Fresh from healing the deep wounds left after last year’s budget battle with the nation’s doctors, Health Minister Sussan Ley is scrubbing down for some radical surgery on the country’s chemists.

The stakes are high.

The referring doctor is Treasurer Joe Hockey, who is looking for savings of $3 billion in the new pharmacy agreement over four years and a huge $7 billion across the whole health sector.

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The patient is already being prepped. Ms Ley’s campaign began on the weekend when she confirmed she’s looking at savings in the Pharmaceutical Benefits Scheme. That’s the one that heavily subsidises expensive but lifesaving medicines. The trouble is, readily available over-the-counter drugs like paracetamol are also included.

So a 100-pack of Panamax Paracetamol costs $1.89 off the shelf, but when it’s prescribed by a doctor for an eligible pensioner the price shoots up to $8.66. Included is a chemist’s dispensing fee of $6.76. The cost to taxpayers is $73 million a year. This would more than cover the cost for the anti-melanoma drug Ipilimumab at $65 million.

Sussan Ley: government paying too much for people to access basic drugs at chemist.

By taking these readily available drugs and treatments, like dandruff shampoo, off the PBS the minister could recoup $1 billion.

Ms Ley says the thought the government would underwrite these over-the-counter medicines – and paracetamol is just one of them – to the level we are “doesn’t make sense”.

It’s a bitter pill for pharmacists. Not only would the dispensing fee disappear but the Minister also has an offer they want to refuse.

The Minister says she would allow chemists to discount the government-imposed co-payment of $5.10 by one dollar. Great for customers but it would come straight out of chemists’ pockets to the tune of $270 million a year.

To say the chemists are unhappy is an understatement.

The powerful Pharmacy Guild has confirmed it has a multi-million dollar war chest. Its spokesman Greg Turnbull told The Australian last week the Guild doesn’t have a campaign planned at the moment because negotiations with the government are proceeding.

“If they were to stop, well, it might be different.”

The new Ley tack is at odds with one of the key measures in last year’s budget. The proposal there, still on the books, is to raise the PBS co-payment by $5 to $10. Where that leaves her discount offer is a puzzle.

Joe Hockey says he’s not giving up on any of the savings already earmarked. We have a shemozzle here or yet another conflict to be resolved before budget night.

Labor agrees with Ms Ley that the PBS and indeed Medicare could be made more sustainable with well-targeted efficiencies.

Shadow Minister Catherine King is making broadly supportive noises and says some of the moves are being lifted from the former Labor government.

But Ms King says we’ve seen 18 months of an absolute health policy debacle: “A wasted two years of good policy work.”

Never mind the point scoring, the signs are chemists may not be able to rely on the Opposition for first aid in the senate if they feel they need it.

Paul Bongiorno AM is a veteran of the Canberra Press Gallery, with 40 years’ experience covering Australian politics. He is Contributing Editor for Network Ten, appears on Radio National Breakfast and writes a weekly column on national affairs for The New Daily. He tweets at @PaulBongiorno