Has the interim report considered long term supply chain impacts?

Medicines Australia welcomes the release of the Interim Report of Pharmacy Review but has concerns about some proposals that could damage the National Medicines Policy and have negative impacts for the manufacturers of medicines, distributors, community pharmacies and patients.

Medicines Australia Chief Executive Milton Catelin said, “The innovative pharmaceutical industry believes it is important to always be looking to improve processes that relate to the supply of medicines to Australians, however, any change must be done with the full support and confidence of the companies that make the medicines, the wholesale distributors and the pharmacists who dispense them.”

“A number of ideas put forward in the interim report are of real concern to Medicines Australia as they are either ineffective, could potentially diminish medicine quality or lead to potential medicines shortages for patients,” said Mr Catelin.

These include:

  • Reducing competition in off-patent medicines by tendering for a maximum of five suppliers (four generic manufacturers and the original branded supplier) per medicine.
  • Changes to chemotherapy compounding payments and minimum standards that would allow non-TGA approved compounding facilities to offer chemotherapy compounding.
  • Removal, retention or replacement of the Community Service Obligation (CSO)

Tenders are already utilised by Australian hospitals for off-patent medicines and have proven to be problematic with acute shortages of medicines becoming more common.

“Any move towards a tender-based PBS would be a retrograde step that would limit choice for consumers, increase the risk of medicines supply shortages and could ultimately lead to higher long-term average costs for off-patent medicines on the PBS.”

“The report does not take into account recent reforms negotiated between Medicines Australia and the Government that will have a significant impact on reducing the prices paid for medicines that will see generics present even greater value to patients in the future,” said Mr Catelin.

The suggestion to remove or replace the CSO was criticised by Medicines Australia during consultation last year.

“The review suggests that manufacturers may be charged with more broadly guaranteeing supply timeframes to community pharmacies. Unfortunately, this may have the converse effect of increasing regulation, replication and inefficiency into the system,” said Mr Catelin.

“This could lead to long term supply chain issues and increased pressure on manufacturers.”

Medicines Australia does believe some of the proposals are less controversial and should be put forward for more formal consideration including:

  • Electronic prescriptions and personal medicines records
  • Consumer choice of dispenser with electronic prescribing
  • Managing Medicines Risks upon patient discharge (from hospital)
  • Transparency of public funding in pharmacy programs

“Of the many other ideas put forward in the Interim Report, some require a much more detailed explanation, analysis and consultation with the affected parties before they could be endorsed or explored by the medicines industry,” said Mr Catelin.

“I’m also pleased to note the confidence the Review has placed on the innovative pharmaceutical industry’s current commitment to Consumer Medication Information (CMI),” said Mr Catelin.

“Medicines Australia continues to work with the TGA on CMI, and encourages the use of technology to make this information further available to patients and consumers.”

“We will now spend considerable time discussing the report with our members to understand first-hand the impacts, opportunities and the consequences of these proposals.”

“Australia already has a world-class healthcare system and our pharmacists do a fantastic job delivering health care. Any reforms to how medicines are supplied to patients must maintain this standard,” said Mr Catelin.

Medicines Australia looks forward to further collaborative consultation on this report with the Government in the lead up to the final report.


Natalie Wimmer
Phone: 0450 728 660
Email: nwimmer@medaus.com.au