TRANSPORT giant Linfox says optimising the pharmaceutical supply chain in Australia would generate annual savings of at least $200 million from the Community Service Obligation funding pool.
The company has made a submission to the Review of Pharmacy Remuneration and Regulation outlining its analysis based on the principles of "network efficiency and balance".
Linfox says there is significant duplication of inventories and resources, and making the supply chain more efficient would provide significant savings, visibility of true supply and demand and greater transparency of cost.
While PBS reform has relieved cost pressures, it has also had a "negative impact on the viability of the pharmaceutical supply chain," with Australia's National Medicines policy now facing the pressure of an "inefficient and structurally unsustainable supply chain that requires greater subsidy".
Rather than the current inefficient distribution network which is estimated to cost govt over $680m annually, Linfox is proposing a single distribution centre in each of seven major centres plus smaller cross-docks in regions.
The company said this would create opportunities to effectively manage inventories to meet the true demand at all locations.
"The adoption of contemporary logistics methodologies can deliver and reduce duplication of service while maintaining clinically appropriate service levels and enhancing delivery of the National Medicines Policy," Linfox said.
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