The Pharmaceutical Benefits Scheme is an integral part of the health system in Australia, providing consumers with affordable and timely access to over 857 medicines. These medicines are available to all Australians regardless of location at a universal and accessible price.
Reductions in Australian medicine prices often lag behind those of many other advanced countries. For example in the case of Atorvastatin, currently the most highly prescribed and highest cost to government medicine in Australia, New Zealand pays $2.01 in comparison to the price paid in Australia of $38.69.
Government spending on pharmaceuticals has risen substantially since the scheme was introduced and has more than doubled in the last 10 years alone. It has historically been one of the fastest growing areas of government expenditure and is expected to be so in the medium to longer term.
More needs to be done to ‘create room’ for new medicine listings by rationalising existing listings or re-negotiating new prices. Under current arrangements, once a medicine is recommended by the Pharmaceutical Benefits Advisory Committee, there are expectations that the Commonwealth Government will list it.
Recommendation 19: The Pharmaceutical Benefits Scheme
The Commission recommends changes be made to the Pharmaceutical Benefits Scheme and to the pharmacy sector to improve this integral part of our health system through:
- the introduction of new arrangements for funding the Pharmaceutical Benefits Scheme within a set funding envelope that extends for a seven year cycle;
- establishing an independent authority (‘PBS Entity’) to be headed by a suitably qualified Chief Executive Officer who would oversee management of subsidised pharmaceuticals within the Australian health system and be required to report to the Minister for Health;
- permitting the Minister in exceptional circumstances to have new items listed by introducing a disallowable instrument into Parliament and on receipt of advice from the PBS Entity regarding items to be de-listed in order to offset additional costs;
- increasing co-payments for all medicines under the Pharmaceutical Benefits Scheme, including for concessional medicines that are currently free. This includes:
- I. for general patients with costs below the safety net, a co-payment increase of $5.00 (increase from $36.90 to $41.90), while above the safety net a rise of $5.00 (from $6.00 to $11.00);
- ii.in line with the increased co-payment arrangements, the general patient safety net should increase from $1,421.20 to $1,613.77; and
- iii. for concession card holders, no increase to the current co-payment of $6.00 while below the safety net threshold of $360.00. However, once the safety net limit has been reached, concession card holders will be required to co contribute $2.00 to the cost of their medicines;
- opening up the pharmacy sector to competition, including through the deregulation of ownership and location rules; and
- streamlining approvals for new drugs through the Therapeutic Goods Administration process by recognising approvals made by certain overseas agencies.
Source: NCO