Risk share debate heats up

The dispute between the Pharmacy Guild of Australia and the Federal government over 6CPA risk sharing agreements seems set to roll on into 2017

Articles in Fairfax media sources last weekend said the Guild had embarked on a “lobbying blitz of Coalition backbench MPs” to pressure Prime Minister Malcolm Turnbull and Health Minister Sussan Ley into changing course.  

A spokesperson for the Guild told AJP that they had arranged for a number of pharmacists from all states to visit Canberra to talk to MPs during the last sitting of Parliament.

“The aim was to touch base with as many MPs as we could, from all parties, but especially Coalition MPs, so we could get across our view that upholding the terms of the agreement was a matter of trust, and that trust is in jeopardy given the current situation,” the spokesperson said.  

Speaking in Canberra in November at the Guild’s annual Parliament House dinner, PM Malcolm Turnbull said Minister for Health Sussan Ley was working with the Guild “to reconcile these issues in a timely manner”. 

However, there is as yet no sign of resolution and industry sources say the dispute is likely to roll on into 2017.

The dispute relates to the Guild’s demand for an increase in dispensing fees to compensate for lower than expected PBS/RPBS volumes in 2015-16, the first year of the 6CPA.

These volumes were around 2.1% below what was forecast and the Guild wants a $0.26 per prescription increase in the dispensing fee to compensate pharmacists for the negative impact—a total of around $80 million, according to industry newsletter Pharma Dispatch.

The Guild argues that this money was factored into the total 6CPA expenditure, and that clause 5.4 of the agreement requires an annual reconciliation of pharmacy and wholesaler remuneration, based on actual versus forecast PBS/RPBS prescription volume.

The reconciliation was to be based on a “materiality threshold” to be negotiated by May this year. However, this fell in the caretaker period before the 2016 federal election, and the reconciliation fell into abeyance.

While the Guild would not comment in detail on the latest reports, national president George Tambassis said at the Parliament house dinner that: “Like all risk shares, it cuts both ways. The risk share protects the government fiscally against a blowout in dispensing expenditure.”

“It also provides the certainty that pharmacies need to employ staff and continue investing in their small businesses.

“The actual prescription volumes from the first year of the agreement reveal a material shortfall. Community pharmacies have incurred these fixed dispensing costs and need to be reimbursed for this shortfall.”

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