THE federal government's warm relationship with the Pharmacy Guild, already under fire from health groups for not taking more account of consumer interests, is being challenged by a discount chemist chain.

Patients are missing out on discounted medicines because of the guild's dominance of pharmacy regulation, says the 200-outlet Chemist Warehouse.

The company's group manager, Damien Gance, said new pharmacy location rules were blocking it from establishing 40 outlets offering medicines at prices below conventional pharmacies.

Mr Gance said the location rules were changed earlier this year after a government-guild consultation process from which his company, the largest single provider of new pharmacies, had been excluded.

Pharmacist, union and consumer representatives have protested that they had no say in the guild's pharmacy agreement with the government. It delivers $15 billion over five years to pharmacists for dispensing prescribed medicines.

After talks with government officials yesterday, the groups suspended their threat to resign from the consultative process.

The Health Minister, Nicola Roxon, said that while governments had close relationships with the guild, ''I don't believe we're too close to the Pharmacy Guild''.

Ms Roxon said the agreement required active consultation with other pharmacy and consumer groups for the first time.

A spokesman for the guild said that it represented the overwhelming majority of Australia's 5000 pharmacy owners.

''With such a huge investment in their custodianship of the Pharmaceutical Benefits Scheme, it is only appropriate that community pharmacists be able to negotiate the ongoing sustainability and viability of their businesses directly with the government,'' the spokesman said.