Millions of Australians could be left empty-handed when the government’s free rapid test scheme launches on Monday, with pharmacies citing severe supply and cost pressures.
More than 90% of pharmacies could be forced to limit the kits as wholesale prices soar above the slated government rebate, according to industry insiders.
The joint federal and state government Rapid Antigen Testing Concessional Access Program will see millions of pensioners, veterans and low income earners become eligible for up to 10 free tests between now and April.
Pharmacies will be reimbursed $10 for each kit under the plan rubber-stamped at national cabinet last week.
But increased demand has seen wholesale prices jump above the rebate, meaning retailers would be out of pocket and forced to sell the tests at market value.
Matt Feros, a Sydney pharmacist, supported the scheme but was concerned about how quickly he will be reimbursed, or if and when the stock he has ordered will arrive.
“We have to place orders which may take two weeks or longer for delivery, paying upfront cash that we might not get reimbursed for up to a month or more,” he said.
“We have to take a big risk that we might be stuck with large amounts of stock or have bought stock that is higher price than what we would otherwise get paid for.
“It leaves us in a situation where we’re looking to take lesser risk, which may not leave us with the ability to meet initial demands.”
The pharmacist believed many businesses would only be able to “participate in a limited capacity” initially, unable to source sufficient stock under $10 per unit.
The president of the NSW branch of the Pharmacy Guild of Australia, David Heffernan, predicted about nine in 10 pharmacies will have insufficient stock come Monday.
“Pharmacists feel like we’ve got a gun to our heads at the moment because we’ve got to help the public,” Heffernan said, “and we want to, but it’s becoming impossible because the market is so volatile.”
Six weeks ago smaller retailers were able to order tests at about $8 a unit, he explained.
“But what’s happening now is that because of the demand on supply a lot of wholesalers are asking you to pay upfront, and to get a good price you have to order a huge quantity which, if you’re a small pharmacy … you just don’t have that kind of money available,” Heffernan said.
While prime minister Scott Morrison ruled out making rapid tests universally free because of the potential disruption to supply chains, Heffernan said the price issue was being exacerbated by the test shortage and increasing demand from government and private purchasers.
Some pharmacy owners are being forced to place very large orders in a bid to push the unit price below the rebate.
Morrison on Thursday labelled reports the commonwealth was requisitioning supplies of the tests as “false”.
“You may be aware of some false claims regarding commonwealth government requisitioning of rapid antigen tests,” he said. “These are false claims.”
He also denied the government’s procurement efforts were distorting the market.
“We’re not redirecting supplies to commonwealth orders and we have not put in place any arrangements to do that,” the prime minister said.
Multiple sources from within the pharmacy industry said prices had risen since a flurry of purchases from governments eager to secure their own supplies.
“There is a lot of supply in Australia right now, but none of it is ending up with the pharmacists,” Heffernan said.
The cost of the tests compared to the rebate will mean some pharmacists opt out of the system, according to the NSW branch president of the Pharmaceutical Society Chelsea Felkai, a Newcastle-based pharmacist.
“You would be lucky to get an order for under $10 per test,” she said. “The reality is most pharmacists won’t even break even.
“It’s 100% going to discourage pharmacists from being involved.”
Earlier this week, Feros started a waiting list for his most vulnerable customers to register for the first round of subsidised rapid tests. Despite the administrative burden, he said it was important to get the tests to those who needed them.
Concession holders will have access to up to five tests a month, capped at 10 tests overall across a three month period.
Anthony Piggott, who runs a chain of pharmacies in Newcastle, expected price pressures to ease over the life of the concessional scheme but significant issues remain in accessing the tests.
“If someone offered me a shipment at $12 per test, I wouldn’t offer them to concessional patients,” he said. “You just can’t offer the service at a loss.
“But the market should hopefully correct and I think that will happen over time.”
Existing backlogs on orders mean there was “no chance” the pharmacists would be able to offer the tests at a concessional discount come Monday, he said.
“I was expecting a delivery of thousands last week but the orders are just getting held up,” he said. “It seems like the government announced what they were doing first and are dealing with the details after.”
Federal health minister, Greg Hunt, on Thursday conceded availability of tests was not guaranteed.
“It will depend on the individual supply that is available in any particular outlet or pharmacy,” he said.
