New rebate system could rely on 'stickers'

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The Department of Health is proposing the reform of rebates paid under special pricing arrangements could be based on a system that uses 'stickers' to track medicines through the new supply chain.

Officials proposed the idea during last week's all stakeholder meeting at the Hotel Kurrajong in Canberra.

One of the many issues identified by the sector is how the proposed new supply chain arrangements for medicines subject to special pricing arrangements will differentiate between PBS prescriptions and non-PBS private prescriptions.

Under the proposed reform, the government will directly remunerate the different components of the supply chain for impacted PBS medicines - pharmacy, wholesalers and manufacturers. Non-PBS private prescriptions will maintain current remuneration arrangements. Yet there is currently limited capacity to track individual medicine boxes, differentiated as PBS or non-PBS, through the supply chain. 

Under questioning at last week's meeting, officials said the proposed solution could see the Department of Human Services print stickers that would be affixed to the individual medicine boxes. The stickers would contain the information required to manually track the individual boxes.

Stakeholders pointed out the significant barriers to adoption of the system. The packaging and labelling of prescription medicines are regulated through legislation, at the federal and state level. Governments might need to amend existing regulations or even legislation to allow the stickers.

An equally significant barrier would be space. Where would the stickers go? The packaging of prescription medicines varies by size. In many cases, there is little space to accommodate any additional information, let alone a sticker. 

The issues identified at last week's meeting reflect similar debates around the world.

The tracking of individual medicine boxes has been debated in different jurisdictions for well over a decade.

The debate in the US and Europe has been largely driven by the need to address the risk of counterfeit medicines in the supply chain. 

While the use of a complex and technologically advanced barcode system has been proposed in both jurisdictions, its widespread introduction has been delayed by costs, technological limitations and practical barriers related to packaging.

The radio-frequency identification (RFID) is a technology designed to allow the automatic tracking of medicines through the supply chain. It is based on a complex combination of tags, readers, communication devices and software. 

The most significant barrier to this technology is its immense cost. Its widespread adoption is by no means certain and, in any case, will take years.

In Europe, a system based on linear 2D barcoding has been adopted. It includes the product code, national identification number, batch number and expiry date.

The TGA said Australia could move to adopt the system in the future but it will take years, not months or weeks, and certainly not by the 1 July planned implementation of rebate reform.