And thanks very much to George and to David from the Guild, to Kos and to Trent as our hosts today. I think Shane is here from the Society, and to all of our owners, our pharmacists, and today I want to give a special shout out to the pharmacy assistants who are either here or in who’s name you were here.
George, I was watching all of the winners from the different categories and thinking how impressive they were, and I want to congratulate all of the finalists, but in particular, all of the pharmacies who took the step of putting their names forward, because that meant they had a degree of pride and a degree of aspiration for their pharmacies, for your pharmacies. And especially to Southcity, I am in particular looking forward after my run this morning to try on your specialised sporting braces.
So what an achievement and it says that you aspire not just to be excellent in your own right, but to deliver outcomes for your patients. And when George made reference to the fact that the Guild is celebrating its 90th year, I did a few calculations and I worked out that 90 years ago, Phyllis Phoebe Forster would have just been completing her training at the then-Victorian College of Pharmacy as one of the first female graduates, and just going in into her early in pharmacy training work. Phyllis Phoebe Forster went on to become Phyllis Grant and her daughter Kathinka went on to become Kathinka Hunt.
My mother and my grandmother respectively, and I mentioned last year that my grandmother was a pharmacist, and her focus though wasn’t on pharmacy. It was on the community side of pharmacy, and it’s a very interesting thing that those enduring values of 90 years ago are just as evident and arguably even more evident today.
And what I want to do is to set out what we’ve achieved in the last year together. But what really lays the foundation, not just for the next five or ten years but for the next 90 years, in what will be a changing industry where there will always be challenges.
But I think a greater role for pharmacy as community healthcare providers as fundamental to primary care. And that’s a very important moment. And since the compact last year, I dropped in on a number of pharmacies unannounced around the country and I’ll start talking to the pharmacist about the impact of the dose administration or the meds check, or the diabetes meds check on their income, and as I was unannounced, I apologise to those who thought I was from the Tax Office. They were greatly relieved when they discovered I was only the Health Minister.
And there were no problems, but to get a sense of the impact of that agreement, and around the country, give or take, it’s between thirty and forty thousand dollars a year, the impact of the agreement that we struck with David Quilty and George Tambassis, and my own state president Anthony Tassone and Trent and others who were all involved. And so that, at a moment where there had been real pressures in your income, I think was not just an important recognition of where the pharmacy stands as a long-term partner in delivering primary healthcare in Australia. But also, a fundamental support for your sustainability.
So against that background, I really want to address three things today. One is the long-term National Health Plan and the pharmacy compact and what we’ve achieved in the last year. Two, we’re releasing the Pharmacy Review, what’s sometimes known as the King Review, although Bill Scott is here and present today, and I want to thank him and Joe Watson for their work, along with Professor King in preparing that.
And to take you through the key findings, where my fundamental principle was to be careful about the future of pharmacy to make sure we are protecting the long-term sustainability of the sector and not taking steps or risks which would be unnecessary and undesirable. And then thirdly, to look at that long-term mission of where we can go together.
And so looking at those three things, the Long-Term National Health Plan has four fundamental purposes. One is about supporting primary care, and that’s ensuring that our patients have access to the doctors, the nurses, the pharmacists and the medicines they need, when they need them, and where they need them.
And pharmacy plays a critical role in that. As part of that, we struck a series of fundamental agreements with Medicines Australia on the pricing of medicines, which was to ensure that we were able to have a provision for the long-term cost of new drugs, new medicines, whether it’s Opdivo for lung cancer, whether it’s Entresto for chronic heart failure, Stelara for Crohn’s and colitis.
Whether it is any of these new medicines such as Kalydeco for cystic fibrosis. All of which were previously unfunded, and that led to many of the pressures on your sector, on the medical sector. By resolving that with Medicines Australia, we were able to move and strike the agreement with the Pharmacy Guild and the doctors for their sectors.
And they in turn have seen us be able to list new medicines. Now, we’re at about $8.2 billion of new medicines over our time in government, but it’s not the money. It’s the fact that together, we can deliver lifesaving and life-changing medicines and you’re in a position to be able to provide advice and guidance and support, and as genuine front-line community pharmacists who are making that difference.
So the second of the pillars has been in terms of the support for private health and public health together through our hospitals. We’ve had the biggest changes in private health insurance in a decade, which has led to the lowest change in private health premiums in 17 years. More to be done, and you could hear this almost every single day, but more to be done on that front.
But those changes are about making sure that our private hospitals are sustainable and therefore our pressure on public hospital waiting lists is reduced. In turn, there’s an extra $30 billion over a five-year period for our public hospitals, and that’s immensely important. So we have support for private health, support for private hospitals, and support for public hospitals. All is ensuring that when people are not able to remain out of hospital, they get the care and the support they need.
The third of our pillars is something that pharmacists are increasingly involved with, and that’s the issue of mental health. For yourselves and your staff, this is a very important thing in terms of taking care of your own. But as primary carers, you are often the first one. You recognise the signs, you’re able to provide counselling, you’re able to provide assistance to ensure that people through the Pharmacy Trial Program in many cases have early access to early intervention.
But that careful guidance when someone comes to you and talks across the counter, and they don’t know where to go and they’re often afraid or embarrassed, the fact that you are able to give them the confidence to seek the help and to give them the pathway is one of your most important contributions to public health in Australia. And I want to thank you and acknowledge you for that work. There’ll be a very significant mental health component to the budget in what’s coming forward next week. So, we’ll be strengthening that in a series of different areas, and pharmacy will have a very important role.
Then, of course, the last of our pillars is medical research. Medical research is about this process of ensuring that Australians have early access to the latest medicines and devices and treatments. We’re seeing the new immunotherapies in cancer mean that people who’d otherwise never have had the possibility of remission or even fully defeating their cancers now have that hope, and now have that opportunity.
And so, when we see new medicines coming forward and we see new opportunities, we know that there is long term chronic care that will be required through our doctors and our nurses and our pharmacists. And the new initiatives have a very important engagement with the pharmacy sector.
So, that then brings me to the compact that we’ve struck and the big achievements over the last year. Firstly, I think George mentioned the location rules and I understand that this wasn’t just important, in many cases this was existential because it affected the viability of your loans.
And we foreshadowed at APP 2017 that we were looking to address this in the compact that we struck after literally hundreds of hours of work with George and David and the rest of the team. We made a commitment to addressing the location rules, and in February of this year, the Parliament of Australia passed the change which expunged the sunset clause on location rules, making the current rules legislated and permanent. Hopefully a few of you had a better sleep after that.
That’s being backed up by the fact that we’re now working on some of the definitions around facilities about short move relocation and within the coming six weeks, we expect with the Guild to be able to make that announcement. And again, that would be, I think, a very sensible and balanced and positive step forward for the long-term viability and sustainability of pharmacy.
So, then that brings me to the financial side. As George mentioned, the overall contribution of the Pharmacy Compact with the Government last year was about $800 million. Six-hundred-million-dollars can be freed up under the existing programs which have been held back by finance, and $200 million for dispensing fees. And that’s recognising that your costs are real, and your contribution is significant.
Under the $600 million, that supported dose administration, supported stage supply, supported MedsCheck, and supported Diabetes MedsCheck amongst other programs. I would urge you to take advantage of these programs. You’ll be able to be more effective in what you do, and deliver better outcomes through patients, and it will deliver additional income support for the community aspect of pharmacy.
And the funds are there and I would very, very strongly encourage you to join in and participate in these programs if you’re not. They are there and there is $600 million that’s in that pot that is available to ensure better health outcomes for our communities, and better support for our pharmacies. So, it’s an opportunity that I urge all of you to consider very strongly.
That then brings me to the Pharmacy Trial Program, so this is a $50 million with six components, including, amongst other things, mental health and Indigenous health support. And now we are moving forward within that. Today I want to announce that there’s a further trial in particular, in South Australia, for aged care residents who are at risk of deterioration from prolonged use of certain medicines.
So, 500 residents will be part of a nearly $3 million trial, this is called the Reminder Program, and we’re looking to take it nationally if this is, as we believe, successful. And that’s the latest iteration of the trials under the Pharmacy Trial Program. And then the last one that we’ll be bringing forward is the chronic pain MedsCheck. And that, I think, George will have done in the coming weeks, and looking forward to that. And that will round out all of those different programs.
So, that’s what we’ve achieved over the last year. The next thing I want to look at is the Pharmacy Review. I realise for many, it was not a preferred avenue. That decision was taken and it was the first such review of that scope and magnitude in almost two decades, so it was a useful process. We’re releasing that here at APP today, our response to it.
And the fundamental response is this: that my approach and our approach is to recognise that pharmacy in Australia makes immense contribution to community health, and to ensure that we take a careful approach to your future. It’s been a collaborative response, and we’ve worked through all of the different areas with the Guild, and with the PSA as well. And I want to acknowledge Shane and his team, as well as George and all of the Guild members for their involvement.
The first, and perhaps most important, of the decisions is that we will be accepting the recommendation, something that many of you have discussed with me in one-on-one situations, to change the way that high cost medicines are delivered under the PBS. The cash flow implications for you are very great.
So, what we’ll be doing is moving to a model which will ensure that there will be less cash flow in terms of your upfront payments, that will reduce the carrying costs of these medicines and the operation costs of the PBS for high cost medicines for pharmacists right around Australia. As part of that it also means that 22 per cent of pharmacies who currently are not participating in high cost medicine delivery programs on the PBS, will have the opportunity.
You may not have patients in certain circumstances, in which case, it doesn’t apply. But for those who have not participated because of the financial barriers, this will now give you the opportunity to provide better services and better access for your patients. And I think that’s a very important step. And so, all up, it also does one more thing, it allows us to have additional funds to invest in new listings and earlier listings of many of these high cost life-saving and life changing medicines.
So, it’s one of the profoundly important things which we’re announcing today, and that is likely to mean a better outcome for your cash flow, a better outcome for patients, and the ability for us to list new medicines, and to list medicines earlier. The second of the important decisions is there was a proposal in relation to pharmaceuticals and vending machines. We will not be accepting that recommendation.
And as we saw from the award winners, there’s a very, very important role for new technologies but it just would not be the same coming to APP 2019 and looking out at a bank of servers. And so, the nature of pharmacy is that that face-to-face interaction with health care providers is fundamental. And we want to ensure that there are no risks in the dispensing of medicine, that there is an engagement with pharmacists as health care and primary care providers, and that is an important long-term decision that this government has taken and will stick by.
Another proposal, which we won’t be accepting, is in relation to generic medicine tendering. There’s a very highly competitive process for the dispensing and acquisition of different generic medicines. We would be worried about moving to an exclusive tendering arrangement that that could risk the supply of individual medicines in the case of shortages, and it would risk consumer choice.
And we have a system which is highly competitive which provides consumer choice, and perhaps most importantly guarantees that in the case of, say for example, statin, which weren’t available if it was the exclusive generic and there was some issue in its production lines overseas or here, that that would risk a shortage for our patients and customers. So, we’ll be maintaining the current system. In addition, we support the recommendations that are about increased Indigenous access, and also about an increased role for electronic prescribing going forward. So, I’ll address that in a second.
The last one I think is important to mention we are not making a final decision on the issue of the dollar discount. We made a commitment to the Guild that we would work through the dollar discount review. There’s always a balance here between the costs to the patients, which we would never want to drive up, and the sustainability of pharmacy. So I don’t want to create false expectations in relation to that. I had the fundamental duty in terms of patient costs but we’ll go through that review and we’ll come down on that issue once we’ve got the review.
But all up, what we’re doing is progressing with a model which is about increasing the sustainability of pharmacies and not putting in place new threats or new challenges as you can see from the compact and the response to the pharmacy review. So, then that brings me to the vision for the future. Not just for the next five and ten years but as I said at the outset over the next 90 but we can deal with things that are likely to be opportunities and challenges over the next ten years.
One of the things is the move to a universal My Health Record where a record is generated for every Australian and some will opt out but we think by the end of the year, probably 23 million Australians or so, will be on the My Health Record. I know that some of the pharmacy branding groups are looking to have 100 per cent, 100 per cent subscription amongst their members to the My Health Record. Can I encourage all of you to register, to be part of My Health Record.
All of the software providers are fully My Health Record compliant. And what it does, is it allows your patients to have access to their own records. And who would remember when they were a child what were the particular conditions that they had if their parents are no longer around? Who would remember vaccinations they had as a child if they no longer have the little yellow World Health Organisation card or the update materials? And so this is something which will help with the health care of Australians going forwards for the next five and ten and twenty, thirty years, it will be a fundamental improvement in our health care system.
And for every pharmacist it’s an important contribution and it’s a huge opportunity to deliver patient outcomes. For those that don’t do it I think that there’s a risk that you will miss out on both the business opportunities of being involved and of course the opportunity to deliver better outcomes for your patients. So I would encourage you to register and to be part of it.
Also in relation to prescriptions what we see is that there is a real focus now to deliver real-time prescription monitoring by the end of the year. We’re funding it for $16 million and only two weeks ago all of the states agreed at the Council of Australian Government’s health meeting to sign up to be part of real-time prescription monitoring.
So with all of the states coming on board, this is fundamental to patients’ safety, it will give you peace of mind that you’re not part of a shopping arrangement and it will mean that we are able to help those who might otherwise be facing addiction with early intervention to ensure that your medicines and your work isn’t being abused and many of you have talked to me about this and we’ll be able to deliver that, I believe, by the end of the year.
And similarly we’re on a pathway to working very rapidly and constructively towards an e-prescribing regime which will ensure patient choice as to their pharmacy provider but will make it a lot easier in many circumstances where people choose to have e-prescribing and that will come directly to you.
The last of the initiatives going forwards is I can announce today that the pharmacy health care homes trial, a $30 million initiative, will be begin 1 July of this year. The rate has now been settled, just over $830, I think $837 for a tier 3 patient and the other rate will be part of a package.
I invite you to be part of the Health Care Homes trial. It’s about the notion of again, improving primary care across our GPs and our pharmacies and we specifically set out last year to expand this model to the pharmacy sector and I’m really thrilled, really thrilled, that we’ll be able to do that together.
So all of this takes me back to the ultimate vision and the ultimate vision is to ensure that your businesses are sustainable because that allows you to then be true community pharmacists and if you’re community pharmacists you’re able to provide the mental health support, sleep apnea support, the diabetes support, the counselling, the advice and ultimately to deliver better health outcomes. Now that’s great for the country but above all else for each individual patient it matters to them.
So at this moment at this time after we’ve had a tremendously successful year together, I thank you and acknowledge you, but I also want all of you to take a moment to reflect with great pride on what you are doing to improve the health of Australians across this country. For that I want to thank you and I am thrilled and delighted to officially declare open APP 2018.