CSO review outcome soon

THERE’S speculation that the Health Department could release the highly anticipated findings of its review of the Community Service Obligation within the next couple of weeks, with rhetoric around the issue ramping up in recent days.

Sigma CEO Mark Hooper, who is also Chair of wholesaler group The National Pharmaceutical Services Association (NPSA), defended the CSO at a conference this week

(PD yesterday) and warned of the dangers of a “single point of failure” when it comes to exclusive direct distribution arrangements.

However at the same eyeforpharma event, DHL CEO Saul Resnick pointed out that more than two thirds of product currently being delivered to wholesalers is actually coming via DHL “so if there’s a single point of failure it’s already there...the single source of supply in this context actually improves the likelihood of product getting safely to where it needs to go”.

Resnick was quoted by Pharma in Focus as saying the CSO was outdated and no longer relevant, but has not ruled out participating in the scheme after the details of the review are released.

Current contracts under the CSO are held by Sigma, Symbion, API, National Pharmacies and CH2, but expire in Dec this year.

Resnick urged change in the CSO, saying he believes subsidisation of deliveries to pharmacies in metropolitan areas is unjustified.

“I think if anything the CSO should be funded towards rural, regional and remote areas...where the money’s actually needed,” he said.

The NPSA has warned that direct distribution of “cherry picked” high value products threatens the sustainability of all wholesalers.