Exclusive direct supply danger warning

delivery van wholesaler

Exclusive direct supply leaves patients exposed to single-point failure in PBS supply, says NPSA

If monopoly supply arrangements between manufacturers and pharmacies continue, there will be no back-ups to protect patients from such a point of failure in the PBS supply chain, NPSA Chairman Mark Hooper says.

Speaking at the Eye for Pharma conference in Sydney, Mr Hooper said exclusive-direct arrangements undermined Government policy by restricting the supply of products to one source.

“The danger in allowing monopoly arrangements to continue is that the current supply chain arrangements, which make sure every Australian has reliable, safe, equitable and efficient access to all medicines on the PBS, will no longer work as the Government intended,” Mr Hooper said.

He said the CSO funding pool supports wholesalers in meeting the high regulated standards, such as the distribution of all PBS products to all pharmacies – including low-volume and low-value medicines – and the distribution of the full PBS range to rural and remote postcodes, generally within 24 hours.

The CSO funding pool is available to those who meet the wide range of standards, not just for delivery, he pointed out.

“Ensuring the system works as intended does not limit any direct distribution channels pharmaceutical manufacturers may choose to explore, yet it prevents monopoly or exclusive arrangements,” Mr Hooper said.

NPSA has been working with the Government and Department of Health towards ensuring all aspects of patient access to PBS medicines are regulated to consistent, high standards.

“The CSO isn’t about allowing individual companies to gain more control of the market. It’s about securing a supply chain that works in patients’ best interests. That means ensuring all PBS-listed medicines are available to all CSO distributors at equivalent pricing.

“Any company that wants to undermine the CSO by working around its standards, or delay much-needed certainty is not operating in the best interests of Australian patients, and should not be rewarded for doing so.

“Similarly, any company that wants to compete for the CSO funding pool should be able to register and be held to the same standards and accountability, including the supply of all 6,200 PBS products,” Mr Hooper said.

NPSA says it continues to work with Government and the Department of Health on the current review of the CSO funding pool and the broader objective of meeting the National Medicines Policy in the interest of all Australian patients

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1 Comment

  1. Bruce ANNABEL

    This is a particularly interesting supply chain issue to observe and the outcome is much awaited. The supply chain, as Mal and I wrote about recently, is under enormous pressure including API manufacturers, product manufacturers, generic suppliers, pharmaceutical originator companies and the wholesalers. What we’re seeing is a battle between two of these sectors ie: originator companies and wholesalers both concerned about holding their bottom lines together with the former benefitting from direct supply arrangements that impact on the latter group, the wholesalers. Can both be satisfied?

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