The CSO Funding Pool commenced on 1 July 2006.  It was established under the Fourth Community Pharmacy Agreement (4CPA) and continued under the 5CPA, 6CPA and 7CPA.  The 7CPA was a five-year agreement between the Australian Government, the Pharmacy Guild of Australia and the Pharmaceutical Society of Australia. The Australian Government recently announced that from July 2024 the CSO arrangements will continue to be funded under a new agreement – the First Pharmacy Wholesaler Agreement.

The CSO Funding Pool provides funding of over $200 million per annum to eligible CSO Distributors that meet specific Service Standards for the delivery of Pharmaceutical Benefits Scheme (PBS) medicines to community pharmacies.

Its purpose is to ensure that all Australians have timely access to the PBS medicines they need, regardless of where they live. This is achieved through ensuring that all of Australia’s 5,800 community pharmacies can order any brand of PBS medicine, and receive delivery within 24 to 72 hours. These arrangements fulfil more than 200 million subsidised pharmaceutical prescriptions each year.

The CSO Funding Pool makes it commercially viable for pharmaceutical wholesalers to supply the full range of PBS medicines to pharmacies across Australia, regardless of pharmacy location and the relative cost of supply. Under these arrangements, CSO payments are provided directly to wholesalers who supply the full range of PBS medicines to any pharmacy, within 24 to 72 hours, and who meet certain Service Standards.

AHA has administered the CSO Funding Pool since 2007.  This role involves several complex functions, including:

• Securely collecting, storing and analysing around 2 million lines of confidential data per month
• Undertaking payment calculations
• Monitoring the performance of eligible CSO Distributors against the CSO Service Standards and Compliance Requirements
• Administering a complaints process and sanctions framework.

The CSO Service Standards and Compliance Requirements define the minimum services, standards and operating arrangements that CSO distributors must meet.  They include the requirement to stock the full range of PBS items and to deliver them to any pharmacy in Australia (except a few very remote locations) within 24 to 72 hours of ordering.