Setting the record straight


delivery van

Pharmacy’s “critical business partners” tell the true story of their value to the healthcare system as 7CPA approaches  

Pharmacy, and indeed the healthcare system, could not survive with the service provided by Australia’s pharmaceutical wholesalers, the National Pharmaceutical Services Association (NPSA) says.

NPSA recently presented data that showed the value they represent to the PBS. The presentation, at the 2019 WA Pharmacy Forum, “set the record the straight on the true cost and value of the work CSO wholesalers do in ensuring all Australians have equitable access to medicines”.

The organisation wants all stakeholders to understand the importance of their role, and the pressures they face to fulfill this role, as 7CPA negotiations get underway.

According to the data, CSO wholesalers account for just 6.5% of total PBS spend, but “uphold a commitment to Australian patients on behalf of the Government to deliver the full range of PBS medicines anywhere in the country and generally within 24 hours”.

“We are the critical business partner for Australian community pharmacies through providing approximately $1.7 billion in working capital, which is support that the industry could not function without,” said NPSA chairman Mark Hooper.

“Ultimately, as we approach 7CPA negotiations, we want all industry stakeholders to understand the huge value for money we provide Government, the significant efficiencies and support we deliver for pharmacy and what it takes to deliver on our commitment of providing all Australians with access to the full range of PBS medicines and generally within 24 hours.”

In order to fulfil this commitment, CSO wholesalers buy, hold, range, pick, pack and deliver all 6,200 PBS products, which requires significant investment in technology and infrastructure, Mr Hooper said.

Indeed, since 2014, NPSA Members had invested more than $500 million in the supply chain “to ensure that Australia’s medicines sector remains among the best in the world for productivity, efficiency and service delivery,” he said.

Despite this, many stakeholders didn’t see the full value or complexity of the wholesalers role, he believes. 

“There is still a widely held view in the industry that CSO wholesaling is simply a matter of moving boxes and that doing so costs the Government too much money,” Mr Hooper said.

“The reality is that the combined cost of wholesale margins and the CSO accounts for just 6.5% of the total PBS spend and our role in the supply chain goes far beyond a matter of just simply moving boxes.” 

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