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Medicine supply under threat

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Guild backs NPSA and calls for PBS listing of medicines to be conditional on supply through CSO wholesalers

Action is needed to protect Australia’s struggling medicine wholesale section, speakers at the APP State of the Industry panel discussion said.

One of the key concerns of several of the speakers was the state of our medicine supply chain, which has been buffeted by constant bouts of PBS reform, and more recently by the increase in exclusive supply arrangements by pharmaceutical manufacturers.

Addressing APP delegates, Mark Hooper, chair of the National Pharmaceutical Services Association (NPSA) said there were two ongoing major risks to the wholesale sector.

The first of these is the spread of unregulated exclusive distribution arrangements, especially for select high-value medicines.

Secondly, Mr Hooper highlighted the unsustainable current supply model “eroded year after year” by PBS reform without the safety net of a pricing floor, similar to the AHI fee negotiated in the 6CPA.   

Mr Hooper was careful to highlight that he was not talking about direct distribution models, rather the current version which sees exclusive supply arrangements which “effectively cherry pick high-value products”.

“I keep making the distinction between exclusive and direct,” he said. “Manufacturers have option of a direct supply model, but i don’t understand why you’d have a single point of failure for medicines as you get through an exclusive supply arrangement.

“If that model continues, the wholesale sector is not sustainable,” he said, adding that “supply chain sustainability is critical to community pharmacy.”

Mr Hooper did highlight the support of the Pharmacy Guild of Australia, whose national president George Tambassis said at the panel discussion that they had gone “even further” than the NPSA and called for the government to make it a condition that if a medicine is PBS listed it should be available for supply through all CSO wholesalers.

Health Minister Greg Hunt had been more receptive to the wholesalers’ requests than his predecessors, Mr Hooper said.

“I acknowledge that we feel we’ve got an open ear from government, but it is a little frustrating the time it’s taken to get that acknowledgement.”

Wes Cook, Medicines Australia chairman, said “reliable supply of medicines to patients is fundamental, that has to be the essential basis of the supply chain”.

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