This week's BioPharmaDispatch conference heard a damning assessment of the proposed national traceability framework and concern over the impact on the supply chain of planned price changes.
The Department of Health published a consultation paper on the introduction of a national medicines traceability framework in November last year.
The paper included a range of options that vary significantly in terms of implications for Australia's medicines supply chain. However, it appeared to clearly favour a full track and trace model.
A full track and trace model involves the development of a centralised data repository owned and operated by the federal government for the full traceability of medicines across the supply chain.
This complex and high-cost model has very little support across the key players in the supply chain but the consultation paper emphasised its 'benefits' and minimised its cost.
API chief executive Richard Vincent, who is also chair of the National Pharmaceutical Services Association, told the conference that the rationale for the proposed framework remains unclear.
He said the supply chain simply cannot manage the cost, complexity or demands of the proposed full track and trace model.
"It is just not clear to me, or anyone I suspect, exactly what problem the model is trying to solve. Does anyone know? If they do, can they tell me?"
He said Australia's medicines supply chain is well functioning and not characterised by many of the issues seen in places like Europe, including counterfeiting.
"We have to identify what problem we are trying to fix and then come up with an appropriate solution," he said, adding any issue that relates to a relatively small number of medicines does not require a complex and unworkable solution that will have a signiciant impact on the more than two million products distributed to community pharmacy every working day.
Mr Vincent also flagged concerns over the impact of planned price changes on 1 October this year and 1 April 2023.
On 1 October, ex-manufacturer price increases will be applied to hundreds of PBS-listed medicines, reflecting thousands of stocked items. PBS-listed brands with an ex-manufacturer price of $2 or less will be increased to $2.50. Brands with an ex-manufacturer price of more than $2 but less than $3.50 will be increased by $0.50 to a maximum of $3.50.
The increases will be applied with impacted companies then required to hold a minimum of four to six months stock in Australia from 1 July 2023.
Mr Vincent said wholesalers have already expressed concern to the federal government over the risk of stockpiling ahead of the 1 October increases. He said the next health minister must give consideration to allowing wholesalers to actively manage stock as a way to avoid the supply shortages as a result of stockpiling. The community service obligation requires wholesalers to deliver medicines based on orders. They do not have the discretion to simply limit orders in response to concerns over stockpiling.
"It would be replicating what we were able to do during the pandemic," he said, adding a similar issue could emerge in response to the 1 April 2023 catch-up price reduction day. "It will just be the reverse but it could be another period of supply uncertainty and we need to be able to manage it."
More broadly, Mr Vincent said future reform discussions need to be informed by supply chain realities to ensure these issues can be identitied, managed and avoided.
He also again questioned the federal government's failure to use the established community service obligation (CSO) wholesalers to distribute the COVID-19 vaccines.
The CSO wholesalers receive over $200 million each year from the federal government to support investment in and the maintenance of infrastructure for the distribution of medicines and vaccines.
However, the federal government chose to distribute the COVID-19 vaccines through a separate and 'bespoke' infrastructure.
Issues quickly emerged to the extent a senior army officer was appointed to takeover responsibility for distribution of the vaccines. Prime Minister Scott Morrison recently singled out trusting the Department of Health to manage the COVID-19 vaccine rollout as a mistake during his last term of government.