Pharmacy and Government Arrangements

The new five year Community Pharmacy Agreement between the Government and the Pharmacy Guild of Australia commenced on 1 July 2000.

Page last updated: 2004

The five year Sixth Community Pharmacy Agreement (6CPA) between the Commonwealth of Australia and the Pharmacy Guild of Australia commenced on 1 July 2015 and is a key element of the PBS Access and Sustainability Package, announced in the 2015-16 Budget. Further information about the 6CPA can be found on the PBS website.


Overview

The Agreement covers the five years to 30 June 2005, and builds on the successful outcomes of the two previous Community Pharmacy Agreements in providing a strong platform on which the Government and pharmacy can move forward together to provide quality pharmaceutical services for all Australians.

In ensuring continued development of an effective, efficient and well-distributed community pharmacy service in Australia, the Agreement takes account of the recommendations of the Competition Policy Review of Pharmacy and the objectives of National Competition Policy.

The Agreement also recognises an active role for the Pharmaceutical Society of Australia in relation to professional practice.

A copy of the Third Community Pharmacy Agreement can be found at: http://www.health.gov.au/pbs/pharmacy/pharmagreement.htm.

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What this means for consumers

For consumers, the Third Community Pharmacy Agreement between the Government and the Pharmacy Guild of Australia provides:

  • stable arrangements for the provision of pharmaceutical services to the community through the Pharmaceutical Benefits Scheme (PBS),
  • a strong framework for the continuing development of the community pharmacy network throughout Australia, and
  • commitment to a set of objectives intended to ensure the highest possible standards in pharmaceutical service for the Australian community.

Objectives

Parties to the Third Community Pharmacy Agreement are committed to the achievement of the following:

  1. provision of a quality, personalised pharmacy service to the Australian community through a network of well distributed, accessible, and viable community pharmacies;
  2. increased access to community pharmacies for persons in rural and remote regions of Australia;
  3. continued development of an effective, efficient and well-distributed community pharmacy service in Australia which takes account of the recommendations of the Competition Policy Review of Pharmacy and the objectives of National Competition Policy;
  4. greater financial stability for the parties to the Agreement through the introduction of risk sharing arrangements;
  5. identification and development of ways in which information technology can be used to improve medication management and more broadly to improve the Australian health care system for the benefit of the community;
  6. development of enhanced medication reviews, in cooperation with the medical profession, aimed at improving health outcomes and quality use of medicines for the Australian community;
  7. implementation of quality standards;
  8. coordination in the delivery of primary health care services and achievement of a multi-disciplinary approach to the provision of quality health and pharmacy services for all sections of the community;
  9. a focus on achieving continued improvement in community pharmacy services provided to Aboriginal and Torres Strait Islander people; and
  10. generally, the fostering of a stable and viable community pharmacy sector in Australia.

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Third Community Pharmacy Agreement

Part 1 of this Agreement provides for the prescription-based remuneration arrangements to apply to community pharmacy, under the Pharmaceutical Benefits Scheme, for the period of the Agreement. These arrangements are put into effect by the Pharmaceutical Benefits Remuneration Tribunal under the terms of section 98BAA of the National Health Act 1953.

Part 2 (Clauses 22 to 39) of the Agreement concerns revisions to the Australian Community Pharmacy Authority (ACPA) arrangements for pharmacy approvals and relocations. Under the National Health Act the ACPA is responsible for the administration of rules relating to the establishment or relocation of approvals for community pharmacies. Further information on the ACPA rules can also be obtained from the ACPA Secretariat via email at ACPAmail@health.gov.au or by phone on (02) 6289 6848.

This second part of the Agreement (Clauses 40 to 63) also identifies a range of initiatives to be developed, in respect of pharmacies and approved pharmacists, to further enhance the provision of pharmaceutical services to the Australian community.

Agreement Principles

The Agreement is based on the following set of principles:

  1. providing consumers with reasonable equality of access to quality pharmacy services in their local community;
  2. ensuring that consumers receive quality patient care and outcomes;
  3. expanding community pharmacy's professional roles;
  4. providing a stable and predictable environment for community pharmacy;
  5. extending the cooperative approach evident in the first two Agreements between the Guild and the Commonwealth; and
  6. maximising the value to the taxpayer by encouraging an effective and efficient community pharmacy network.

Agreement Management Committee

The Agreement Management Committee (AMC) is responsible for the active management of the Agreement over the five-year period from 1 July 2000. It is comprised of representatives of the Department of Health and Aged Care, the Pharmacy Guild of Australia and by invitation, the Pharmaceutical Society of Australia.

Initiatives developed under this Agreement are administered in accordance with business rules developed and agreed through the AMC.

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Pharmacy Initiatives

The Agreement includes measures designed to strengthen and extend the community pharmacy network in rural and remote areas, and provides incentives to focus on particular areas such as quality enhancement and effective medication management.

These arrangements reward community pharmacists both for delivering a wider range of services to Australians, and for delivering those services at a consistently high quality.

Important

This information is provided as a guide only. While it is presently intended that the Commonwealth will make payments as set out in this information, the payment of any allowances is a matter within the sole discretion of the Commonwealth and it is not intended that pharmacists or pharmacies will have a legally enforceable entitlement to any payment.

Arrangements for these allowances may be revised from time to time. While every effort is made to ensure that information provided is correct, the Commonwealth accepts no liability for any loss or damage resulting directly or indirectly from reliance on this information or from subsequent changes to the currency of this information.

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Rural and Remote Pharmacy

Important: Rules relating to the Start-up Allowance are currently under review. Revised rules will be made available as soon as possible and will be effective from 1 July 2001. Intending applicants should note that the arrangements for these allowances may change, and that all applications received after 25 June 2001 will be considered against the revised rules, subject to the Commonwealth's discretion

Payments to rural and remote pharmacies under the Isolated and Remote Pharmacy allowances, available under the previous community pharmacy agreements, ceased from 31 December 2000.

Recipients of these old allowances are not automatically eligible for allowances under the new Agreement as there are some differences in eligibility criteria. New applications are required.

Rural Pharmacy Maintenance Allowance

The Rural Pharmacy Maintenance Allowance (RPMA), available from 1 January 2001, provides ongoing support to pharmacies in rural and remote communities. In recognition of the additional financial burden of maintaining a pharmacy in rural and remote locations this monthly allowance assists these pharmacies to continue to provide quality pharmaceutical services.

Payments are structured to provide an increased level of assistance to areas of greater need, taking into account the relative remoteness of the pharmacy according to the PharFmacy ARIA, and the level of that pharmacy's PBS and RPBS claimable processed prescriptions paid by the Medicare.

Start-up Allowance

A limited number of special Start-up allowances are available to assist in the establishment of new pharmacies in more remote areas of Australia where there is a need for a community pharmacy.

Under these arrangements a maximum payment of $100,000, comprising three payments over a two-year period plus a component for GST, may be made to successful applicants.

Succession Allowance

A limited number of special allowances are also available to assist in the retention of existing pharmacies in some rural and remote areas where there is a community need, and where the existing pharmacist has been trying unsuccessfully to attract a purchaser for that business for at least two years.
This allowance may provide a maximum payment of $60,000, comprising three payments over a two-year period plus a component for GST, to successful applicants.

Applications for Rural Allowances

Eligibility for these allowances is assessed by the Medicare Australia in accordance with rules agreed through the Agreement Management Committee.

Further information and application forms for these allowances can be obtained from Medicare Australia by calling
132 290 or from the Medicare website through the professional link to the Pharmacy Agreement option.

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Pharmacy Accessibility / Remoteness Index of Australia (Pharmacy ARIA)

The Pharmacy ARIA is an index specifically designed to quantify the relative degree of remoteness of community pharmacies across Australia. Developed by the University of Adelaide this index combines a general remoteness component as represented by the Accessibility/Remoteness Index of Australia (ARIA), with a professional isolation component represented by the road distance to the five (5) closest pharmacies.

The index results are classified into six (6) categories, ranging from Highly Accessible (1) to Very Remote (6), which are used in determining eligibility for rural allowances. This index is to be recalculated annually to incorporate new pharmacy locations as at 31 March each year.

Index results for over 11,000 localities, lists of localities grouped by category, and further information on the calculation of the index can be found on the Pharmacy ARIA website.

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Pharmacy Development Program

The Pharmacy Development Program has been introduced to promote the enhanced involvement of community pharmacy in the pursuit of quality and cost effective service delivery. A range of initiatives are to be funded under this program, including:

Quality Care Pharmacy Program

The Quality Care Pharmacy Program (QCPP), developed by the Pharmacy Guild of Australia and the Pharmaceutical Society of Australia (PSA), is an industry-developed and maintained quality assurance and professional practice standards program.

In recognition of this Program's key role in facilitating achievement of the highest possible service standards across the community pharmacy network, incentives have been put in place under the Agreement to assist and encourage all community pharmacies to achieve and maintain QCPP accreditation.

Further information on the QCPP and how to participate in the program can be obtained from the Pharmacy Guild of Australia on (02) 6270 1888 or on the Guild's QCPP website.

The Guild will also provide information on how to access the range of incentives available to participating pharmacists.

Medicines Information for Consumers

Provision is included within the Pharmacy Development Program for initiatives around the provision of quality use of medicines information to consumers.

Research and Development

A Research and Development Program has been established to invest in projects designed to improve the quality and range of pharmacy services aimed at delivering positive health outcomes for Australians.

The program aims to identify research priority areas in community pharmacy service provision for research and development, and to then commission projects with the greatest potential to deliver services with positive health and economic impacts to consumers and the health system.

Further information on this initiative can be found on the Pharmacy Guild's Research and Development website or by contacting the Research Manager at the Guild:
Email: donna.stephenson@guild.org.au
Phone: (02) 6270 1888

Information Technology

The Agreement recognises the enormous potential for utilising Information Technology to improve the quality and safety of prescribing, dispensing and medication management.

Funding has been provided under this Agreement towards the development of initiatives in this area.

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