SHPA Response to Consultation on the Community Service Obligation (CSO) Funding Pool Obligations (2018)

Transcription

1 SHPA Response to Consultation on the Community Service Obligation (CSO) Funding Pool Obligations (2018) The Society of Hospital Pharmacists of Australia (SHPA) is the national professional organisation for more than 5,000 pharmacists, pharmacists in training, pharmacy technicians and associates working across Australia s health system. SHPA is committed to facilitating the safe and effective use of medicines, which is the core business of pharmacists, especially in hospitals. For more information, please contact Kristin Michaels, Chief Executive (ceo@shpa.org.au)

2 A Single Entry Point Question 1. Do your organisation and/or stakeholders support the proposed clarification to this requirement? SHPA supports the proposed clarification of this requirement, as feedback from members who work in community pharmacy suggests that there are at times, anomalies in the online ordering portals of CSO Distributors where certain PBS Medicines are unavailable. This may be due to newly-listed PBS medicines on the F1 Formulary, or medicines on the F2 Formulary where a certain medicine s vast number of generic brands potentially are a financial and logistical impost on CSO Distributors. Whilst SHPA is sympathetic to the latter concern, it must be noted that if a pharmacy procurement officer must engage with more than one CSO Distributor to order the medicines required to provide care to their patients, it cannot be reasonably deemed that this is a single contact point. On the second point about the resolution of queries, SHPA believes distributors, including CSO Distributors, should play a more proactive role in the handling of medicines experiencing a shortage or where a shortage is anticipated. SHPA notes that the Australian government is considering legislation that will reform how medicines shortages are reported, communicated and managed, and if passed, expect that all stakeholders involved will be engaged with the new process from 1 January Question 2. What would be the impact of this clarification on your organisation and/or stakeholders if adopted? Hospital pharmacies are increasingly accounting for more of PBS expenditure year on year, with the hospital pharmacy sector accounting for 22% of PBS expenditure in As specialised medicines continue to dominate new PBS-listings, coupled with price disclosure policies that are reducing the price of medicines predominantly dispensed in community pharmacies at below copayment amounts, SHPA believes that hospital pharmacies utilisation of the PBS will continue to grow each year, whilst community pharmacies will experience a decline in real terms. The majority of the SHPA membership are employed in the public and private hospital system. SHPA notes that public hospital pharmacies (or Section 94 pharmacies under the National Health Act 1953) are not covered under the Community Service Obligation (CSO). This means that patients in public and private hospitals do not receive the regulatory support of the CSO to ensure timely supply and are subject to market forces. This is potentially problematic for private hospitals where pharmacy services are provided by a Section 94 pharmacy whose ordering power may not be sufficient to ensure timely supply. Coincidentally, all CSO Distributors also happen to deliver

3 medicines both PBS and non-pbs to public and private hospital pharmacies. As such, given that the successive Pharmacy Agreements of which the CSO is funded under are to support the supply of PBS medicines, SHPA believes that the hospital pharmacy sector (both public and private) has reached a critical mass in PBS utilisation that can no longer be ignored by stakeholders. If the CSO genuinely supports the supply of PBS medicines irrespective of location and pharmacy type a view shared by consumers then it follows that hospital pharmacies should be offered to be included under CSO arrangements and afforded elements such as the Guaranteed Supply Period. This is already an expectation of consumers and patients who receive medicines subsidised by the PBS, irrespective of whether they receive these medicines from a hospital or community pharmacy. SHPA recommends that consideration be given to engaging with jurisdiction procurement expertise and state-based contract agreements, as well as private hospital agencies and SHPA, to explore how hospital pharmacies should be covered under CSO arrangements.

4 B Stocking Question 3. Do your organisation and/or stakeholders support the proposed change to this requirement? Given that the stocking requirement is at a minimum, one Innovator Brand and only one additional Brand, SHPA believes this is already a minimum standard and expectation of pharmacy customers, both in hospital and the community and should not be reduced or relaxed. Thus, SHPA queries the suggested innovation and flexibility in supply arrangements alluded to in the discussion paper and would appreciate more information.

5 Question 4. If applicable, what would be the impact of this change on your organisation and/or stakeholders? This presently does not impact on SHPA due to hospital pharmacies being specifically excluded from CSO arrangements, despite accounting for 22% of PBS expenditure. SHPA notes that the provision of alternative brands can be useful at time of shortages. Refer to Question 2 for more details. Question 5. Specifically, how would removing the stocking requirement affect: The timely supply of CSO products to community pharmacies? A community pharmacy s ability to obtain all brands of CSO products for supply? Not applicable. Question 6. If current stocking requirements were maintained, what would be the impact to your business if specific generic or biosimilar items were required to be included in this range of available stock? This presently does not impact on SHPA due to hospital pharmacies being specifically excluded from CSO arrangements, despite accounting for 22% of PBS expenditure. SHPA supports the broad provision of generic and biosimilar items and they are widely used in hospitals. Refer to Question 2 for more details.

6 C Commercially Acceptable Fees Question 7. Do your organisation and/or stakeholders support the proposed changes to this requirement? SHPA provides in-principle support to changes that do not allow CSO distributors to impose fees or trading terms that circumvent CSO objectives. Question 8. Do the above examples sufficiently clarify the types of fees that are not permissible under the CSO arrangements? SHPA believes that the examples of fees that are not permissible under CSO arrangements are appropriate and just, and do not cause inequity to pharmacies of different sizes and geography and who are covered under CSO arrangements, in particular delivery to regional and rural areas. Anecdotal feedback from SHPA members in regional and rural areas suggest that deliveries by CSO distributors to both community and hospital pharmacies are not as frequent as their metropolitan counterparts and that this impact on patients. Question 9. Are there other types of fees that should not be permissible under the CSO arrangements? If so, please specify the type of fee and provide information supporting your position. Types of fees, and information in support of your position Not applicable.

7 D Minimum Order Quantity for High Volume PBS Medicines Question 10. Do your organisation and/or stakeholders support the proposed changes to this requirement? SHPA supports removing reference to a minimum order value of $15, as this will increasingly cause issues as medicines decrease in price due to price disclosure among other market levers. SHPA supports retention of reference to a minimum order quantity, that being a Shelf Pack, and understands Shelf Pack to refer to one pack of medicine in its PBS quantity. (i.e. one box of 30 atorvastatin 20mg tablets) SHPA is aware that wholesalers and pharmaceutical companies may provide discounted prices if a certain quantity is ordered. Whilst both the singular unit price and discounted unit price is still below the Price to Pharmacist, and thus not circumventing CSO rules, SHPA queries whether this practice is within the spirit of the CSO and the PBS overall, and potentially disadvantages smaller pharmacies, especially those in rural and regional areas. Question 11. What would be the impact of these changes on your organisation and/or stakeholders? This presently does not impact on SHPA due to hospital pharmacies being specifically excluded from CSO arrangements, despite accounting for 22% of PBS expenditure. Refer to Question 2 for more details.

8 Question 12. Should restrictions be placed on pharmacists to limit the number of orders placed within any 24 hour period, or a regular week (7 day period)? Note that this restriction would be specific to orders placed for PBS items under CSO arrangements. SHPA believes there should not be restrictions be placed on pharmacists to limit the number of orders placed within any 24-hour period. This is not a patient-centred approach, and potentially can deprive patients of receiving timely supply of medicines. Putting an arbitrary restriction can also reduce capacity of pharmacies to provide important pharmacy care in crisis situations such as public health events, mass scale emergencies, epidemics and pandemics. SHPA understands that ordering software used by wholesalers will allow pharmacies to make multiple orders at any given time, but these multiple orders are processed as a singular order after a certain cut-off time, thereby improving efficiency of wholesaler operations. SHPA believes that given the generous funding provided to wholesalers via the CSO, it is imperative that CSO wholesalers provide efficiency in their operations to meet the demands of consumers and patients. It is not appropriate that clinician and consumer behaviour should be dictated by CSO wholesaler operations.

9 E New PBS Payment Arrangements Question 13. What would be the impact of this additional reporting requirement on your organisation and/or stakeholders (if applicable)? As stated previously, hospital pharmacies are specifically excluded from CSO arrangements, despite accounting for 22% of PBS expenditure. Despite this, many of the medicines subject to the new PBS payment arrangements that will be trialled from 1 July 2019 are dispensed in hospital pharmacies due to their specialised nature (i.e. chemotherapy, auto-immune conditions) The extra reporting by the CSO on this may not impact hospital pharmacy stakeholders due to our exclusion from CSO, however the overall reporting requirements and reconciliation process, and the potential effect on patient access to medicine and timely reimbursement, is concerning. Hospital pharmacies are already under a significant administrative burden which reduces their capacity to provide the clinical care patients need. SHPA has engaged with the Department of Health on this matter to looks forward to engaging further to provide a resolution that is satisfactory to all stakeholders and does not unintentionally reduce access to vital medicines for patients.

10 F Exclusive Supply Arrangements Context regarding Exclusive Supply Arrangements Question 14. What are the benefits to Government and patients associated with the provision of CSO products through Exclusive Supply Arrangements? Please provide evidence supporting your perspective. Response and Evidence supporting your perspective: As stated previously, hospital pharmacies are specifically excluded from CSO arrangements, despite accounting for 22% of PBS expenditure. Nevertheless, hospital pharmacy stakeholders procure medicines from wholesalers who are concurrently CSO distributors, as well as from pharmaceutical companies under Exclusive Supply Arrangements. Whilst this requires an adjustment to pharmacy procurement practices, advance planning can mitigate any potential disruption to supply and patient access. Given that pharmaceutical companies that engage in Exclusive Supply Arrangements will determine frequency of deliveries, it is difficult to provide a blanket assessment of which arrangement is better, and each medicine requires individual assessment of whether CSO or Exclusive Supply is more beneficial for the patient. Any arrangement which prioritises supplier preferences over clinical requirements risks patient care and is of concern to SHPA. A clear benefit of the Exclusive Supply Arrangements to the Government is the removal of the wholesaler mark-up for that medicine, which provides a saving to Government which can be re-invested into other areas of the PBS or wider Health budget. Question 15. What are the disadvantages and risks to patients that Government should consider if CSO products are supplied through Exclusive Supply Arrangements? Please provide evidence supporting your perspective. Response and Evidence supporting your perspective: Given that pharmaceutical companies that engage in Exclusive Supply Arrangements will determine frequency of deliveries, it is difficult to provide a blanket assessment of which arrangement is better, and each medicine requires individual assessment of whether CSO or Exclusive Supply is more beneficial for the patient. Question 16. How do Exclusive Supply Arrangements support/not support the principles underpinning the CSO arrangements, including ensuring timely, efficient and affordable access to all CSO products? Please provide evidence supporting your perspective. Response and Evidence supporting your perspective: Given that pharmaceutical companies that engage in Exclusive Supply Arrangements will determine frequency of deliveries, it is difficult to provide a blanket assessment of which arrangement is better, or whether Exclusive Supply Arrangements support or not support CSO Principles. If the Government were to want to apply CSO Principles to all PBS medicines, whilst still allowing Exclusive Supply Arrangements for pharmaceutical companies, the Government could

11 consider ensuring minimum service standards for Exclusive Supply Arrangements, which could be a condition of PBS-listing. Question 17. If PBS medicines were required to be only distributed through CSO arrangements, what would be the impact of this change on your organisation and/or stakeholders, or the pharmaceutical supply chain more broadly? If PBS medicines were to be only distributed through CSO arrangements, the impact to hospital pharmacy stakeholders would be profound, given that presently, hospital pharmacies are specifically excluded from CSO arrangements, despite accounting for 22% of PBS expenditure. As such, given that the successive Pharmacy Agreements of which the CSO is funded under are to support the supply of PBS medicines, SHPA believes that the hospital pharmacy sector has reached a critical mass in PBS utilisation that can no longer be ignored by stakeholders. If the CSO genuinely supports the supply of PBS medicines irrespective of location and pharmacy type a view shared by consumers then it follows that hospital pharmacies should be offered to be included under CSO arrangements and afforded elements such as the Guaranteed Supply Period. This is already an expectation of consumers and patients who receive medicines subsidised by the PBS, irrespective of whether they receive these medicines from a hospital or community pharmacy. In particular SHPA is concerned about the impact of exclusion from CSO arrangements for smaller hospitals, regional and remote facilities and private hospitals with Section 94 pharmacies. SHPA recommends that consideration be given to engaging with jurisdiction procurement expertise and state-based contract agreements, private hospital representatives and SHPA to explore how hospital pharmacies should be covered under CSO arrangements. Question 18. If PBS medicines were required to be made available to all pharmaceutical wholesalers for distribution to community pharmacies, what would be the impact of this change on your organisation and/or stakeholders, or the pharmaceutical supply chain more broadly? Not applicable.

12 CSO payment for PBS Medicines distributed through Exclusive Supply Arrangements Question 19. If the supply of Exclusive Supply products were eligible for CSO funding pool payments, what would be the impact of this change on your organisation and/or stakeholders, or the pharmaceutical supply chain more broadly? This presently does not impact on SHPA due to hospital pharmacies being specifically excluded from CSO arrangements, despite accounting for 22% of PBS expenditure. Whilst allowing Exclusive Supply products to be eligible for CSO funding pool payments may be well-intentioned, proper cost-benefit analysis is required to ensure that this is a worthy investment that remedies any potential or actual deficiencies in pharmaceutical companies engaging in Exclusive Supply Arrangements. SHPA is currently not acutely aware of any actual deficiencies in the Exclusive Supply Arrangements that would warrant CSO funding pool payments to be extended to these medicines as a solution. Question 20. If the supply of Exclusive Supply products were eligible for CSO funding pool payments, what payment rate (if any) should Exclusive Supply products be eligible for? Payment rate for Exclusive Supply products as a percentage value: Not applicable. Not applicable.

13 Visibility of PBS Medicines distributed through Exclusive Supply Arrangements Question 21. Do your organisation and/or stakeholders support this proposed requirement? In principle, SHPA supports transparency and visibility of medicines distribution through the supply chain, as increased information and data can assist all stakeholders to become more efficient, and ultimately provide timelier access to medicines for patients and consumers. Such efforts would also greatly improve the coordination of activity in response to any actual or potential medicines shortages. Question 22. If CSO Distributors were required to report any supply of Exclusive Supply products, what would be the impact on your organisation and/or stakeholders? This presently does not impact on SHPA due to hospital pharmacies being specifically excluded from CSO arrangements, despite accounting for 22% of PBS expenditure. Refer to Question 2 for more details. Question 23. How else might the Government s visibility of the distribution of Exclusive Supply products be improved, either within or outside of the CSO arrangements? Response: Further to the response to in Question 21, SHPA believes visibility, transparency and access to data of CSO operations in the context of wider medicines distribution, both to community and hospital pharmacies, will empower the Government to ensure efficiencies in PBS medicines distribution. The CSO funding pool is worth approximately $1 billion over five years, which in itself represents over 10% of annual PBS expenditure, however SHPA is unaware of any independent evaluation of whether this $1 billion investment in the CSO, is the most efficient way to ensure reliable and timely medicines supply to patients. SHPA is aware that there has been commentary by stakeholders over the years that due to competition in metropolitan areas, market forces dictate that community pharmacies in metropolitan areas will receive medicines within the Guaranteed Supply Period irrespective of CSO obligations. SHPA is aware that these stakeholders believe it should be considered if CSO funding pool should be restricted to areas where market forces may disadvantage timely supply, such as rural and regional areas, where a lower number of pharmacies, smaller orders and increased transport costs, can detract from timely supply of PBS medicines.

14 G CSO Compliance and Regulation Question 24. Are there any areas of the current CSO Compliance Requirements and Service Standards which could potentially be removed or be streamlined for efficiency gains? Response and Detailed information: This presently does not impact on SHPA due to hospital pharmacies being specifically excluded from CSO arrangements, despite accounting for 22% of PBS expenditure. Refer to Question 2 for more details. SHPA recommends that consideration be given to engaging with jurisdiction procurement expertise and state-based contract agreements to explore how hospital pharmacies should be covered under CSO arrangements and how distribution of PBS medicines can be streamlined for efficiency gains. H Other Comments Question 25. Are there any other matters that you consider to be relevant to the Department s review of the CSO obligations? Response and Detailed information: Not applicable.