Government Puts Pen to Paper for the Eighth Community Pharmacy Agreement

Following negotiations with the Pharmacy Guild of Australia, the Prime Minister and the Health Minister have put pen to paper on the Eighth Community Pharmacy Agreement (8CPA). Pharmacy Guild National President Trent Twomey has stated that he and the Guild welcome the cost-of-living relief provided by the 8CPA and the reinforcement of community pharmacies as the ‘most accessible primary health destination’ for Australians.  

The intent of CPAs is to help ensure all Australians have equal access to Pharmaceutical Benefits Scheme (PBS) subsidized medicines. The first agreement was in 1991 and focused on addressing the lack of pharmacies in rural areas. 

The National Health Act 1953 (Cth) denotes that the agreement needs to be made between the government and an organisation that represents the majority of ‘approved pharmacists’ (i.e the Pharmaceutical Guild of Australia). Notably, the agreement of the 8CPA by the Guild means that pharmacies have collectively agreed to the Government’s ’60-day dispensing’ policy. In a media release, the Guild stated:

“After recent policy disagreements, the Guild welcomes the Labor Government’s additional $3 billion investment in community pharmacies, to ensure their viability and sustainability.”  

The 8CPA has an overall funding envelope of $26.44b, the majority of which contributes to dispensing remuneration for pharmacies. Pharmacies are an integral part of Australia’s healthcare system and are the primary means of dispensing PBS medicines to the public. Indeed, there are 6,000 community pharmacies in Australia that look after 450 million annual occasions of service.

The proportion of people who delayed or did not get prescription medicine due to cost rose from 5.6% in 2021-22 to 7.6% in 2022-23. A significant selling point of the 8CPA is it’s ‘securing cheaper medicines’ measure which secures anti-inflationary relief for patients. The measure provides $484.4 million over 6 years from 2023-24 to freeze annual indexation of co-payments for PBS-subsidized medicines. Everyone with a Medicare card will benefit from this freeze for a year, and pensioners and other Commonwealth concession cardholders will benefit from this freeze for the next five years. 

 Image Credit: Major health expenditure sub-functions, 2024–25 to 2027–28, $ million by Christopher McGann

The 2024-25 Budget projects health spending will increase from $112.7b in 2024-25 to $122.8b in 2027-28. Whilst the states and territories contribute to health spending, the fasted growing payments by the federal government are for hospitals and Medicare. Expenditure on the PBS is projected to remain relatively stable.

8 June 2024 | Authored by Connor Andreatidis, Consultant, Precision Public Affairs

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