Community Service Obligation

As part of the Fourth Community Pharmacy Agreement (the ‘Fourth Agreement’) between the Australian Government and the Pharmacy Guild of Australia, the Government provided funding for a Community Services Obligation (‘CSO’) Funding Pool in addition to the wholesale mark-up included in remuneration for pharmacists. 

The objective of the CSO Funding Pool is to ensure that arrangements are in place to provide all Australians with ongoing and timely access to the full range of PBS Medicines via their Community Pharmacy. The CSO Funding Pool provides financial support to pharmaceutical wholesalers supplying the full range of PBS Medicines to Community Pharmacies across Australia, regardless of pharmacy location and the relative cost of supply. The CSO Funding Pool helps to ensure that:

1. Low Volume PBS Medicines are delivered to Community Pharmacies anywhere in Australia; and
2. all PBS Medicines are delivered to Rural and Remote Community Pharmacies.

The Commonwealth has committed to the ongoing operation of the CSO Funding Pool until June 2015 under the Fifth Agreement.

CSO Distributors are national or state based full line pharmaceutical wholesalers that are obliged to meet compliance requirements and service standards to access the CSO Funding Pool.

The CSO Service Standards and CSO Compliance Requirements define the minimum services, standards and operating arrangements and include a requirement to stock the full range of PBS items (as defined under the CSO) and to deliver them to any pharmacy in Australia (except a few very remote locations) generally within 24 hours of ordering from regular order cut-off time.

The CSO Service Standards are:

1. Supply any Community Pharmacy within their national or state based CSO jurisdiction.
2. Supply any brand of any PBS Medicine (as defined under the CSO) on request.
3. Maintain specified stocks of PBS Medicines.
4. Supply PBS Medicines at or below the Approved Price to Pharmacist.
5. Supply PBS Medicines generally within 24 hours.
6. Make available a daily delivery service to Community Pharmacies within their CSO jurisdiction as part of its standard service delivery infrastructure.
7. Supply Rural and Remote pharmacies.
8. Supply Low Volume PBS Medicines.

The CSO arrangements are administered by an independent Administration Agency. Pharmacists may lodge complaints about CSO distributors with the CSO Administration Agency.