THE Health Department has launched a formal consultation on the Community Service Obligation Funding Pool Obligations, seeking feedback from the industry on a range of issues including direct supply of some drugs as well as new payment arrangements for high cost medicines.
The review relates to service standards and compliance requirements that must be adhered to by CSO distributors, and "seeks to identify opportunities for the CSO Funding Pool to better support the objectives set out in the Sixth Community Pharmacy Agreement, the National Medicines Policy and broader Government priorities that seek to improve access to medicines".
A range of changes are under consideration, including removal of the requirement that each CSO distributor hold stock of at least one brand of every PBS medicine.
The department is also seeking to further clarify requirements that CSO distributors do not impose fees or trading terms that potentially circumvent CSO objectives, such as for delivery to rural areas, delivery within the Guaranteed Supply Period, supply of particular PBS medicines or ordering less than a specified minimum value/quantity.
In relation to high cost medicines, a trial commencing 01 Jul 2019 will see payments split, with the effective PBS price to be paid directly to the manufacturer by the Department of Human Services, while fees and mark-ups would be separately paid to pharmacies based on the published price.
Pharmacies would remit the wholesaler mark-up to distributors.
This change would mean when these medicines are dispensed there would be two potential prices: the private price payable for a non-PBS dispense, or nil cost price to the wholesaler and pharmacy for a PBS dispense.
The review also canvasses options under exclusive supply arrangements, confirming the department is considering requiring that PBS medicines be only distributed via CSO arrangements, or requiring that PBS medicines distributed under direct arrangements be also made available via all pharmaceutical wholesalers.
The National Pharmaceutical Services Association welcomed the review, but noted "any reform needs to protect the original intent of the system, which is to ensure all Australians have affordable and equitable access to all PBS medicines, regardless of where they live".
NPSA chairman Mark Hooper said the organisation would submit that all PBS medicines be made available to CSO wholesalers, and that any new CSO entrants must be held to the same standards for delivering the National Medicines Policy.
He said monopoly arrangements between manufacturers and courier companies undermined the CSO's cross-subsidation model.
The consultation period runs until 29 Jun, with submissions lodged via CSOAdmin@health.gov.au.
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