Assessing the effectiveness, development, administration and outcomes of the five Community

Pharmacy Agreements

John Jackson Faculty of Pharmacy & Pharmaceutical Sciences

Monash University

A personal assessment and opinion.

Outline of presentation •  Background to the first Community Pharmacy Agreement •  The core elements of all five CPAs •  Evolution of the CPA’s, agreement by agreement •  How the CPAs have been administered •  The impact of the CPAs •  Issues of note •  Things have changed during the 24 years of CPAs •  The impact of CPAs on development in community ph’cy •  Observations as we approach the 6th CPA •  Summary

Background to the fist CPA

October 1989 3000 protesting at Tribunal’s decision “The sea of white coats at Sydney’s Parramatta Park on 7 September could have been mistaken for a Klu-Klux Klan meeting. A n d t h e g r o u p o f 3 0 0 0 a n g r y pharmacists and staff might have lynched Minister for the PBS, Peter Staples, had he been present.”

Failure of the Pharmaceutical Benefits Remuneration Tribunal process

Turbulent times at the end of the 1980s

Community and Pharmacy Support Group

Pharmaceutical Care

Pharmaceutical care is the direct, responsible provision of medication-related care for the purpose of achieving definite outcomes that improve a patient’s quality of life.

Hepler C & Strand L. Opportunities and responsibilities in pharmaceutical care. Am J Hosp Pharm 1990, 47: 533-43

Product Patient Outcomes

Core elements of all five CPAs •  Negotiated between the Commonwealth and “the Pharmacy

Guild of Australia or another pharmacists’ organisation that represents a majority of approved pharmacists”.

•  Established a process for determining the allocation and relocation of PBS approvals.

•  Formed a basis for determining dispensing remuneration and related fees.

•  Provided support for R&D which has facilitated the introduction of new professional services.

•  Incorporated a range of supplementary programs such as support for rural practice and indigenous services.

1st CPA: 1990 – 1995

Brian Howe 1 July 1990 to 30 June 1995 •  One-off payment to close pharmacies jointly funded by g’vt & ph’cists. •  Restriction on the granting of new PBS approvals and relocation of existing. approvals •  Dispensing remuneration for S85 drugs •  Funding for R&D

2nd CPA: 1995 – 2000 Carmen Lawrence

•  As per 1st CPA minus the payment for closure •  Introduction of the Residential Medication Management

Review Program [RMMR] Programs funded by reduced dispensing remuneration COAG National Competition [Wilkinson] Review conducted during 2nd CPA

3rd CPA: 2000 – 2005 Michael Wooldridge

•  As per 2nd CPA plus: •  Rural workforce development & support allowances •  Support for aboriginal health services •  Pharmacy Development Program [$188m over 5 years]

o  Professional Practice Standards o  Quality Care Pharmacy Accreditation Program o  Medication Management Services [RMMR + HMR + facilitators] [$114m] o  R&D Program [$15m] o  Funding for S100 HSDs to private hospitals o  $7.5m to PGA to administer the PDP

4th CPA: 2005 – 2010 Tony Abbott

commencement delayed to 1 Dec Part A •  Granting of new PBS approvals, relocation of existing approvals •  Dispensing remuneration – professional fees & mark up •  Pharmacy wholesaler Community Services Obligation [ mark up

reduced 10% to 7% capped at $70. CSO $750m over 5 years] Part B •  Professional Pharmacy Programs and Services Total $500m over 5 years plus $68m from 3rd CPA

4th CPA: 2005 – 2010 Amendment March 2007 due to creation of formularies [F1, F2A & F2T] & price disclosure regime. Increase to mark up and dispensing fee plus extra $69m for CSO & $20m for PBS on-line. Part B Professional Pharmacy Programs & Services •  Medication Management Reviews: RMMR [$66.75m*], HMR [$54.15m], facilitators [$29m*] [total $150m] •  Better Community Health [$192m] •  Rural Pharmacy Allowance & Support Programs [$111m] •  Indigenous Access Programs [$27m] •  E-health initiatives

4th CPA: 2005 – 2010 Part B Better Community Health •  Asthma pilot program [$10.4m + $2.5m] •  Diabetes pilot program [$10.4m + $2.5m] •  Dose administration aids [$39.7m + $33.2m] •  Patient medication profiling services [$14.8m + $18.8m] •  Research & Development [$14m + $5.3m] •  Prevention of communicable diseases [$10.3m] •  Counselling for emergency contraception [$12m] •  Quality care pharmacy program [$73.5m + $2.3m] •  Practice change and education incentive [$10.3m]

4th CPA: 2005 – 2010 Part B Rural Programs •  Rural pharmacy maintenance, start up & succession, •  Workforce program, pre-registration allowance Indigenous Programs •  Improved PBS access, S100 support, ATSI u/grad pharmacy

scholarship & assistant program E-health initiatives •  PBS on-line [$20m]

4th CPA: 2005 – 2010

Degree of Innovation traditional innovative

Degree of Controversy consensual highly controversial

Structural or Systemic Impact marginal fundamental

Public Visibility very low very high

Transferability strongly system- dependent system-neutral

Policy review

5th CPA: 2010 – 2015 Nicola Roxon

Parts 2 & 3 Relate to script prices and fees Part 5 Location rules, reviews, operational matters Amendment to location rules late 2011 Part 4 Professional programs [$386.4m] Additional Programs to Support Patient Services [$277m] Programs to meet Financial Management & Accountability Regulations

5th CPA: 2010 – 2015 Part 4 Professional programs •  Medication Management Programs [$163.9m]

o  RMMR & HMR o  MUR new o  Diabetes Medication Management Service

•  Rural Support Programs [$107m] •  ATSI Programs [$28.9m] •  Pharmacy Practice Incentives & Accreditation [$75m] •  Research & Development [$10.6m] •  Medication continuance [$1m]

5th CPA: 2010 – 2015 Part 4 Additional Programs to Support Patient Services •  Clinical Interventions [$97m] •  Dose Administration Aids [$132m] •  Staged Supply Support Allowance [$35m] •  Accreditation System Support [$5m]

5th CPA: 2010 – 2015 The dollars PBS ~ $10b per annum [hospital PBS expend. ~$1.6b] 5th CPA Initial estimation: $1b savings over 5 years to the Commonwealth. Agreement provided:

$15.3b over 5 years $3,060m per annum $ 3.17b to wholesalers incl CSO $ 634m per annum $11.47b to community pharmacy $2,294m per annum

incl $ 0.663m for programs. $ 132m per annum Prof programs excl R&D, rural & ATSI = $103.3m per annum Approx 5,250 pharmacies = $19,676 per pharmacy per annum.

Over the 24 years •  Dispensing remuneration has been maintained with the

importance of the dispensing fee growing in relation to mark up. •  Unit cost of dispensed items and margins able to be achieved

through trading terms adversely affected by price disclosure. •  Entry into ownership has become more difficult and existing

proprietors have had an advantage. •  Professional programs have been proposed as a panacea and

while exceptionally important to health outcomes, in reality have had little impact on pharmacy viability.

A delicate balance sustains our NMP Location rules

Restricted access to PBS approvals

increase the price of pharmacies and associated debt.

Price disclosure The reduction in

trading discounts and associated margins

reduces viability.

Debt

Income

How the CPAs have been administered •  3rd CPA: Agreement Management Committee

o  comprise members of Department & PGA o  PSA by invitation

•  4th & 5th CPAs : Agreement Consultative Committee o  Commonwealth 4 members & PGA 4 members. o  “PSA, whilst not a signatory ... will be an active participant in

those areas … that relate to professional practice.” •  4th CPA PPSAC & 5th CPA PRG: a broad based advisory

committee relating to professional programs.

The ANAO is conducting an audit of the administration of the 5th CPA

The impact of the CPA’s In what ways have they been effective? •  Stability with bouts of uncertainty •  Careful management of mark up, dispensing and other fees •  More efficient & timely payment processes •  Research to support professional programs •  Established a model of practice for medication management

which is aligned with other parts of the health system •  Strengthened rural pharmacy presence and practice

Much of the flak has been in relation to the professional programs which account for a very small portion of the expenditure.

Issues of note •  PGA administration & secretarial services •  Management of funds for programs – under & overspend •  Uptake of some services very low •  Discontinuation of services •  Payment regimes fro some services •  PGA has become a major software provider •  Activities proposed but not delivered

o  3RD CPA – Remuneration for extended hours pharmacy o  3rd CPA – Involvement in supply of vaccines &‘bio-tech’ products o  4th CPA – The role of community pharmacies in drug recalls o  4th CPA – Aged Care Residential Facilities & Private Hospitals

•  Payment for enrolment & start-up

Start up incentives

Issues of note •  Efficiency dividends have not been returned to the profession. •  The pharmacy profession has funded the provision of services

that other sectors of the health system benefit from. •  Poor continuity of developments – 5 year cycle of R&D. •  Impediment to the establishment of novel models of practice. •  Representation in negotiation:

o  non PGA proprietors hospital practices o  employee pharmacists other pharmacy organisations o  wholesalers consumers

Issues of note 3rd  CPA   2000  -­‐‑  2005

4th  CPA 2005  -­‐‑  2010

5th  CPA 2010  -­‐‑  2015

R&D $15m $14m  +  $5.3m $10.6m Medication  Management

$114m RMMR  +  HMR

$150m $163.9m RMMR,  HMR  +  MUR

Other  prof Programs

$172.7m $364

Rural $111m $107m Indigenous $27m $28.9m Total  Programs $188m $500m  +  $68m   $663.4m  

Expenditure per program over 5 years

Fall in R&D funding. Med management, rural & indigenous funding stagnant 2001/2 – 2011/12 Cwth expenditure on primary care increased 50%

Things that have changed during the 24 years •  Growth of private hospital pharmacy and the introduction of

the PBS to public hospitals. •  Patent cliff, price disclosure and the MoU between the

Commonwealth and Medicines Australia. •  Emergence of independent pharmacists providing medication

review services. •  Growth of S100 schemes, particularly the Highly Specialised

Drugs Program. Community pharmacy may not be distribution point for new specialist high cost drugs.

•  Philosophy, vision and models of practice.

How are these matters been recognised within the CPAs?

The impact of CPA’s on development in community pharmacy.

As the dominant aspect of the policy framework it can take the credit & share the blame for the current state of affairs in community pharmacy. •  Widely distributed community pharmacy network satisfying

National Medicines Policy objective 1: Timely access to medicines … at a cost individuals and the community can afford.

•  High level of pharmacies in financial hardship. •  Gross & net margins from dispensing have peaked and will

decline.

Observations as we approach the 6th CPA •  Sustainability of the business of pharmacy is critical. •  Commission of Audit proposed deregulation of ownership &

location rules, increased copayments & limit PBS expenditure. •  Breadth of the agreement – the role of pharmacists is wider

than what can be covered in an Agreement between the PB Branch and the PGA.

•  Changing focus of the practice of pharmacists o  Change in pharmacists practice from transaction-based,

commoditised dispensing model to a relationship based, consumer centric model.

•  Need alignment and integration with other parts of the health system.

Observations as we approach the 6th CPA Philosophy: Pharmaceutical Care Vision Statements: Pharmacists are healthcare professionals who are sought after and valued for their expertise in medicines in working with consumers and the health care team to deliver optimal health outcomes. Models: more than 100 within three areas of practice

Medication management Primary care Public health

Observations as we approach the 6th CPA

Public health Health promotion campaigns Smoking cessation Weight management Return unwanted medicines Needle exchange Opioid substitution Immunisation Pandemic support Cardiovascular risk assessment

Medication management Dispensing Counselling Patient education Dose administration aids Staged supply Medication adherence Chronic disease management: asthma, diabetes, lipids, cardiovascular, osteoporosis etc Monitoring Medication use reviews Medication Management Reviews INR testing & warfarin dosing Prescribing

Primary care Health information First aid SelfCare Minor wounds Mother & infact Triage Mental health care Palliative care Foot care Nutrition Oral care Screening Health status self monitoring devices Sleep apnoea

Observations as we approach the 6th CPA

PGA’s Community Pharmacy Programs / Service matrix

Other parts of the world have passed us by UK Community Pharmacy Contract •  Essential services – universal •  Advanced Services – locally commissioned •  Enhanced Services – commissioned nationally

Scotland •  Acute medication service – dispensing: paid on a per-item basis •  Minor ailment service – assessment, advice, treatment &

referral: capitation fee •  Chronic medication service – shared care, monitoring:

capitation •  Public health service: health campaigns – fixed fee.

Summary •  CPAs have provided stability. •  Pharmacy policy and practice developments have largely

occurred in 5 year spurts. •  Revenue from non supply activities remains negligible and

needs to be expanded. •  The supply funding model need stability and sustainability. •  Early advancements in professional practice have been

overtaken by some other countries. •  In some ways, it seems we are right back to where it started in

the late 1980s. No tribunal to blame but an uncertain environment and an unsettled profession.

Shades of the 1980’s

Summary The landscape is much more complex than it was 24 years ago.

Either the Community Pharmacy Agreement is an agreement

between PB Branch & PGA just about supply and pharmacy approvals.

Alternatively, it could become a broad based agreement

between the whole of government and the whole of the profession addressing all of the issues that we face.