AUSTRALIA'S full-line pharmacy wholesalers may be forced to begin charging for some deliveries, unless significant changes are made to the funding of the country's pharmaceutical supply chain.
While that's not the wholesaler's preferred option, the current Community Service Obligation (CSO) system is no longer sustainable and needs big changes, according to Sigma Pharmaceuticals ceo Mark Hooper, who is also chair of the National Pharmaceutical Services Association (NPSA).
Speaking at APP yesterday, Hooper suggested an alternative which includes indexation of the CSO, a floor on margins for very cheap items, and tiered mark-up percentages on high-cost drugs.
"Wholesaler funding is estimated to be 26% lower under the 6th Community Pharmacy Agreement than it was under the previous Agreement, while the ongoing impact of price disclosure means that less than 10% of PBS medicines are now profitable to distribute," Hooper said.
"That is putting enormous pressure on the CSO wholesalers to maintain current service delivery levels."
The NPSA engaged global consulting firm L.E.K. to analyse confidential data provided by all the full-line wholesalers.
The alarming findings revealed the wholesalers were still distributing PBS medicines at a loss of 23 cents per unit so that a funding shortfall of up to $500m will emerge over the life of 6CPA if no changes are made to the funding structure.
This is in spite of the fact that the research also unearthed 17.6% improvement in labour productivity, 16.2% reduction in operating costs per unit and millions of dollars invested in new technology and facilities.
"Doing nothing is not an option. We have to protect the sustainability of a supply chain model that has proven to be robust, inclusive and effective for communities across Australia," Hooper concluded.
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