APP18: Health Minister on the King Review, distribution of high-cost medicines and more

Health Minister Greg Hunt opened the Australian Pharmacy Professional conference (APP18) yesterday and told a packed audience that his ultimate vision is that “pharmacy businesses are sustainable”.

“As then you can be true healthcare professionals to deliver better health outcomes, which is great for the country but, above all, for each individual patient, as it matters to them. I want you to take a moment to reflect with great pride on what you are doing to improve the health of all Australians.”

Mr Hunt said every recommendation of the King Review, which was released yesterday and is now available on the Health Department website, was looked at and considered on its merit on how it will improve patient health and the impact on pharmacy sustainability.

“So, we have taken a very careful approach to the sustainability of pharmacy,” he said.

Key recommendations accepted and rejected:

  • High-cost medicines delivery: accepted. An alternative arrangement for how rebates will be delivered as of July 1, 2019, in a staged approach until July 1, 2020.
  • “What that means is that it will assist in reducing the cashflow carrying costs for pharmacists, increasing the capacity for 22 per cent of pharmacists who are currently not involved in high-cost medicines provision, and make additional funds available for new and earlier high-cost medicines listing,” Mr Hunt said.

  • Vending machine proposal: rejected. “We won’t accept this proposal as the nature of pharmacy is face-to-face delivery.”

  • Tendering of generics: rejected.
    “We won’t move to an exclusive generic medicines tendering.”
  • Mr Hunt said the vending machine proposal and the generics tendering were not accepted on the basis of “risks to the quality of pharmacy or risk to patient supply of medicines and could cause shortages”.

    He said that as a result of the high-cost delivery alternative arrangement, the upfront cost to a pharmacy for the acquisition of, say, hep C medicines would be “significantly lower”.

    “The net payment will be the same, but the upfront payment will be less. This will help provision for new listings,” he said.

    “There will be new money and significant funds for new medicines in the budget. It will be a very positive outcome for medicines and a main theme of the budget next week. This will help protect the whole healthcare sector.”

    Mr Hunt also said the compact that was struck earlier this year with all pharmacy stakeholders is delivering a much faster take-up of My Health Records from the providers as well from patients.

    National Pharmaceutical Services Association (NPSA) response: Pharmaceutical wholesalers have welcomed support of Australian pharmacies in the federal government’s response to the King Review into Pharmacy Remuneration and Regulation.
    “The entire medicine supply chain has been squeezed by PBS reform in recent years,” NPSA Chairman Mark Hooper said. “As a result, some manufacturers have now entered into monopoly supply arrangements with international courier companies.

    “Some of these exclusive agreements only deliver the most profitable medicines to pharmacy. These arrangements undermine the cross-subsidisation model of PBS distribution and could cause the medicine supply chain to splinter along regulated and unregulated lines.

    “Ensuring Australians continue to have access to quality, affordable medicines when and where they need them requires certainty throughout the complex PBS supply chain.

    “NPSA is asking for a clear regulatory framework across the entire medicine supply chain, including a mandate to ensure all PBS medicines are made available through CSO wholesalers, and a floor price on distribution to ensure the PBS supply chain is sustainable for the long term.”

    At APP18, Mr Hunt acknowledged that exclusive supply was fundamental to the existence of the wholesalers and responded: “We are working on this and have a temporary solution which is likely to be announced soon and will lead to a permanent solution. I think that threat has now abated. We now have a much more comfortable position for wholesalers, pharmacists and medicines suppliers.

    “Essentially, we are likely to ensure that there is space for others to be part of the CSO and we have the capacity to include them.”

    The minister added that the “Commonwealth will be providing funding for the uptake and support of electronic tracking and we will be working in particular with the wholesalers.”

    A new pharmacy trial was announced: a $3 million project to be undertaken with 500 aged-care residents in South Australia at risk of deterioration from prolonged use of medicines. Another chronic-pain MedsCheck trial is also likely to be finalised in the coming weeks.

    The King Review is now online. Visit:

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