Fix hep C supply problems now: Quilty


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Pharmacies are facing unprecedented problems supplying new hepatitis C treatments to patients, says Guild executive director David Quilty— and they need to be fixed urgently.

In this week’s edition of Guild newsletter Forefront, Quilty warns that there is a real risk that patients with chronic hepatitis C may not be able to get timely access to the new medicines unless these problems are addressed quickly.

“On 1 March, four hepatitis C medicines were listed on the PBS:  Harvoni, Sovaldi, Daklinza and Ibavyr,” Quilty writes.

“On 1 May, it is expected that the combination medicine, Viekira PAK, will also be listed.

“As a result of these listings, some 230,000 Australians living with hepatitis C have for the first time affordable access to a cure for this life-threatening disease.”

When Health Minister Sussan Ley announced the listings late last year, she expressed hope that Australia would not only see a stop to the spread of the virus, but its eventual eradication.

 

“The Guild has warmly welcomed these listings and congratulated the Federal Government for making these medicines available through the PBS,” Quilty writes.

“However, they are very expensive.  The price to pharmacy for each monthly dose of Harvoni is $22,136.61 + GST and for Sovaldi is $19,367.69 + GST.

“Never before has the pharmacy supply chain faced the prospect of dealing with such very expensive medicines at such high levels of patient demand.”

He points out that current remuneration and supply chain arrangements are not up to the challenges of supplying these medicines to patients on a timely basis.

“The maximum mark-up for wholesalers is $69.94 and the maximum Administration, Handling and Infrastructure Fee for pharmacies is $70,” Quilty says.

“At 0.28% of the cost of a month’s supply of Harvoni, these remuneration levels are insufficient for pharmacies and wholesalers to bear the cost and the risk of these very expensive medicines.

“Notwithstanding that neither wholesalers nor pharmacies knew about the high costs for the future listing of these medicines when the Sixth Community Pharmacy Agreement was negotiated, it is unlikely the Government will increase the levels of remuneration in the foreseeable future.”

But at most, these remuneration issues will be considered by the Pharmacy Remuneration and Regulation Review, which is not due to report to the Minister for Health until March 2017.

“This timeframe is totally out-of-kilter with the urgent need to address this problem,” Quilty writes.

“Around Australia, pharmacies are making clear that, as much as they want to dispense these medicines to patients, they simply cannot afford to put their businesses at risk by doing so.

“At the same time, wholesalers are saying they cannot afford to take on the risk of the very high debts associated with these medicines.”

To make matters worse, the demand for these medicines will rise significantly in coming weeks as existing patients seek to have their repeats dispensed, while at the same time new patients will be commencing therapy.

“In these circumstances, the easiest and fastest solution is to ensure that there are sufficient trading terms available through the supply chain to align with the Medicare and GST reimbursement timeframes for pharmacies,” says Quilty.

He suggests that a pseudo-consignment model be put in place.

“Under this model, pharmacists would order these medicines from their wholesaler once they receive a script from a patient,” he says. “Under the CSO, the medicine would be supplied to the pharmacy within one working day to be dispensed to the patient.

“The wholesaler would not require payment until the pharmacy has been given sufficient time to be reimbursed by Medicare for the cost of the medicine and by the ATO for the GST on the medicine.

“In turn, the medicine manufacturer would not require payment until the wholesaler has been given sufficient time to be paid by the pharmacy.”

Quilty also called for reasonable returns policies to prevent pharmacies being left with very expensive medicines when patients do not collect their prescriptions.

He says the Guild is working with manufacturers and wholesalers, strongly encouraging them to put this model in place by 1 May.

“The Government, for its part, needs to be ready to intervene if the industry fails to deliver a solution by the deadline,” he warns. “It also needs to ensure that Medicare and the ATO are reimbursing pharmacies on a timely basis and their systems do not ‘red flag’ pharmacies because of large increases in claims due to these medicines.”

 

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7 Comments

  1. pagophilus
    21/04/2016

    Sorry, what’s the problem? Patient comes in with script. You put it through the computer to make sure you’ll get paid. Then you order it, receive it next day, then give it to the patient. What’s this nonsense about $70 not being enough?

    • voiceofreason
      22/04/2016

      Because you’d be better to take the $20,000 and put it in a short term deposit account – you’d get a better return. It’s just a ridiculously low mark-up.

      • pagophilus
        22/04/2016

        You wouldn’t get a better return in the time frames involved. How long between dispensing/claiming and receiving the markup?

        I think this whole story is a beat-up.

        • Devlin
          23/04/2016

          Seems Pagophilus isn’t the one betting his / her $20 000 on this.

  2. Leah Rosevear
    21/04/2016

    The problem pagophilus is that the pharmacy may have to pay the $20,000 approx. before they are reimbursed by the PBS. And that is just for one drug for one person.

    • Julie Grint
      09/05/2016

      Leah, There is a definite cash flow problem here. Who has a lazy $20,000, $40,000…….$100,000 sitting in their business account? If you need to dip into your overdraft to fund these very expensive drugs than I am sure that $75.00 does not cover the interest incurred. If by a great stroke of misfortune the drug is ordered in and it is damaged in transit and is not fit to be dispensed who bears the loss the Pharmacy/Pharmacist or the Wholesaler/manufacturer or the Government???

  3. Leah Rosevear
    21/04/2016

    The pseudo-consignment model suggested above by Mr Quilty is a good plan.

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