Good outcome for the sector, although many measures were already in train

Pharmacy groups are applauding the Federal government and Health Minister Greg Hunt for delivering a good Budget for the profession.

Measures to solve the ongoing risk share impasse and deliver on 6CPA professional service program promises are highlights of a Budget that was more relevant to pharmacy than many in recent years.

The Budget saw the government announce the long-expected agreement with the medicines industry – both Medicines Australia and the Generic and Biosimilar Medicines Association (GBMA), although the existing CPA seems to have been conveniently added to a list of landmark agreements being trumpeted by the Minister.

Minister Hunt lauded the “partnerships” the government has struck with pharmacists, GPs, specialists and the medicines sector.

He highlighted the $1.8 billion saving to the cost of medicines as a centrepiece of a campaign to “make medicines more affordable”. 

The agreed, one-off, price reductions to “certain medications” listed on the PBS for 10 and 15, plus the regular price disclosure round would increase use of generics and biosimilars, the minister said.

An immediate outcome was the listing of Sacubitril with Valsartan (Entresto) for patients with chronic heart failure, at a cost of $1.8 billion.

Minister Hunt said “the agreement with the Pharmacy Guild will deliver medicines reform and an $825 million investment to strengthen patient outcomes and community pharmacy.”

“Australians will now have access to a wider range of services from their community pharmacy, including home visits to eligible patients to help them manage their medications.”

However, the listed amount includes $600 million already promised to pharmacy in the 6CPA for professional service programs, as well as $225 million earmarked for compensation for lower-than-forecast prescription volumes. 

This risk sharing issue had dogged relationships between the government and Pharmacy Guild since mid 2016, and will be delivered through an increase in the Administration, Handling and Infrastructure (AHI) fee.

Key Budget measures

  • $225 million over 3 years to community pharmacists and pharmaceutical wholesalers as a result of lower than forecast script volumes
  • The $600 million CPA contingency reserve committed to government-funded Dose Administration Aids ($340 million), staged supply ($80mil), expansion of MedsCheck/Diabetes MedsCheck ($90mil), HMR, including follow-up services ($60 mil) and medication management programs in health care homes ($30 mil)
  • S1.2 biillion for new and amended PBS listings from 2016-17 to 2020-21
  • Extension of 5% statutory price reductions for F1 medicines by two years to 2022
  • A one-off 10% price reduction for F1 medicines listed on PBS for 10-14 years on 1 June 2018, and then each April as medicines reach their 10-year anniversary    
  • A one-off 5% price reduction for F1 medicines PBS listed for 15 or more years on 1 June 2018, then subsequent Aprils as medicines reach this anniversary

Click here for the Pharmacy Guild’s response to the Budget

Click here to see the AMA’s response