What was the government’s response to the King Review?

Health Minister confirms the government has rejected proposals of generic medicines tendering and machine dispensing, but has not ruled out keeping the $1 discount or abolishing HMR caps as yet

In a highly anticipated move, Health Minister Greg Hunt today announced the Federal Government has released its response to the Review of Pharmacy Remuneration and Regulation.

The Pharmacy Guild of Australia welcomed the response, saying pharmacists “appreciated the positive tone of the Minister’s approach to the Review and to the future of pharmacy”.

“The Guild looks forward to continuing our close dialogue with the Government on all matters to do with the sector and community pharmacy’s role,” National President George Tambassis said.

We take a look at some of the responses the government has made to the Review of Pharmacy Remuneration and Regulation.

High-cost medicines

The government has accepted the proposal to investigate alternative payment arrangements for the supply of high-cost PBS medicines from community pharmacy to support their continued availability within the community.

While a specific cap won’t be placed on the cost of PBS medicines at the moment, the government says this will be considered further in consultation with the pharmaceutical supply chain.

“Arguably the most important decision that the government has taken is to accept the proposal for a change in the way that high-cost medicines are delivered, and that means it’s about changing the rebate arrangements as of the 1 July 2019 in a staged approach through to the 1 July 2020,” Minister Hunt told media at the APP conference on Thursday morning.

“What that means very simply is that it will assist in three ways: reducing the cash flow carrying costs for pharmacists, increasing the capacity of the 22% of pharmacists who are not involved in high-cost medicine PBS provision to be part of that program, and also it allows the government to make additional funds available for new and earlier high-cost medicine listings. So that’s a tremendously important initiative.

“For example, if [a pharmacist] had to pay upfront to get a medicine and let’s say some of the high-cost medicines in relation to hep C could be $20,000 a unit, the cost that they would have to pay upfront will be in some cases significantly decreased, which means that they will have less of a cash flow impact on them.

“And that’s something that we’ve worked on with Medicines Australia, something that we’ve worked on with the Pharmacy Guild, and in turn it’s allowed us to be in a position to invest more funds into new medicines.

“The net payment arrangements will be the same, but the upfront payments for pharmacists will be less.

“There will be significant additional funds for new medicines in the budget.”

Generic medicines tendering

“We will be maintaining the current system,” said Minister Hunt in announcing that the government had rejected the proposal that government should hold a tender for the PBS listing of generic versions of an originator medicine that comes off patent.

“The current price disclosure program has worked well to reduce the price of PBS medicines which are subject to competition, ensuring better value for money for consumers,” states the government in its response to the Pharmacy Review.

Machine dispensing

One of the Pharmacy Review recommendations was that the government should trial the use of machine dispensing in a small communities that are not currently served by a community pharmacy.

The government noted that the supply of PBS medicines via machine dispensing would require further regulatory consideration by all Australian governments, and may otherwise limit patient access to direct pharmacist advice and support.

Minister Hunt confirmed that the government had rejected this recommendation in his address at APP.

“There’s a very important role of technologies but … the nature of that face-to-face interaction is fundamental, that is an important long-term decision that this government has taken and will stick by.”

$1 discount

Health Minister Greg Hunt says at this time the Government will not be abolishing the $1 discount, which came into effect on 1 January 2016.

The Government says it will further consider this recommendation once the $1 Discount Review has been completed.

“We will not be making a decision on the dollar discount,” Minister Hunt told APP2018 delegates.

“We made a commitment to the Guild that we would review it, but it is a balance.

“I have a fundamental duty about patient cost but I will come back to that. What we’re doing is progressing to a model that’s about increasing sustainability of pharmacy and not bringing in new threats and new challenges.”

The most recent actual figures (in the twelve months to 30 June 2017) show that 29% of all PBS and RPBS scripts were discounted by up to $1, with 90% of all discounted scripts being for PBS concessional patients.

Digital health

The Government has accepted the recommendations regarding electronic prescriptions and electronic medications records.

“This will something that will help with the healthcare of Australians for the decades going forward, it’s a huge opportunity to deliver patient outcomes,” says Minister Hunt.

Despite pushback from some healthcare sectors, he says uptake is positive.

“We’ve been working very closely with the AMA and the RACGP, the Australian Digital Health Agency is working directly with them. The latest advice I have is that by the end of year we’re expecting 75% or thereabouts of general practices and 75% of hospitals to be directly enrolled in the uploading of data to the MHR.

“That’s a lot faster at a much higher scale than we were anticipating. That’s come about because of the Compacts that we struck a year ago, with pharmacy, with Medicines [Australia], with the AMA, the RACGP, the Generic and Biosimilar Medicines Association,” he told media.

“Those compacts are delivering a much faster take-up of the MHR from the providers as well as giving us a pathway for the patients.”

Community pharmacy programs

The Government accepted-in-principle the recommendation that programs offered by community pharmacy should be based on evidence of clinical and cost-effectiveness and the health benefits they provide to the community, and that these may or may not involve the Australian Government paying for some or all the costs of the service to some or all patients.

It noted the $600 million in funding to community pharmacy for new and expanded existing community pharmacy programs delivered under the 6CPA.

“The overall contribution of the Pharmacy Compact was about $800m – $200m for dispensing fees, and $600m that was released for pharmacy professional services,” says Minister Hunt.

He urged delegates to take advantage of the programs.

“The funds are there are I strongly to encourage you to join in and participate in these programs.”

Minister Hunt also highlighted the expansion of services under the Pharmacy Trial Program.

“We are moving forward within that, today I want to announce a further trial in SA for aged care residents who are at risk of deterioration for prolonged use of certain medicines. Five hundred residents will be part of the trial.”

Following that, he says they will be “bringing forward the Chronic Pain MedsCheck and that will come in the coming weeks, that will round out those coming programs.”

Total funding of up to $1.26 billion has been made available to fund a combination of continuing, new and expanded community pharmacy programs and services, according to the government response.


While the government notes the recommendation to abolish caps on Home Medicine Reviews (HMRs) and fund the program through the MBS, it is still waiting on the results of an assessment into the effectiveness of the program.

“This will inform Government’s consideration of payments provided to pharmacists for the provision of HMRs, in connection with the negotiation of future CPAs,” it says.

Remuneration for services

Panel members Professor Stephen King and Jo Watson diverged considerably from fellow panel member Bill Scott when it came to remuneration.

Mr Scott insisted that the dispensing fee should be an agreed fee that represents the cost of maintaining a viable community pharmacy network in Australia and which meets the requirements of the National Medicines Policy and the expectations of the Australian community and government.

Meanwhile Professor King and Ms Watson put forward that the remuneration for dispensing paid by the Australian Government and consumer co-payments to community pharmacy should be based on the costs of dispensing for a best practice pharmacy.

The government noted the divergent views of the panel members, highlighting that prior to negotiating future CPAs it will “work collaboratively with the Guild and other key stakeholders to identify, and agree, the relevant data required to determine the appropriate scheme of remuneration for the dispensing of PBS medicines and other related services provided by community pharmacy”.

Regarding remuneration for clinical health services, the Government highlighted a concern of duplication.

“Any reform to extend a pharmacist’s role to a clinical service that could potentially duplicate an existing MBS funded service otherwise provided by a general practitioner or nurse practitioner in the primary care setting would need an appropriate assessment by the Medical Services Advisory Committee (MSAC),” it said.

Access to medicines programs for indigenous Australians

The Government accepts this recommendation that the Australian Government should ensure all benefits from the section 100 Remote Area Aboriginal Health Service Program and the Closing the Gap PBS Co-Payment Measure are accessible to Aboriginal and Torres Strait Islander people living in rural areas.

However it “notes that [the recommendation] poses a number of policy and implementation issues that would need to be considered further.”

More to come on the Government response to the Pharmacy Review tomorrow.

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