Direct supply CSO squeeze

TENDER documents for the Community Service Obligation (CSO) issued on Fri have confirmed that controversial exclusive direct supply arrangements for some medications will continue - but such distributors will not be able to access the CSO Funding Pool.

The formal “Invitation to Apply to participate in the Community Service Obligation Funding Pool and supply PBS Medicines and NDSS Products” notes that a CSO Distributor is not required to stock or supply items that are not available to it because of an Exclusive Supply Arrangement, but also will not receive CSO payments in relation to such items.

The CSO Administration Agency will maintain a list of the CSO Products currently subject to Exclusive Supply Arrangements, updated on a monthly basis.

The documents mean that, should a direct logistics supplier such as DHL wish to participate in the CSO, it will be able to do so but will only receive CSO payments for items available through all wholesalers.

Current CSO Deeds will remain in place until the Invitation to Apply process is concluded, with an indicative time-line showing commencement of services under the new arrangements in Mar 2019.

The new Deeds between the Commonwealth and the CSO distributors will end on 30 Jun 2020, with the Government able to extend until 30 Jun 2022.

A further extension through until 30 Jun 2024 is also possible.

The current schedule of Exclusive Supply Arrangements medicines has not been included in the documentation, with applicants required to apply to the Department for access to the list, under a non-disclosure agreement.

The CSO Funding Pool was established under the Fourth Community Pharmacy Agreement, with CSO Distributors also required to provide services in relation to National Diabetes Services Scheme (NDSS) products with the intention that community pharmacies “will become the sole Access Points for the purposes of the NDSS”.