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CSO wholesalers welcome Federal Government commitment to supply chain sustainability

MEDIA RELEASE  – Australia’s full-line pharmaceutical wholesalers have welcomed the Federal Government’s commitment to provide further funding to them in this year’s Budget and look forward to working with Minister Hunt in the coming months to secure longer-term stability of the pharmaceutical supply chain.

As a consequence of the funding arrangement with Medicines Australia, CSO wholesalers will be compensated for the impact on their remuneration from cuts to the prices of medicines on the PBS.

Our commitment is to provide Australians access to quality and affordable medicines and we welcome this funding agreement that will correct a short-term imbalance, said NSPA Chairman Mark Hooper.

As the Government has demonstrated it understands the issues we face, we are hopeful they will address our remuneration issues for the longer-term as set out in our submission to the Review of Pharmacy Remuneration and Regulation.

In its submission to the Review, wholesalers argued for indexation of the CSO in order to keep pace with inflation and increasing volumes, the introduction a pricing floor that would make the distribution of cheaper medicines more viable, and a tiered mark-up structure on high-cost drugs to compensate for the extra cost incurred by their distribution.

Under the current 6th CPA agreement, CSO wholesalers are forecast to distribute PBS medicines at an economic loss of 23 cents per unit by 2020. In addition, the ongoing impact of previously announced price disclosure makes less than 10 per cent of PBS medicines profitable to distribute.

The funding delivered in this year’s Federal Budget is in some ways an acknowledgment that an imbalance exists within the pharmaceutical supply chain in Australia, Mr Hooper said.

Systemic issues within the current remuneration model threaten timely patient access to critical medicines. We have made our concerns known to the Review Panel and are hopeful our issues will be addressed in the coming months. This current commitment by Government is a step in the right direction.

The National Pharmaceutical Services Association represents CSO wholesalers Australian Pharmaceutical Industries, National Pharmacies, Sigma Healthcare and Symbion.

Contact: Donna Staunton on 0413 185 724 or Phil Martin on 0418 817 876

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