting, the passing patent cliff, tighter trading terms implemented by upstream wholesalers and rising rents and occupancy costs. “The industry's competitive landscape will become increasingly polarised between pharmacies offering full services and health advice and discount pharmacies competing on the basis of price,” says Richardson.
The Pharmacies industry is highly fragmented, primarily because of state and territory legislation that restricts pharmacy ownership. Only qualified pharmacists (and not incorporated entities) can own pharmacies. In addition, the number of pharmacies that a pharmacist can own is generally limited. Therefore, individual operators dominate the industry. However, the existence of branded groups means that in the eye of the consumer, the industry appears to be dominated by the likes of Amcal and Chemist Warehouse. The major players in the industry are My Chemist Retail Group, Sigma Pharmaceuticals Limited, Australian Pharmaceutical Industries Limited, TWC Group Investments Limited and Ebos Group Limited.
For more information, visit IBISWorld’s Pharmacies report in Australia industry page.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau
IBISWorld industry Report Key Topics
The industry includes all community pharmacies that sell prescription drugs and patent medicines. The products are sourced either from pharmaceutical wholesalers or directly from upstream pharmaceutical manufacturers. The products are then sold to the general consumer through a pharmacy. Key pharmacy groups include independent community pharmacies, banner groups (both wholesaler-owned and independent), friendly societies, buying groups and discount pharmacies.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.