Dilemma delayed


43281150 - medicines with money inside

Under fire hospital pharmacy budget measure postponed for three months

Plans to align PBS wholesale mark-up arrangements between hospital and community pharmacy have been pushed back for three months.

The proposals, included in the 2019/20 Federal Budget have come under fire from the hospital pharmacy sector for the impact they will have on public hospitals and pharmacist jobs.

Two new legislative measures, covering pharmaceutical benefits supplied by private hospital, and by public hospitals, respectively were registered on the 1 July 2019.

The measures, which will changes wholesale mark-up arrangements for PBS Section 85 medicines dispensed in public and private hospitals were originally due to come into effect on 1 July, but this has now been pushed back to 1 October 2019 to “to provide additional time for software vendors to effect relevant software changes and provide a smooth transition for the sector”.

“The purpose of the amending instruments is to align the PBS wholesale mark-up arrangements, as applied to ready-prepared pharmaceutical benefits for PBS Section 85 medicines dispensed in public and private hospitals, with the wholesale mark-up arrangements in the community pharmacy setting,” a Department of Health release said.

“These changes were announced in the 2019-20 Budget and will ensure parity of wholesale mark‑up rates across the range of PBS dispensing environments”.

However, the proposed Budget measure had been criticised by the Society of Hospital Pharmacists Australia (SHPA), as ‘slashing’ the mark-up paid to public and private hospitals to support treatment with PBS medicines and medicines safety activities – from 11.1% to 7.52%.

“Information provided by the Department of Health indicates the funding cut will remove $44 million from Australian hospitals annually, the majority from public hospitals,” SHPA Chief Executive Kristin Michaels.

This would essentially cutting millions of dollars from hospital budgets and imperil up to 500 jobs, the organisation said.

Under the new provisions, where the ex-manufacturer price for the relevant quantity is $930.06 or less, the mark-up for the pack quantity is 7.52% of the approved ex-manufacturer price or the proportional ex-manufacturer price, as applicable for the pack quantity.

Where the ex-manufacturer price for the relevant quantity is more than $930.06:

  • if the relevant quantity and the pack quantity are the same, the mark-up for the pack quantity of the brand of the pharmaceutical item is $69.94,
  • if the relevant quantity and the pack quantity are not the same, the mark-up is worked out by multiplying $69.94 by the quotient of the pack quantity and the relevant quantity.

The Determination inserts definitions for a number of terms which are consistent with existing definitions in the Act and align with those used for dispensing in community pharmacies. This includes determined quantity of a listed brand of a pharmaceutical item and maximum quantity of a brand of a pharmaceutical item. 

The Department of Health said the delay in implementation followed consultations with relevant groups, including the SHPA, PSA and Pharmacy Guild, and would “provide additional time for software vendors to effect relevant software changes and provide a smooth transition for the sector”.

 

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