Impact on Bps Reform

Economic analysis of exclusive distribution of PBS medicines

National Pharmaceutical Services Association

June 2011

Economic analysis of exclusive distribution of PBS medicines

Contents

Key findings .............................................................................................................................. 1 Introduction .............................................................................................................................. 3

1.1 Structure of this report ..................................................................................................... 4 The importance of access .................................................................................................. 5 Public policy context ......................................................................................................... 5 Rationale for the Community Service Obligation................................................................ 6 Operation of the CSO Funding Pool ................................................................................... 8 The traditional distribution model for PBS medicines ........................................................ 9 Pressures on the PBS supply chain................................................................................... 10 Exclusive distribution ...................................................................................................... 12 Potential impacts ............................................................................................................ 14 Possible broader supply-chain implications – evidence from overseas ............................. 23 Summary of impacts on supply chain participants ........................................................... 24 The policy options ........................................................................................................... 26

2

Access to PBS medicines and the existing distribution...