MEDIA RELEASE: In filing its formal submission to the Review of Pharmacy Remuneration and Regulation, the Chairman of NPSA Mr Mark Hooper stated, “The significance of this Review for Pharmaceutical wholesalers and all those who rely on us for medicines supply across the nation cannot be understated, ” he said. “As wholesalers we supply approximately 6,200 different PBS items to over 5,500 community pharmacies and through them to millions of consumers throughout Australia, generally within 24 hours. This vital service enables the dispensing of 295 million scripts annually by community pharmacists to Australian patients who need medication,” Mr Hooper said.
“The medicines supply sector has evolved and responded with each wave of policy from successive governments. Whilst the system has worked well in many respects, there have been unintended consequences, particularly from the application of PBS price disclosure, the rise in number of generic medicines and the growing pipeline of high-cost medicines. The recent trend in PBS prices has seen a bifurcation towards very low and very high prices, for example, very low wholesale prices for off patent cholesterol-lowering statins of $3.69 for a four week supply compared to very high cost new treatments for Hepatitis C at a current wholesale price of $66,000 for a 12 week course of treatment. The current wholesaler remuneration formula is not viable in the medium term. Now is the time to redress the funding,” he said.
A sustainable funding model must consider both the funding quantum and the funding mechanism. NPSA argues the current model of mark-up plus the CSO Funding Pool works well but it needs to be updated and adjusted to reflect current market realities and the likely consequences moving forward.
“Our submission contains thorough and independent economic analysis of the pharmacy supply chain. The economic analysis conducted by L.E.K. Consulting has found that the remuneration amount for wholesalers contained in the Government’s forecasts for the 6th Community Pharmacy Agreement is broadly aligned to what is required to deliver a minimum return on capital. This however, assumes the money is actually expended, whereas our economic analysis projects a significant underspend,” Mr Hooper said. “So, a change in the mark-up, coupled with a continued and indexed CSO Funding Pool will go part of the way to providing greater stability: sustainable levels of remuneration and an environment into the future in which investment can occur,” he said.
“NPSA thanks the Expert Review Panel for the open and constructive way it has engaged with our sector during the consultation phase of the Review. We look forward to this continuing as the Panel formulates its draft report to Government,” Mr Hooper said.
Contact: Donna Staunton on 0413 185 724 or Donna Edman on 0419 850 174
Click here for the briefing note on the NPSA submission.