Community Service Obligation (CSO) Funding Pool


Community Service Obligation (CSO) Funding Pool


Community Service Obligation (CSO) Funding Pool

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 now 7CPA.  The 7CPA is a five-year agreement between the Australian Government, the Pharmacy Guild of Australia and the Pharmaceutical Society of Australia.

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.

CSO Service Standards

CSO Distributors are required to:

  1. Supply to any Community Pharmacy within their national or state jurisdiction, including Rural and Remote pharmacies
  2. Supply any brand of any PBS Medicine (as defined) on request, including Low Volume PBS Medicines
  3. Maintain specified stocks of PBS Medicines
  4. Supply PBS Medicines at or below the Approved Price to Pharmacist
  5. Supply PBS Medicines promptly, within 24 to 72 hours
  6. Make available a daily delivery service to Community Pharmacies within their national or state jurisdiction as part of its standard service delivery infrastructure.

Further Information

Further information about the operation of the CSO Funding Pool and the obligations of CSO Distributors is available from:

The Department of Health

The Seventh Community Pharmacy Agreement (7CPA)


Community pharmacies are able to lodge a complaint about the performance of any CSO Distributor (wholesaler) against the CSO Service Standards and Compliance Requirements.  You can download our complaints policy.

Complaints can be lodged in writing, either

electronically to:
or to:
Complaints Officer
CSO Funding Pool Administration Agency
Locked Bag 32005
Collins Street East, VIC 8003

Alternatively, please contact us on 1300 309 213.

Further details about lodging a complaint are available from the Department of Health.