AJP investigates the unprecedented medicine stock outs during February and March this year
Small Pharmacies Group (SPG) has challenged the National Pharmaceutical Services Association (NPSA) claim that increased demand caused by the COVID-19 pandemic saw volumes up more than 70% in March compared to the same time last year.
PBS supply chain issues were not necessarily driven directly by consumer demand, they have argued, pointing to PBS data from Services Australia.
Services Australia processed 17,625,019 PBS prescriptions in March 2019 and virtually the same number in March 2020 – 17,692,444.
There was no significant upswing in February either, with 16,037,571 scripts processed in February 2019 and 16,283,880 in February 2020.
“While pharmacies certainly saw an increase in demand for certain products such as children’s paracetamol and medicines for respiratory related conditions such as Ventolin/Asmol (available both with/without a prescription), the PBS data is not consistent with an overwhelming spike in consumer demand that could explain the unprecedented shortages witnessed by many pharmacies across hundreds of PBS lines,” said SPG.
It pinned the blame of medicine stock outs on the CSO wholesaler distribution system, arguing it is “not fit for purpose”.
“Where did all the stock go?” queried SPG. “Exceptionally large orders must have hit the system to cause such significant maldistribution of PBS stock and inequity of access for so many weeks following.”
In response to SPG’s comments, an NPSA spokesperson told AJP: “We do not intend to respond to this latest in a series of media releases making inaccurate and unsubstantiated claims about the supply of medicine to Australians.”
It has previously said that there have been shortages of certain medicines and fluctuations in supply which were being constructively managed.
“Like all international jurisdictions, Australia is feeling the effects of unprecedented international freight disruption,” said NPSA last month.
“In early March following panic buying and a surge in demand, the NPSA was proactive in initiating adjustments to the CSO Deeds and implementing measures to help manage the volatile early response to the pandemic and preserve medicine availability,” said NPSA Chairman Mark Hooper.
Industry analyst Bruce Annabel said that there was certainly a spike in volume in March, particularly during the last week of the month.
“That was probably a record for majority of pharmacies and it continued into April before subsiding,” he told AJP.
However he added one would need to view the April PBS numbers – which are not yet available – to get an accurate picture as these would include the last week of March.
“Health consumers were stocking up through having multiple repeats filled and many taking advantage of Regulation 24 to maximise the PBS scripts they could have filled,” said Mr Annabel, a consultant with Pitcher Pharmacy Services who has 35 years’ experience in the community pharmacy space.
“The rise in March warehouse withdrawal volumes were caused by the hoarding, pharmacies replenishing stocks as best they could plus stocking up in anticipation of high April demand and/or worries about running out of stock.”
In the weeks prior to dispensing limits being imposed on 19 March, AJP ran a poll asking if pharmacists had experienced stockpiling by patients.
Among 352 respondents, 82% said “Yes, we’ve had patients asking for more scripts than the usual month’s worth of dispensing.”
A further 68% said “Yes, we’ve had patients stocking up on OTC medicines.”
Meanwhile last month, SPG reported that the majority of its members were having trouble obtaining PBS medicines with numerous out of stocks and items on backorder.
“The fact is that small and rural pharmacies are still feeling the ripple effects of bulk buying by large pharmacy players back in early March and no longer have any confidence that anyone really has a handle on the stock situation let alone that it is being managed in an equitable manner,” they said.
The extraordinary demand driven by fearful consumers who deluged pharmacies created enormous trauma throughout the supply chain.—Bruce Annabel, industry analyst
However the issues may reach beyond small and rural pharmacies.
One anonymous pharmacy proprietor based in metropolitan Sydney told AJP that among the three independent pharmacies and a warehouse pharmacy in their area, they were all able to obtain different stock.
“I was telling one patient a medicine was coming in but they were on a list. They took their script off me and went to another pharmacy in the area and got that same drug,” the pharmacist said.
“It’s bizarre that in a small community, one pharmacy out of four is holding stock of a particular drug that no one else can have. The drug I was looking for was one that everyone was looking for.”
The pharmacy that ended up having stock of the drug was not the large warehouse pharmacy in the area, but another independent one.
“If you’re first line you may have had preference. I wouldn’t blame the wholesalers, but particular manufacturers that manufacture a specific molecule, that may be how they’ve been preferenced,” the pharmacist said.
“I rang the manufacturer and said, ‘I don’t think you realise, if you’re favouring first-line people that deal with this wholesaler or with that brand, or independent versus a brand, that actually really fragments the supply of medicine and the face and trust that people have in their pharmacies.’ They said, ‘we’re not doing that’, but there’s unexplained things that have been happening,” said the pharmacist.
Mr Annabel said that while some pharmacies that couldn’t get items such as salbutamol inhalers through their first-line supplier, they could sometimes source them through a second-line supplier.
“However, many wholesalers prioritised first-line customers while second-line accounts struggled to get attention,” he said.
Based on his general observations, Mr Annabel believes nobody was discriminated against during what he describes as “supply chaos” driven by the enormous demand placed by chemists on the wholesaler sector during the COVID-19 pandemic.
“All pharmacies including the large discount pharmacy chains experienced the demand shock that manifest in major stock outs due to a stressed supply chain,” he said.
“I know of many pharmacies, including warehouse pharmacies, that found themselves running out of certain stock lines. It was difficult for everyone, particularly the wholesalers. I think the key point here is the extraordinary demand driven by fearful consumers who deluged pharmacies created enormous trauma throughout the supply chain.
“And until the dispensed supply limits were put in place, the system simply couldn’t cope with such an unprecedented demand, despite the huge investments made in recent times by wholesalers in very efficient distribution systems.”