Review of Pharmacy Remunerationand Regulation

A Message from the Panel

16December2016

In our final communication for the year we want to provide an update on our work over these past several months, and confirm the process for the next phase of the Review moving into the new year.

Since early October the Panel has been considering the written submissions provided to the Review, and identifying the sets of data and background information which can inform the development of our Interim Report. Commissioned work has included both public surveys, as well as analyses and reports provided by external consultants. This support has been critical to complement the data already available in the public domain, and confidential data provided through individual submissions.

The list of consultants and scope of work which we have been utilising to date are published below to share with the public and to provide as much transparency as possible to our work.

The Panel is keen to ensure a comprehensive process and to that end we are working to prepare an Interim Report, including draft findings and recommendations, that are evidence based and robust.

The Panel would also like to confirm that it has been working alone and confidentially for its formative discussions and deliberations in this period. While the Panel is provided support from the Department of Health with secretariat resources and policy expertise as required, we have deliberately kept all parties, including the Department of Health, excluded from this stage of our work.

This is a temporary break in interactions, to allow the Panel time to appropriately digest and debate the material presented to us, and to fairly deal with the large volume of issues which have raised by individuals and groups across the country.

Moving in to 2017, the Panel will be keen to receive as many responses to our Pharmacy Financial Survey as possible by the 16th January, to add to our data analysis on community pharmacy in Australia today. The aim of this survey is to help us to understand what an efficient pharmacy looks like in Australia. Efficiency has different dimensions, but the scope of this Review is focused on the needs of consumers for access to medicines and their optimal use.

We need to understand the amounts of remuneration for dispensing, that ensure the stability of the pharmacy sector in different parts of Australia, and for best meeting the needs of the communities across the country. To craft the best possible recommendations, the Panel needs to understand the marginal, average, and incremental costs for dispensing and other medicine related activities in a pharmacy.

The more input we can have on these areas, the better the Panel is able to consider the evidence without potential bias or confounding. Can we stress the confidential nature of this exercise includes neither the Panel nor the Department of Health directly handling personal data from individual pharmacies, or having access to what is provided.

Finally, our Interim Report will be being released in February 2017 to allow everyone equal time and opportunity to consider and provide new feedback and comments. We will be allowing time over that period into late March for more discussions and consultation with you all, for your consideration of our draft findings, and the opportunity to respond to the Panel again.

We seek the best outcome for the viability of pharmacy provision in Australia, for the community, and for ensuring the ongoing implementation of the National Medicines Policy. The Panel has been honoured to receive such comprehensive and strong participation from pharmacists and consumers in this process of review to date. We seek your ongoing support and patience as we progress to the next phase, and we assure you all that we are working in good faith to deliver high quality analysis and proposals for the future.

We wish you all the best for a restful holiday period, and will look forward to working with you all over the new year.

Professor Stephen King Mr Bill Scott Ms Jo Watson

The following independent consultancies have been commissioned by the Review to date:

  • Protiviti – Provision of project management, project support, professional writing and probity services to support the Review.
  • Hall and Partners | Open Mind – Provision of consumer market research to provide research into the attitudes, expectations and experiences of Australian consumers and practicing pharmacists in relation to the access and affordability of medicines through community pharmacy. As well as the conduct of a quantitative survey to obtain financial data regarding the level and structure of remuneration for community pharmacy for dispensing of medicines under the PBS and the delivery of professional services.
  • Consumers Health Forum of Australia – Targeted consultations with CHF member organisations to identify consumer attitudes, expectations and priorities in relation to the provision of community pharmacy in Australia.
  • Deloitte Australia – Comprehensive study and analysis of literature relating to the models in place for the remuneration and regulation of community pharmacies in overseas jurisdictions, including a comparative analysis of selected overseas models with Australia’s current arrangements under the 6CPA.
  • RSM Australia – Provision of financial analysis and modelling to support the Review. This includes modelling the level and structure of remuneration for community pharmacy for the dispensing of medicines under the PBS and the wholesaling, logistics and distribution of medicines from manufacturer to community pharmacy, as well as the detailed financial mapping of the financial costs flowing through the pharmacy supply chain.

In addition, the Review Panel has been assisted by Medici Capital(an independent pharmacy valuation firm)in developing pharmacy cost models, including the analysis of the financial remuneration, costs and cost drivers for community pharmacy associated with dispensing; analysis of front of store sales (over the counter and retail items)and key PBS data variables.