Managing High Cost Medicines in Community Pharmacy Flashcards
What are some Hepatitis C treatments on the PBS? Which has been removed from PBS and de-registered?
- Olysio® (simeprevir)
- Incivo® (telaprevir)
Removed from PBS and de-registered 1st Sep 2016
- Pegasys® (peginterferon alfa-2)
- Pegasys-RBV® (peginterferon alfa-2a with ribavirin)
- Victrelis® (boceprevir) [GT1]
Top 50 PBS drugs by cost…
Prices went down as years progressed, see lecture for more detail
Who is there a cost-share agreement in place between?
Between the drug companies and the government
Why did the sales revenue increased by 26.2% from the prior year (31 January 2017)?
Heavily influenced by PBS listing of high cost Hepatitis C medications from March 2016. Sales revenue was up 6.3% for the period, which was driven by a number of contributing factors.
Why did the sales revenue drop by 18.4% from the prior year (31 January 2020)?
Sales revenue was influenced by the reduction in demand for high cost, low margin, Hepatitis C medications,
> when this impact is exluded, sales revenue was down 21.8%
Key indicators for wholesaling?
- top line growth due to new Hep C medications –> added $289m in revenue
What core business achieving real growth had a impact on pharmacy distribution results?
Hep C medications revenue growth of $138.9m
What is the % remunderation levels that a pharmacy gets for a months supply of harvoni (hep c medication)?
0.28% –> remuneration levels are insuficient for pharmacies and wholesalers to bear the cost and the risk of these very expensive medicines
What is the problem in terms of pharmacies and wholesalers when it comes to managing high cost medicines in the pharmacy?
- “pharmacies are making clear that, as much as they want to dispense these medicines to patients, they simply cannot afford to put their businesses at risk by doing so.”
- “wholesalers are saying they cannot afford to take on the risk of the very high debts associated with these medicines.”
> Some wholesalers cut trading terms back to the 7th of the of the month
> Because of the large amount of credit required, some wholesalers were asking for personal security from pharmacist proprietors (eg. caveat’s over their house!)
> The PBS payment system had in-built “anti-fraud” mechanisms that held unusually large payments back from pharmacies until manually verified
> Biggest problem = GST
What is a BAS? What is it used for for?
All business registered for GST use the business activity statement (BAS) to complete their GST returns. Your reporting and payment period is shown on your BAS and will be monthly, quarterly or annually
use BAS to:
- report and pay the GST your business has collected, and
- claim GST credits –> critical bit
How long does a bas refund take?
- “ATO can only retain a refund until the time it would no longer seem to be reasonable to ask for verification of information.”
- “while there is an upfront obligation on the ATO to refund GST credits upon an assessment being issued, there are also provisions to retain refunds in particular circumstances”
Simple answer: anywhere from 14-60 days
How does the PBS payment cycle work
e.g. prescriptions dispensed on the 1st of April (thursday) through to the 7th of April (wednesday) will be paid into the bank on?
The payment cycle starts on a Thursday and closes the next Wednesday with payment occurring that Friday.
prescriptions dispensed on the 1st of April (thursday) through to the 7th of April (wednesday) will be paid into the bank on friday the 9th of April
How does the wholesaler payment cycle work?
For example we take 2021 April and 2021 May as an example.
- PBS drug dispensed on the last day of the month which is 30th of April
- Purchases from wholesaler occurs on 1st of next month (may)
- Pharmacy will be paid on the 7th of May 2021 (friday –> see previous slide)
- BAS refund could be anytime from 14th onwards
- Pharmacy has to pay to the wholsaler on the 25th of May at the latest
> 3 week buffer from pharmacist being paid and having to pay wholesaler
The fundamental proposition being pursued: the level of remuneration should be equal with the cost of the drug.
A) What is the Guilds’ 2016 solution?
B) What is the Harper Review 2017 solution?
A)
put a pseudo-consignment model in place
- align [trading terms] with the Medicare and GST reimbursement timeframes for pharmacies
- the medicine manufacturer would not require payment until the wholesaler has been given sufficient time to be paid by the pharmacy.
> reasonable returns policies
B)
- A cap should be placed on the amount that a community pharmacy contributes to the cost of the medicine
- This cap should be in the range of $700 to $1000 so that all PBS-approved community pharmacies can supply all PBS medicines required by the public.
Where are we in 2021?
Government will improve cash flows for community pharmacies by reducing the period of time that the Government takes to process claims against the PBS from 9-16 days to 2-9 days, which has no impact on the fiscal blance over the forward estiamtes but will negatively impact underlying cash by $213.3 million in 2018-19
