Supply of vital drugs threatened

Australian Pharmaceutical Industries (API) has threatened to slow down delivery times on vital drugs if it does not receive more money from the Federal Government.

API supplies medicines to more than 90 per cent of Australian pharmacies. API and four other wholesalers are collectively paid $190 million per year to ensure specified medications can be delivered anywhere in Australia within 24 hours. The medications are those listed on the Pharmaceutical Benefits Scheme (PBS), including cholesterol medication, antibiotics and asthma medication.

API is demanding a funding increase by 2015. Stephen Roche, API’s chief executive officer, has explained that “instead of being 24 hours, it might be delivery within 72 hours, except for emergency items”.

“It is a matter of what is important from a social policy perspective, and then what are the minimum standards the Government would be looking to maintain and then some consultation about how we may be able to get there.”

Greg Turnbull, spokesman for the Pharmacy Guild, the government and community pharmacy body, has commented, “if the API has a case about why [delivery within 24 hours] is not viable, it can put it to the government at any time”.

The president of the Australian Medical Association (AMA), Steve Hambleton, said, “Medicare rebates for patients have been cut, patients [are] already paying for the Government’s black hole and both this Government and the Opposition have said budgets will be tightened. There is no reason to think API will be immune from those cuts.”

Mr Roche’s response was that, “if the Government doesn’t wish to supplement the income into the next agreement, there will be some tradeoffs”.

Read more at the Sydney Morning Herald

Who will bear the increased costs?

Drug companies don’t need any help to look like the bad guys. Surely if there was a good reason to request an increase in funding, API would be spruiking it all over the shop.

But API hasn’t told anyone why delivery times for these life-saving drugs could blow out to 72 hours. Has delivery become more expensive? Have drugs become cheaper? Has API experienced significant losses recently?

Yes, I imagine delivery has become more expensive with the steady rise in petrol prices. Yes, more drugs have been added to the PBS, meaning API has more drugs to transport and sell at a lower cost. But despite all that, API announced a net profit after tax of over $30 million in 2012, following a loss the previous year of just over $23 million. API’s profits are skyrocketing – so what justification does it have to demand more funding from an already stretched Government budget?

The medications API supplies under the 24 hour agreement include drugs for those who suffer from cancer, macular degeneration, high cholesterol, deep vein thrombosis, osteoporosis, stroke and many more. Sufferers from these afflictions cannot go without and are often only able to afford these medications because they are covered under the PBS.

If the Government does increase API’s funding, will these costs be passed on to those who can least afford it? Should we be looking forward to an increase in the cost of life-saving medications over the next few years, simply to line the pockets of greedy drug companies?

What do you think? Should the Government stay strong, but risk blowing out delivery times to 72 hours, or should it simply increase the funding to continue to ensure supply of these medications?