Late last year, I was elected President of the World Pharmacy Council (WPC), succeeding American colleague Doug Hoey, who stepped down to become Vice President. Doug is well known in the United States as CEO of the National Community Pharmacists Association (NCPA), which represents independent pharmacy owners.
Just ahead of my appointment, I was invited to present at the NCPA Annual Convention in New Orleans. There was strong interest in how the Australian pharmacy system has avoided some of the worst impacts of corporatisation which plague the US, and in our progress towards full scope of practice.
Corporatisation drives up costs
One of the biggest challenges in American healthcare is the rise of Pharmacy Benefit Managers (PBMs). These corporate intermediaries were meant to simplify drug pricing, but instead they have added layers of complexity while extracting enormous profits.
By 2024, nearly 80 percent of prescription claims were processed by three PBMs: CVS Caremark, Express Scripts, and OptumRx. Their conflicts of interest are clear:
- Rebates are opaque, with savings often kept by PBMs rather than passed on
- Vertical integration steers patients into their own pharmacies and insurers
- Spread pricing hides margins between what insurers pay and pharmacies receive
- Formularies can favour higher-priced drugs that generate bigger rebates.
The result is higher costs for patients, independent pharmacies under pressure, and billions wasted for no added value.
Did you know
Pharmacy Benefit Managers (PBMs) were first established in the United States in the 1960s to help manage prescription drug programs.
Today, three large PBMs — CVS Caremark, Express Scripts and OptumRx — handle the majority of prescription claims in the US.
PBMs create formularies (list of prescription drug), process prescription claims, and manage pharmacy networks on behalf of insurers and employers.
In New Zealand and Australia, there is no direct equivalent to PBMs — our systems are structured differently.
Government steps in on drug pricing
To tackle high drug prices, the US government has revived the Most Favoured Nation (MFN) policy. The principle is simple: Americans should not pay more for medicines than patients in comparable countries.
Pharmaceutical companies are being pushed into MFN deals which lower prices for Medicaid patients and support a new direct-to-consumer platform, TrumpRx.gov, scheduled to launch in 2026.
In September last year, the administration also announced a 100 percent tariff on imported branded or patented pharmaceuticals, though implementation has been paused while negotiations continue. Companies investing in US manufacturing have been granted exemptions.
The global consequences are significant. If the US succeeds in ‘rebalancing’ costs, other countries may face higher drug prices, threatening healthcare budgets worldwide.
Australia has its own lessons here. Our medicines supply chain has been identified as a national security concern, with calls to strengthen local manufacturing and reduce reliance on overseas production. The principle is the same: resilient supply chains and
clear separation of drug budgets from pharmacy service funding are essential to protect patient access and system stability.
Scope of practice lessons
Scope of practice in the US, like in Australia, is authorised at the state level. Most states allow pharmacists to deliver preventive services such as screening for diabetes, cholesterol and blood pressure, smoking cessation, diet and obesity counselling, and a wide range of immunisations.
But there are differences. In many states pharmacists need a collaborative agreement with a physician to administer vaccines. In larger states such as California, pharmacists can independently prescribe and administer all vaccines, including for children.
The challenge is reimbursement. Physicians and other health professionals are paid under Medicare Part B for these services, but pharmacists generally are not. That limits uptake, even though pharmacies have become the number one provider of immunisations since COVID-19. Progress is being made, but slowly.
What this means for us
The New Orleans convention was a reminder of how fortunate we are in Australia to have avoided some of the worst corporate distortions in healthcare. It also reinforced the importance of continuing to expand scope of practice, while protecting the separation of drug budgets from pharmacy service funding.
Our system is not perfect, but it is admired internationally. The lesson from the US is clear: keep pharmacy patient-focused, keep funding structures transparent, and keep pushing for pharmacists to practice to their full scope.
Did you know
In 2009, the US state of Maine, became the 50th jurisdiction to authorise pharmacists to administer vaccines — five years before the first state in Australia — which was Queensland.
Now there are wide differences in the US between states in terms of what vaccines and age groups are included in the authorisation.
The NCPA Annual Convention is the premier national business show for independent pharmacists
One of the biggest challenges in American healthcare is the rise of Pharmacy Benefit Managers
