No new exclusive direct supply after 2020

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The National Pharmaceutical Services Association has welcomed new CSO operational guidelines, while a tender has opened for access to the CSO funding pool

The new CSO deeds prohibit new exclusive direct supply arrangements after 2020, a move which NPSA chairman Mark Hooper welcomed.

He also said he was pleased to see some manufacturers already transitioning away from the model.

“The recent announcement by AstraZeneca to transition away from exclusive-direct arrangements from 1 February 2019 is good news for patients because it means pharmacies can stock medicines from more than one supplier,” said Mr Hooper.

“However, we still have some concerns about the impact of existing exclusive-direct arrangements on the sustainability of the CSO model.

“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,” Mr Hooper said.

The NPSA and the Pharmacy Guild have consistently spoken out against exclusive direct supply, with Guild national president George Tambassis telling a May conference that the Guild is “100% against” the model.

“It should be a condition of PBS medicines to play in a competitive market. The pharmacists and supply chain want to look after the medicines but you can’t have exclusive direct supply in a country like this,” he said at the time, calling on the Government to use the CSO review to make a decision on the matter.

Now, the Guild has welcomed the fact that exclusive supply arrangements are being discouraged and gradually phased out under the CSO requirements.

National president George Tambassis has said the Guild thanks AstraZeneca for addressing one of the owner organisation’s key concerns regarding exclusive direct arrangements.

“Our members will now have choice which we welcome and there are now built in redundancies in the supply chain to ensure patients have access to these important medicines,” he said.

Mr Hooper says that the new arrangements uphold the intent of National Medicine Policy, while providing certainty for wholesalers, pharmacies and ultimately patients.

“The CSO funding pool supports wholesalers in meeting the high regulatory 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,” he said.

Meanwhile the Department of Health has opened an Invitation to Apply to identify and appoint pharmaceutical wholesalers to participate in the CSO Funding Pool arrangements and access CSO funding, based on their capacity and capability to meet key CSO service obligations related to the distribution of PBS medicines and National Diabetes Services Scheme products. 

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