MONITORING REPORT FOR THE COMMUNITY PHARMACY SERVICES AGREEMENT (CPSA) Report for: May 2018 Reporting on: March 2018

Transcription

1 MONITORING REPORT FOR THE COMMUNITY PHARMACY SERVICES AGREEMENT (CPSA) Report for: May 2018 Reporting on: HEADLINE MEASURES Patient Centric Active LTC Patient Registrations Growth Initial Items Growth Indicator Trend Results for: Reference Difference From: Comment Reference Feb-13 Mar-18 % annual growth yr on yr Jul-12 Mar-18 Repeat Items Growth (excluding Atorvastatin and Metoprolol) % annual growth yr on yr Jul-12 Mar-18 Financial (incl. Margins) Variance from 'Agreed ' YTD vs YTD Jul-17 Jun-18 ADDITIONAL COMMENTARY k k k 5.9 k -7.2 k 2.40% 1.57% 1.96% % 4.46% 3.89% $329.8 m $320.4 m $320.4 m NA $9.4 m 2.93% LTC Registration numbers have increased slightly for the previous month but remains stable overall. Work is progressing to enable system changes to identifiy LTC Mental Health patients. Current figures suggest $2.4M for LTC mental health is highly unlikely to be spent. The National cap of 140K LTC patient is unlikely to be reached. Initial Item growth is tracking slightly above original planning expectations but within acceptable range. Year on year repeat item growth (excluding Atorvastatin and Metoprolol) remains stable even with the impact of Simvastatin in recent months. Simvastatin items have not been excluded from this calculation. Actual expenditure remains above Agreed in line with expectation. Current figures compare actual figures year to date with payments made to the same time last year. Note that last year there was a large brand switch spend in Februray to April, but this year there has not been comparable brandswitch expenditure. Further claims for March are still likely to be received which will increase the March figure. Simvastatin Topic Commentary Additional monitoring (page 13) shows Simvastatin dispensing behaving as expected. Stat and non-stat dispensing of initial items are returning to expected levels. Repeat dispensing will lag behind them.

2 MONTH AT A GLANCE FINANCIAL Growth YTD Spend YTD Actual Claimant Count % Brand switch 8,9 $0.42 m $1.93 m $2.58 m PATIENT COUNT (monthly totals) Growth All Patients Dispensed to 2 1,370,527 1,409, % Patients Dispensed to under Core Flag 1,207,247 1,246, % CPAMS 8 $2.71 m $2.67 m $3.58 m Agreed 7 $ m $ m $ m PROCESS LTC Register 3 133, , % Dispensing Ratio Patients Dispensed to under LTC Flag 118, , % % Initial Items with Repeats Available 25.63% 27.67% Patients Dispensed to under ARRC Flag 4 41,397 42, % % CaseMix 11 Repeats % 73.49% 0.00 CRC Register 6,521 6, % % CaseMix Repeats % 23.01% 0.05 CDOS Register 1,486 1, % % CaseMix Repeats % 1.30% 0.01 ARRC Residual 5 33,390 34, % % CaseMix Repeats % 2.20% CPAMS 6,886 6, % NHI Coverage (Core Initial Items) 99.59% 99.53% 0.06 Change ITEM COUNT 6 (12 month Totals) ANNUAL GROWTH Growth Change Total Items M M 1.31% Total Items 1.31% 3.78% Initial Items M M 2.40% Initial Items 2.40% 1.57% 0.83 Initial Items Stat (/0) M M 3.57% Initial Items Stat (/0) 3.57% -1.27% 4.84 Initial Items non Stat (/1) M M -0.77% Initial Items non Stat (/1) -0.77% 10.24% Repeat Items M M -0.59% Repeat Items -0.59% 7.88% Repeat Items ex Atorvastatin & Metoprolol M M 2.64% Repeat Items ex Atorvastatin & Metoprolol 2.64% 4.46% Claimant count is a count of claimants who had dispensing in the relevant month. 2. Unique patient counts are based on patients dispensed to in that month. 3. The number of Active Long Term Conditions (LTC) Patient Registrations is a count of patients registered and eligible to receive LTC Monthly Service Fees for the following month. These figures are taken from the payment file. Note that this number may be different from the count of patients dispensed to under the LTC flag. 4. The count of Age Related Residential Care (ARRC) patients includes all patients dispensed to under the ARRC flag which includes Co-Dispensing Opioid Service (CDOS) and Community Residential Care (CRC) registered patients. The count of ARRC patients reported for the current month is likely to be lower than the actual value as ARRC claims generally take longer to process. 5. ARRC residual is a proxy for true ARRC numbers. It is simply the number of patients dispensed to under the ARRC flag less the number of registered CRC and CDOS patients. 6. Item counts exclude Brand switch items, non-invoiced items, compound components and items with above standard co-payment where the transaction is less than the co-payment. Credits and Resubmits have been applied. Supply orders are included. No adjustment for the impact of Metoprolol has been made. The impact of this on non stat (/1) initial items and repeat items will be seen in the 12 month totals until May 2018 and the growth rates until May The Agreed includes Base Handling Fees, Specific Service Handling Fees, CPAMS expenditure, Brand switch expenditure, LTC Monthly Service Fees, Case Mix Fees, Margins and Subsidised Unregistered Medicines (excluding the subsidy cost of the pharmaceutical). It excludes Part P arrangements and New Services Initiatives. The final Agreed will be the final audited expenditure for 2016/ Brand switch and Community Pharmacy Anti-Coagulation Management Service (CPAMS) are tracked independently for historic reasons. 9. Brand switch expenditure is irregular so nominal phasing has been used instead of last year s figure. 10. The Dispensing Ratio is the total number of items over the number of initial items. 11. Case Mix Service Fees apply to Core and LTC Order type 1 items. 2

3 INDICATOR DEFINITIONS The purpose of the table below is to provide guidance on what the thresholds for each of the measurable indicators are. This is an initial draft only and figures entered are intended as starting point. Input from the group is required to finalise this table. Indicators RED = beyond acceptable tolerance levels, action required (or trigger review process) AMBER = indication of movement towards tolerance limits beyond assumed natural variance/planned growth, continue monitoring to decide if action is required GREEN = within acceptable tolerance levels/maintaining baseline, no action required Category Measure Reference Points Planned Review Point Baseline Patient Active LTC Patient Registrations <=136,611 >136,611 to <=140,836 GREEN AMBER RED Explanation >140,836 The cap is set to provide for up to 140,836 patients (inclusive of 9520 mental health patients). Patient Counts NA NA NA NA NA NA Indicator not required. Figures give indication of service utilisation and can be used with other values to derive rates per patient. NHI Coverage (Core Services) 100% NA 98.6% > 98.6% <= 98.6% <= 95% Maintain or improve coverage. Stage 3 coverage is used as the baseline. Is this still relevant? Growth Initial Items Growth to Base 7.5% by end of 15/16 from 11/12 base year Financial Lower - 0% Upper - 15% 2011/12 > 0% < 7.5% >= 7.5% < 15% Initial Items Annual Growth 1.96% >2.0% to <3.0% >0.0% to <=2.0% or >=3.0% to <5.0% Repeat Items Annual Growth 3.89% >2.0% to <3.0% >0.0% to <=2.0% or >=3.0% to <5.0% Initial Dispensing Stat (/0) vs. Non Stat (/1) (% (/1) of Initial Items) No change from Stage 3 Total Items Dispensed 66,585,215 Actual against Agreed Above Agreed >= 15% <= 0% <=0.0% or >=5.0% <=0.0% or >=5.0% If growth is outside the range of 0% to 15% for 2015/16 against base year a review will be triggered. 7.5% has been selected as it is the median growth % indicated by the contract. Historic measure, FM to consider its ongoing relevance. Reference is from the latest forecast model Reference is from the latest forecast model and includes adjustment for Atorvastatin and Metoprolol excess dispensing 23.36% Split by Core, LTC and Specific Services. Note that change within each service may cancel each other out and may not affect the overall ratio. 2016/17 Actual Above Agreed >1.0% to <= 5% Above Agreed >0.0% to <=1.0% >5.0% Below Agreed Approved by FM 25/01/18: The Agreed is the minimum payment under the CPSA for financial year Agreed replaces the 2016/17 Minimum Guarantee. Note that Brand switch or CPAMS payments are no longer capped under the CPSA 2018 financial year extension. Process Estimated Financial value of items claimed after Case Mix Service Fee Cut-off LTC Monthly Service Fee 0.3% of all Case Mix items claimed NA < 0.3% >= 0.3% >= 0.5% Monitor size of claims value after cut-off date to ensure it is accounted for in the final expenditure figure. NA NA NA NA NA NA Not required as budget is based on patient numbers. $35.5 m budgeted for up to 140,836 patients. Monitoring Active LTC Patient Registrations will be adequate. CPAM Service Brand switch $2.0 m nominally phased Growth in Specific Services Initial Dispensing with Repeats by Number of Dispensing Available Repeat Dispensing by Case Mix Service Fee Bands Initial Dispensing by Case Mix Service Fee Bands Dispensing Ratio No Change from Stage 3 ratio No Change from Stage 3 ratio No Change from Stage 3 ratio TBC TBC TBC $60.5 m - phased Stage 3 Ratio Stage 3 Ratio Stage 3 Ratio Brand switch expenditure is irregular and phasing is nominal. 3

4 DIFFERENCES BETWEEN 2016/17 AND 2017/18 EXPENDITURE MONITORING The payment arrangements for 2017/18 differ from that of 2016/17 in that the Minimum Payment Guarantee has been replaced by an Agreed. Should normal payments fall short of this Agreed amount the shortfall will be made up to the Agreed using the same method that applied to the Minimum Payment Guarantee in 2016/ /17 Minimum Guarantee 2017/18 Agreed Explanation Funding Mechanism Minimum Guaranteed Agreed (the final audited amount of Handling Fees, Service Fees, Margins and any other amounts paid by all DHBs to all providers during the 2016/17 FY) Top of Target Range (Minimum Guaranteed + 1%) Payment Management Reserve (PMR) None None N/A If expenditure is below Agreed, a payment release is required using the Contract Extension methodology. Within year monitoring Brand switch Tracked against Minimum Guaranteed Brand Switch above cap does not count towards minimum guaranteed expenditure Tracked against previous year Brand switch total subject to PHARMAC decisions CPAMS CPAMS expenditure above cap does not count towards minimum guaranteed expenditure Assumption is that funding of at least $3.5M will apply in 2017/18 New Initiatives 2017/18: - LTC Mental Health - Smoking Cessation - Workforce Development Please note these initiatives will be covered on a separate report None Funding: - $2.4M for LTC Mental Health - $600K for Smoking Cessation - $1.1M for Workforce Development - DHBs work with Contract Group to ensure funding is spent or redistributed - DHBs work with Contract Group to ensure funding is spent or redistributed - Amount made available to pharmacies, unspent amount does not get redistributed 4

5 -3, , , , , , , ,913 1,047 1, , ,152 1, ,109 1, ,545 3,145 3,657 5,964 Active LTC Patient Registrations K 180 K 160 K 140 K 120 K 100 K 80 K 60 K 40 K 20 K 0 K Active LTC Patient Registrations Active LTC Patient Registrations Planned Contractual Review Point LTC Cap 116, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,638 Patient Counts and NHI Coverage (Core Services) Last 12 Months PATIENT CENTRIC Count Active LTC Patient Registrations Results from: Change from: LTC Cap 7 Value Value % Value % 133, , , % 5, % 140,836 7, The number of Active LTC Patient Registrations is a count of patients registered and eligible to receive LTC Monthly Service Fees for the following month. These figures are taken from the payment file. 2. Unique patient counts are based on patients dispensed to in that month. Note that for LTC this number may be different from the count of Active LTC Patient Registrations due to the difference in counting method. 3. The Unique Patient Count will probably be more than sum of Core, LTC and ARRC counts as a patient may be counted in more than one category within a given month. This may be due to an actual change in category or for some other reason such as an LTC patient visiting a pharmacy where he/she is not registered where they will be counted as a Core patient. 4. The count of ARRC patients includes all patients dispensed to under the ARRC flag which includes CDOS and CRC registered patients. The count of ARRC patients reported for the current month is likely to be lower than the actual value as ARRC claims generally take longer to process. The count for the previous month is more likely to be sufficiently complete to be of use. 5. ARRC residual is a proxy for true ARRC numbers. It is simply the number of patients dispensed to under the ARRC flag less the number of registered CRC and CDOS patients. 6. The Stage 3 Average for these measures has been chosen as a baseline to measure the impact of Stage LTC Cap is calculated on the basis of a national cap on the total number of service users who may receive LTC Pharmacy Services across all DHB geographical areas on 30 June 2017 plus 9520 new service users. 6 K 5 K 4 K 3 K 2 K 1 K 0 K -1 K -2 K -3 K -4 K Gain/Loss of Active LTC Patient Registrations from Previous Month Count/Coverage Results from: Change from: Baseline 12 mth 12 mth Stage 3 Movement Low High Count % Count % Average 6 Count % Unique Patient Count 2,3-1,370,527 1,267,955 1,459,815 1,284,021 1,409,404 86, % -38, % 1,228, , % - Core - 1,207,247 1,109,974 1,295,733 1,122,567 1,246,829 84, % -39, % 1,070, , % - LTC - 118, , , , ,576 4, % 1, % 114,802 3, % - ARRC 4-41,397 41,397 43,342 42,211 42, % -1, % 41, % CRC - 6,521 6,457 6,582 6,525 6, % % 6, % CDOS - 1,486 1,427 1,486 1,483 1, % % % ARRC Residual 5-33,390 33,390 35,364 34,203 34, % -1, % 34, % CPAMS - 6,886 6,688 6,886 6,884 6, % % 2,383 4, % NHI Coverage (Core Initial Items) 99.59% 99.50% 99.65% 99.57% 99.53% 0.03 NA 0.06 NA 98.59% 1.00 NA Distance to Cap

6 Initial Items GROWTH Initial Items Growth: Rolling 12 Month Totals against 2011/12 Base Year 1 % of Initial Items with Repeats Available Initial Item Growth Lower Limit (Risk Corridor) Planned Growth Upper Limit (Risk Corridor) % (/1) Core % (/1) LTC % (/1) Specific Services % (/1) Stage 3 Overall Baseline % (/1) Overall 12% 70% 10% 60% 8% 50% 6% 4% 40% 2% 30% 0% 20% Jul 2012 Sep 2012 Nov 2012 Jan 2013 Mar 2013 May 2013 Jul 2013 Sep 2013 Nov 2013 Jan 2014 Mar 2014 May 2014 Jul 2014 Sep 2014 Nov 2014 Jan 2015 Mar 2015 May 2015 Jul 2015 Sep 2015 Nov 2015 Jan 2016 Mar 2016 May 2016 Jul 2016 Sep 2016 Nov 2016 Jan 2017 Mar 2017 May 2017 Jul 2017 Sep 2017 Nov 2017 Jan 2018 Mar % 12 Month Totals Initial Items Growth 1 Growth from Mar /12 Growth from 2011/12 Base Year to Mar 2018 Base Year 1 Items % Items % Items % Items % m m m m 4.06 m 9.97% 4.19 m 10.28% 3.01 m 7.39% 1.05 m 2.40% 0% Jul 2012 Sep 2012 Nov 2012 Jan 2013 Mar 2013 May 2013 Jul 2013 Sep 2013 Nov 2013 Jan 2014 Mar 2014 May 2014 Jul 2014 Sep 2014 Nov 2014 Jan 2015 Mar 2015 May 2015 Jul 2015 Sep 2015 Nov 2015 Jan 2016 Mar 2016 May 2016 Jul 2016 Sep 2016 Nov 2016 Jan 2017 Mar 2017 May 2017 Jul 2017 Sep 2017 Nov 2017 Jan 2018 Mar 2018 Initial Items with (/1) and without (/0) Repeats Ratio and % Breakdown Count of Items % Initial Items with Repeats Available Results from: Change in % of (/1) from: (/0) (/1) (/0) + (/1) 12 mth Low 12 mth High Last month Stage 3 3 Change (/0) (/1) (/0) + (/1) Core m m m 16.88% 15.98% 18.48% 17.44% 18.52% % % 53% 80% LTC m m m 63.38% 61.87% 64.57% 64.24% 63.82% % % 32% 13% Specific Services m m m 58.21% 58.21% 61.15% 61.15% 59.92% % % 15% 7% Combined (Core, LTC, Specific Services) m m m 25.63% 25.00% 27.80% 26.93% 27.67% % % 100% 100% Baseline % of Combined (Core, LTC, Specific Services) Initial Items with (/1) and without (/0) Repeats 12 Month Trend Results from: % Growth from: Stage 3 Average 3 Monthly Totals per Effective Day 4 (/0) (/1) (/0) (/1) (/0) (/1) (/0) (/1) (/0) (/1) (/0) (/1) (/0) (/1) (/0) (/1) Core 106,723 21, ,532 22,299 99,092 22, % -2.83% 7.70% -3.81% % 27.70% LTC 7,520 13,018 7,401 13,293 7,058 12, % -2.07% 6.55% 4.57% % 11.65% Specific Services 2 4,465 6,219 5,000 7,871 5,068 7, % % % % % -9.23% Combined (Core, LTC, Specific Services) 118,707 40, ,934 43, ,218 42, % -5.89% 6.73% -3.87% % 15.29% Baseline % Growth Item counts exclude Brand switch items, non-invoiced items, compounds and items with above standard co-payment where the transaction is less than the co-payment. The item count for Initial Items Growth includes supply orders, however the count comparing Initial Items with and without Repeats does not as this measure is not relevant to supply orders. Figures for the last few months will increase due to late claims. The effect is particularly strong for ARRC figures, which are included within Specific Services counts, as ARRC claims can take longer to process. 1. Initial Items Growth is specified in the risk clause and uses 2011/12 (pre-contract) as the base year. 2. Specific Services covers all non Core and LTC dispensing. 3. The Stage 3 Average for the percentage of Initial Items with Repeats available (/1) has been chosen as a baseline to measure the impact of Stage Weighting by Effective Day adjusts for calendar effects by month and makes comparison between months more useful. 6

7 Total Items Dispensed GROWTH Total Items Dispensed: 12 month Totals 75 m Number of Items 2011/12 Baseline 70 m 65 m 60 m 55 m 50 m Jan 2010 Mar 2010 May 2010 Jul 2010 Sep 2010 Nov 2010 Jan 2011 Mar 2011 May 2011 Jul 2011 Sep 2011 Nov 2011 Jan 2012 Mar 2012 May 2012 Jul 2012 Sep 2012 Nov 2012 Jan 2013 Mar 2013 May 2013 Jul 2013 Sep 2013 Nov 2013 Jan 2014 Total Items Dispensed: 12 month Totals Item counts exclude Brand switch items, non-invoiced items, compound components and items with above standard co-payment where the transaction is less than the co-payment. Credits and Resubmits have been applied. Supply Orders are included. 1. Total items dispensed is specified in the risk clause and uses 2011/12 (pre-contract) as the base year. 7 Mar 2014 May 2014 Results from: Change from: Baseline Movement Jun Count % Count % Count % m m m m -0.36% 0.90 m 1.31% m 3.02 m 4.54% Jul 2014 Sep 2014 Nov 2014 Jan 2015 Mar 2015 May 2015 Jul 2015 Sep 2015 Nov 2015 Jan 2016 Mar 2016 May 2016 Jul 2016 Sep 2016 Nov 2016 Jan 2017 Mar 2017 May 2017 Jul 2017 Sep 2017 Nov 2017 Jan 2018 Mar 2018

8 FINANCIAL against 2017/18 Agreed 1 $12.00 m $10.00 m $8.00 m $6.00 m $4.00 m $2.00 m $0.00 m 6.00% 4.00% $1.98m 5.72% $3.48m 4.81% Above/Below Agreed - Cumulative $ & % $10.00m $10.76m $9.42m $7.76m $7.80m $6.44m $4.22m 3.88% 4.50% 4.32% 3.60% 4.00% 3.80% 2.94% (Mar) YTD Total Agreed 1 $37.51 m $ m $ m Actual This Year $36.17 m $ m $ m Variance from Agreed Exp. -$1.34 m $9.42 m -$98.28 m % Late Case Mix Claims 0.13% NA Case Mix Claims YTD $ m NA Estimated value of late CMF Claims 2 $0.23 m NA 2.00% 0.00% -2.00% Month by Month Difference from 2017/2018 Total Agreed YTD Remaining YTD YTD $ $ % $ % $ % LTC Monthly Service Fee $2.83 m $25.26 m $2.64 m $23.91 m $0.19 m 7.22% $1.35 m 5.64% $32.05 m $6.79 m 21.19% Specific Services $4.94 m $46.57 m $5.37 m $45.76 m -$0.42 m -7.88% $0.81 m 1.77% $61.27 m $14.69 m 23.98% CPAM Service $0.28 m $2.71 m $0.31 m $2.67 m -$0.03 m -8.22% $0.04 m 1.43% $3.58 m $0.87 m 24.25% Brand switch 3 $0.01 m $0.42 m $0.21 m $1.93 m -$0.20 m % -$1.51 m % $2.58 m $2.16 m 83.62% Core and LTC Services 4 $24.33 m $ m $25.23 m $ m -$0.90 m -3.56% $4.72 m 2.19% $ m $67.54 m 23.42% Margins $3.77 m $33.43 m $3.41 m $29.16 m $0.36 m 10.53% $4.27 m 14.64% $39.03 m $5.60 m 14.35% Subsidised Unreg Meds $0.00 m $0.54 m $0.34 m $0.80 m -$0.34 m % -$0.26 m % $1.17 m $0.63 m 53.99% Total $36.17 m $ m $37.51 m $ m -$1.34 m $9.42 m $ m $98.28 m 1. The Agreed includes Base Handling Fees, Specific Service Handling Fees, CPAMS expenditure, Brand switch expenditure, LTC Monthly Service Fees, Case Mix Fees, Margins and Subsidised Unregistered Medicines (excluding the subsidy cost of the pharmaceutical). It excludes Part P arrangements and New Services Initiatives. The final Agreed is the final audited expenditure for 2016/17 2. Claims for Case Mix Fees made after the month following the month of service, but before the late claim cut off period will be paid as part of end of year payments. 3. Brand switch expenditure is irregular so nominal phasing has been used instead of last year s figure. 4. Core and LTC Services are made up of Handling Fees and Case Mix Fees. With the exception of LTC Monthly Service Fees, payments are recorded by the month of service, not the month of payment. Therefore figures for previous months may change due to late claims. Handling fees are the net of credits and resubmits and exclude non-invoiced items, compound components and items with above standard co-payment where the transaction is less than the co-payment. Interim Actual payments for Case Mix Fees for the last month have not been calculated yet, so Advance payments (based on previous dispensing with a seasonal adjustment factor) have been used. 8

9 Specific Services 1 FINANCIAL Growth in 12 mth Totals from ($) (%) PH Supply Orders $304,030 $2,621,270 $3,498,198 $3,365,855 $132, % 5.63% PH Extemporaneously Compounded Pharmaceuticals $103,445 $1,039,683 $1,390,787 $1,408,788 -$18, % 2.23% PH Special Foods $95,842 $849,179 $1,112,473 $993,580 $118, % 1.82% PH NPPA A $1,051 $12,226 $15,883 $15,958 -$ % 0.03% PH NPPA B $2,682 $26,089 $34,795 $34,821 -$ % 0.06% PH Methadone 2 /Suboxone (Opioid Dependency) $1,229,150 $10,717,133 $14,206,105 $13,906,824 $299, % 23.00% PH Other Class B $798,876 $7,198,582 $9,570,471 $9,277,103 $293, % 15.45% PH Clozapine $157,386 $1,456,655 $1,941,457 $2,008,318 -$66, % 3.13% PH Aseptic $182,946 $1,692,881 $2,249,832 $2,158,796 $91, % 3.63% PH ARRC/CRC/CDOS $2,069,539 $20,978,810 $27,931,434 $27,788,801 $142, % 45.03% Specific Service Total $4,944,947 $46,592,510 $61,951,435 $60,958,845 $992, % % Refer Appendix for specific pricing Month by Month YTD 12 mth Totals 12 mth Totals % Specific Service (YTD) 1. excludes Brand switch items, non-invoiced items, compound components and items with above standard co-payment where the transaction is less than the co-payment. Credits and resubmits have not been applied. 2. Units (ml, g) are used to identify methadone dispensing for opioid dependency. 9

10 PROCESS Case Mix 1 Initial Items with Repeats (/1) banded by Number of Dispensing Available Core Initial Items with Repeats banded by Number of Dispensings Available: % in each Band 12 Month Trend 12 mth Low 12 mth High Results from: Change in % from: % 95.73% 96.11% 95.94% 96.16% % 3.69% 4.07% 3.85% 3.64% % 0.09% 0.12% 0.09% 0.11% % 0.09% 0.13% 0.11% 0.09% LTC % 84.71% 85.84% 85.63% 85.03% % 13.77% 14.88% 13.97% 14.54% % 0.11% 0.16% 0.14% 0.12% % 0.25% 0.30% 0.27% 0.31% Core LTC Initial Items with Repeats banded by Number of Dispensings Available: Monthly Totals per Effective Day 2 12 Month Trend 12 mth Low 12 mth High Results from: Change from: Items % Items % 20,787 20,376 24,214 21,421 21, % % % % % % % % 11,185 10,938 12,656 11,399 10, % % 1,794 1,794 2,072 1,860 1, % % % % % % Item counts exclude Brand switch items, non-invoiced items and compound components. Credits and Resubmits have not been applied. 1. Case Mix Service Fees apply to Core and LTC Order type 1 items. 2. Weighting by Effective Day adjusts for calendar effects and allows comparison between months. 10

11 PROCESS Case Mix 1 Repeat Items banded by Repeat Sequence Number Core 12 Month Trend Repeats banded by Repeat Sequence Number: % in each Band 12 mth Low 12 mth High Results from: Change in % from: % 86.83% 87.87% 87.31% 88.10% % 9.83% 10.42% 10.28% 9.90% % 0.92% 1.28% 0.92% 1.01% % 1.32% 1.66% 1.48% 0.99% LTC % 60.66% 63.04% 63.04% 60.93% % 32.42% 34.77% 32.42% 34.28% % 1.25% 1.75% 1.44% 1.55% % 2.76% 3.57% 3.10% 3.24% Core LTC Month Trend Repeats banded by Repeat Sequence Number: Monthly Totals per Effective Day 2 12 mth Low 12 mth High Results from: Change from: Items % Items % 27,434 25,875 32,932 28,082 28, % -1, % 3,256 3,074 3,683 3,308 3, % % % % % % 24,450 22,868 26,635 25,195 22, % 1, % 13,019 12,731 14,610 12,957 12, % % % % 1,097 1,065 1,398 1,237 1, % % Item counts exclude Brand switch items, non-invoiced items and compound components. Credits and Resubmits have not been applied. 1. Case Mix Service Fees apply to Core and LTC Order type 1 items. 2. Weighting by Effective Day adjusts for calendar effects and allows comparison between months. 11

12 Dispensing Ratio PROCESS Dispensing Ratio Core LTC Specific Services Overall Dispensing ratio Core LTC Specific Services 2 Combined (Core, LTC, Specific Services) Results from: Change from: % of Combined (Core, LTC, Specific Services) Total Items Initial Items % 80% % 13% % 7% % 100% Item counts exclude Brand switch items, non-invoiced items, compound components, supply orders and items with above standard co-payment where the transaction is less than the co-payment. Credits and Resubmits have been applied. 1. The Dispensing Ratio is the total number of items over the number of initial items. 2. The Specific Services dispensing ratio for the latest month has been omitted from the graph as the data is skewed due to late ARRC claims. 12

13 ADDITIONAL ANALYSIS Simvastatin Month Stat Initials 35,180 33,288 38,428 31,544 39,073 35,081 32,859 36,334 32,661 33,015 34,783 27,539 15,823 16,671 31,449 Non Stat Initials 10,124 9,219 10,703 9,226 10,756 9,709 9,643 10,109 9,309 9,465 9,799 16,063 25,081 20,179 9,235 Repeats 29,050 27,957 31,127 26,752 31,462 27,977 28,065 28,706 26,887 27,621 27,449 26,418 30,699 37,166 44,547 13

14 Jan 2010 Apr 2010 Jul 2010 Oct 2010 Jan 2011 Apr 2011 Jul 2011 Oct 2011 Jan 2012 Apr 2012 Jul 2012 Oct 2012 Jan 2013 Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Oct 2014 Jan 2015 Apr 2015 Jul 2015 Oct 2015 Jan 2016 Apr 2016 Jul 2016 Oct 2016 Jan 2017 Apr 2017 Jul 2017 Oct 2017 Jan 2018 Jan 2011 Mar 2011 May 2011 Jul 2011 Sep 2011 Nov 2011 Jan 2012 Mar 2012 May 2012 Jul 2012 Sep 2012 Nov 2012 Jan 2013 Mar 2013 May 2013 Jul 2013 Sep 2013 Nov 2013 Jan 2014 Mar 2014 May 2014 Jul 2014 Sep 2014 Nov 2014 Jan 2015 Mar 2015 May 2015 Jul 2015 Sep 2015 Nov 2015 Jan 2016 Mar 2016 May 2016 Jul 2016 Sep 2016 Nov 2016 Jan 2017 Mar 2017 May 2017 Jul 2017 Sep 2017 Nov 2017 Jan 2018 Mar 2018 QUARTERLY TREND ANALYSIS Dispensing Volume & Annual Growth Initial and Repeat Items: 12 month Totals Annual Growth in Initial, Repeat and Total Items 50.0M Stage 1 Initial Items Stage 2 Stage 3 Repeat Items Stage % Stage 1 Stage 2 All Items Initial Items Repeat Items Stage 3 Stage M 10.00% 40.0M 35.0M 5.00% 30.0M 0.00% 25.0M 20.0M -5.00% 15.0M % 10.0M % 5.0M 0.0M Jan 2010 Apr 2010 Jul 2010 Oct 2010 Jan 2011 Apr 2011 Jul 2011 Oct 2011 Jan 2012 Apr 2012 Jul 2012 Oct 2012 Jan 2013 Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Oct 2014 Jan 2015 Apr 2015 Jul 2015 Oct 2015 Jan 2016 Apr 2016 Jul 2016 Oct 2016 Jan 2017 Apr 2017 Jul 2017 Oct 2017 Jan % Jan 2011 Mar 2011 May 2011 Jul 2011 Sep 2011 Nov 2011 Jan 2012 Mar 2012 May 2012 Jul 2012 Sep 2012 Nov 2012 Jan 2013 Mar 2013 May 2013 Jul 2013 Sep 2013 Nov 2013 Jan 2014 Mar 2014 May 2014 Jul 2014 Sep 2014 Nov 2014 Jan 2015 Mar 2015 May 2015 Jul 2015 Sep 2015 Nov 2015 Jan 2016 Mar 2016 May 2016 Jul 2016 Sep 2016 Nov 2016 Jan 2017 Mar 2017 May 2017 Jul 2017 Sep 2017 Nov 2017 Jan 2018 Mar 2018 Initial Items with (/1) and without (/0) Repeats: 12 month Totals Annual Growth in Initial Items with (/1) and without (/0) Repeats 35.0M Stage 1 (/0) (/1) Stage 2 Stage 3 Stage % Stage 1 Stage 2 Stage 3 All Intial Items (/0) (/1) Stage M 10.00% 25.0M 5.00% 20.0M 0.00% 15.0M -5.00% 10.0M 5.0M % 0.0M % Item counts exclude Brand switch items, non-invoiced items, compound components and items with above standard co-payment where the transaction is less than the co-payment. Credits and Resubmits have been applied. 14

15 Jul 2012 Sep 2012 Nov 2012 Jan 2013 Mar 2013 May 2013 Jul 2013 Sep 2013 Nov 2013 Jan 2014 Mar 2014 May 2014 Jul 2014 Sep 2014 Nov 2014 Jan 2015 Mar 2015 May 2015 Jul 2015 Sep 2015 Nov 2015 Jan 2016 Mar 2016 May 2016 Jul 2016 Sep 2016 Nov 2016 Jan 2017 Mar 2017 May 2017 Jul 2017 Sep 2017 Nov 2017 Jan 2018 Mar 2018 Jul 2012 Sep 2012 Nov 2012 Jan 2013 Mar 2013 May 2013 Jul 2013 Sep 2013 Nov 2013 Jan 2014 Mar 2014 May 2014 Jul 2014 Sep 2014 Nov 2014 Jan 2015 Mar 2015 May 2015 Jul 2015 Sep 2015 Nov 2015 Jan 2016 Mar 2016 May 2016 Jul 2016 Sep 2016 Nov 2016 Jan 2017 Mar 2017 May 2017 Jul 2017 Sep 2017 Nov 2017 Jan 2018 Mar 2018 Patient Counts 1,600,000 QUARTERLY TREND ANALYSIS Stage 1 Monthly Patient Count Stage 2 Stage 3 Stage 4 1,400,000 1,200,000 1,000, , , , ,000 0 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar Stage 1 8,000 7,000 Stage 2 Stage 3 CPAMS Monthly Patient Count Stage 4 Stage 1 50,000 45,000 Stage 2 Stage 3 ARRC Flag Monthly Patient Count ARRC Residual CRC CDOS Stage 4 6,000 40,000 5,000 35,000 30,000 4,000 25,000 3,000 20,000 2,000 15,000 10,000 1,000 5,

16 Data Sources and Dates APPENDIX Data Source Measure Received Dates for Data PharmHouse Dispensing/Financials 30/04/2018 Claims approved two weeks before Oracle Payments Financials 1/05/2018 Payments processed to date CaseMix Calculation Financials 1/05/2018 Payment Summary for May 2018 LTC Payment file Patient Count 12/04/2018 Payment File for April 2018 CRC Registrations Patient Count 12/04/2018 Complete Current Registration File CDOS Registrations Patient Count 12/04/2018 Complete Current Registration File CPAMS Patient Count 7/05/2018 Patient Numbers for Previous Month 16

17 Pricing Rates (effective from 1 July 2017) Schedule H1. Payment terms 2 Payment calculations for Services and Pharmaceuticals 2.2 Handling Fees and Multipliers and Service Fees APPENDIX (a) The Handling Fee for each Pharmaceutical Dispensed is $1.01. (b) Handling Fee Multiplier The Handling Fee Multiplier means the amount, in respect of the relevant Pharmacy Services (excluding Community Pharmacy Anti-coagulation Management Services), by which the Handling Fee is multiplied, as set out in the table below. PU ID Services Handling Fee Multiplier Quick reference: Handling Fee x Handling Fee Multiplier PH1001 Core Pharmacy Services PH1028 LTC Pharmacy Services PH1029 ARRC Pharmacy Services and CRC Pharmacy Services PH1006 Class B Controlled Drug Services (including Pharmacy Services for Opioid Dependence) PH1010 Aseptic Pharmacy Services PH1025 Sterile Manufacturing Services PH1003 Special Foods Services PH1008 Pharmacy Clozapine Services PH1002 Extemporaneously Compounded Preparations Services PH1004 Named Patient Pharmaceutical Assessment (NPPA) Services A PH1005 Named Patient Pharmaceutical Assessment (NPPA) Services B (c) The Service Fee means the amount in respect of the Core Pharmacy Services, LTC Pharmacy Services or relevant Specific Pharmacy Services, as set out in the table below: Services Core Pharmacy Services LTC Pharmacy Services Service Fee (while Stage 4 Mechanism applies) Where clause 2.3(c) of Schedule H1 applies, the Service Fee shall be as set out in clause H28.2 in respect of Initial Items and as set out in clause H28.3 in respect of Repeat Items. (A) Where clause 2.4(c) of Schedule H1 applies, for the purpose of clause 2.4(c)(i) of Schedule H1 the Service Fee shall be as follows: LTC Pharmacy Services Fee - $21.00 per month (B) Where clause 2.4(c) of Schedule H1 applies, for the purpose of clause 2.4(c)(ii) of Schedule H1 and the Stage 4 Mechanism, the Service Fee shall be as set out in clause H28.2 in respect of Initial Items and as set out in clause H28.3 in respect of Repeat Items. Community Pharmacy Anti-coagulation Management Services $540 per year per Service User, one twelfth of this amount may be claimed per month 17

18 Pricing Rates (effective from 1 July 2017) - Continue Schedule H1. Payment terms 2 Payment calculations for Services and Pharmaceuticals H28.2: Initial items - CORE and LTC Pharmacy Services (a) $4.43 for Core Pharmacy Services; and (b) $4.43 for LTC Pharmacy Services; Number of Initial Items in Prescription Form(s) Dispensed to the Service IRVU User in a single day APPENDIX H28.3: Repeat items - CORE and LTC Pharmacy Services (a) $3.03 for Core Pharmacy Services; and (b) $3.03 for LTC Pharmacy Services Prescription ID suffix for the Repeat Item Dispensed to that Service User RRVU to