Budget recognises the vital role of community pharmacy

Media Release

Date: 9 May 2017

The Federal Budget has recognised the vital role of community pharmacy in our health system, with a package of measures which will provide certainty and stability for pharmacies and their patients.

The National President of the Pharmacy Guild of Australia, George Tambassis, said: “The Government has recognised significant pressure on community pharmacies, and the importance of maintaining the pivotal role of the community pharmacy sector in delivering affordable medicines and professional services to Australian patients.

"We are pleased to have reached an Agreement with the Government that supports community pharmacy in return for additional services and reform," he said.

“These measures will have a tangible positive impact on the ability of community pharmacies to serve patients, to dispense affordable medicines, and to play a broader role in the provision of primary health care,” Mr Tambassis said.

The measures announced tonight include:

$200m Support for Pharmacists in recognition of lower than expected script volumes

The Government will provide financial support to pharmacies to moderate the impact of lower than expected PBS prescription volumes under the Sixth Community Pharmacy Agreement (6CPA).

In 2015-16, total script volumes were 2.14 per cent lower than forecast in the 6CPA. This amount will be paid over the remaining life of the 6CPA through an increase to the Administration, Handling and Infrastructure (AHI) fee.

Improved 6CPA Community Pharmacy Programs

The Government also recognises the key role that community pharmacy plays in the primary health care team.

The Government will work with the Guild to modernise community pharmacy programs to provide better primary health care for Australians in the key areas of medication adherence, medication management and improved medication support for Aboriginal and Torres Strait Islanders, including through greater capacity for remote dispensing, and culturally appropriate care.

The pharmacy programs will be funded through a combination of maintaining existing levels of pharmacy program funding, and through an investment from the $600 million already committed in the 6CPA and held in the Contingency Reserve for new and expanded community pharmacy programs. Specifically, from 1 July 2017, the $600 million held in the Contingency Reserve will support new and expanded pharmacy programs including:

  • Dose Administration Aids – providing government-funded DAAs to eligible chronically ill patients ($340m of $600m)
  • Staged Supply ($80m of $600m)
  • Expansion of MedsCheck and Diabetes MedsCheck program ($90m of $600m)
  • Home Medicines Reviews, including follow up services in community pharmacy ($60m of $600m)
  • Incorporating medication management programs within Health Care Homes ($30m of $600m)

The Government commits to deliver the full value of $600 million within the period of the 6CPA.

Removal of the Sunset Provision for Location Rules

The Government has provided a commitment to the continuation of the community pharmacy location rules beyond the life of the 6CPA by amending the relevant sections of the National Health Act 1953 at the earliest opportunity.

Pharmacy Remuneration and Regulation Review

The Government will work with the Pharmacy Guild to ensure that the response to the Pharmacy Remuneration and Regulation Review maintains the community pharmacy model and secures a viable community pharmacy sector.

Optional co-payment discount of up to $1 per script

The Government has indicated it is willing to review the optional co-payment discount of up to $1 per script following the report of the Pharmacy Remuneration and Regulation Review.  However, its willingness to undertake this review does not indicate a current predisposition to discontinue the $1 discount.

Compensation for community pharmacy and wholesalers

The Government will provide $10 million in compensation for community pharmacy over the life of the 6CPA as a result of the reduced remuneration driven by the pricing measures included under the Strategic Agreement with Medicines Australia. This $10 million will be paid in 2018-19 and 2019-20 through a further adjustment to the AHI commencing on 1 July in each of these years.

A further $15 million will be provided to wholesalers over the 6CPA as compensation for both the lower than expected script volumes, and reduced remuneration as a result of the measures under the Strategic Agreement.

Recognising community pharmacy’s role in primary health care

The Government has also undertaken work with Primary Health Networks (PHNs) and with Health Care Homes (HCH) trials to ensure that community pharmacies are involved in supporting patients to further improve their health outcomes.

In acknowledging this package of positive measures, the Pharmacy Guild of Australia has made a number of commitments, including:

Support PBS price reforms

The Guild will support the further pricing reforms that have been negotiated with Medicines Australia to ensure the sustainability of the PBS. Notably, the Guild will support steps which will make many medicines more affordable for taxpayers and consumers:

  • extended/additional F1 formulary statutory price reductions; and
  • increasing the 16 per cent Statutory Price Reduction to 25 per cent on the entry of the first generic or biosimilar brand competition.

Support PBS Stewardship measures

The Guild will support the introduction of measures that improve the uptake of biosimilar medicines as recommended by the Pharmaceutical Benefits Advisory Committee on a case-by-case basis, streamlined authorities for biosimilars compared to the reference biologic, and enhancements to prescribing and dispensing software to establish default prescribing by active ingredient rather than by brand (unless overridden by the prescriber).

Contact: Greg Turnbull
Phone: 0412 910 261

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