Health bureaucrats clash with Greens over likely impact of script price rise

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Officials tell inquiry there is no evidence a higher co-payment on subsidised medicine would prevent people filling prescriptions

Tub of pills
The federal Department of Health says there is no evidence people stop taking medication if prices increase. Photograph: Joe Raedle/Getty Images

Health department officials have played down fears the planned increase to the existing co-payment on subsidised medicines could deter people from filling their prescriptions.

The testimony to a Senate inquiry on Tuesday followed earlier warnings from pharmacists, health researchers, community groups and advocates for older Australians that the proposal risked affecting patients’ compliance with prescriptions issued by doctors.

Officials said there was inadequate evidence to suggest patients were failing to fill scripts due to cost, prompting the Greens senator Richard Di Natale to claim the arguments belonged to the “flat earth society”.

The government expects to raise $1.3bn over four years by increasing Pharmaceutical Benefits Scheme (PBS) co-payments and safety net thresholds from 1 January 2015. That money is to be channelled into the new medical research future fund.

The $37.70 co-payment for general patients would increase by $5 to $42.70 if the legislation was passed. For concessional patients the $6.10 co-payment would increase by 80c to $6.90.

The Coalition plans to prioritise debate on the measure when the Senate resumes next week, but faces a challenge to secure adequate support given concerns raised by Labor, the Greens and the Palmer United Party.

The PBS increases are a separate measure from the proposed new Medicare co-payment for GP visits. In the case of the $7 GP co-payment the government has argued that a “price signal” is needed.

The Senate’s community affairs legislation committee, which is examining the PBS bill, heard concerns about cost from several groups in Canberra on Tuesday.

In June a report of the now-defunct council of Australian governments (Coag) reform council suggested one in 12 Australians had delayed or avoided filling a medical prescription because of cost, a decision that was twice as likely in the most disadvantaged areas compared with the most advantaged areas.

But the Department of Health’s acting deputy secretary, Richard Bartlett, took issue with many of the submissions to the inquiry for suggesting that there was significant evidence of patients already not filling scripts due to cost.

“The fact is there is very little hard evidence to support this claim,” Bartlett told the hearing. “The vast majority of submissions refer to anecdotal evidence or unpublished survey data which is almost impossible to scrutinise or break down. For example the main reference provided in the majority of submissions is the Coag reform council analysis. The fact is this analysis is also based on unpublished survey data.”

Felicity McNeill, the first assistant secretary of the department’s pharmaceutical benefits division, disputed assertions about the impact of a big increase to PBS co-payments in 2005.

McNeill said the surveys at that time only looked at data about medicines that exceeded the co-payment levels. “It hasn’t allowed for the fact that a number of drugs went under the general co-payment so actually in those areas we found there was an increase in the use of those drugs,” she said.

McNeill said some products increased and others decreased and a range of factors may be behind those trends.

Di Natale, one of the senators conducting the inquiry, told officials: “Are you suggesting seriously that an increase in the PBS co-payment is not going to have an impact on compliance [by patients]? Are you seriously suggesting that?”

Bartlett replied: “If you listen to what Ms Neill said about 2005, senator, I’d be questioning on what you would expect me to base an answer that says ‘yes there will be an increase in non-compliance’ … There is no evidence from 2005 that will allow you to say there is a decrease in compliance there that we can therefore extrapolate to this one.”

Di Natale said: “We’re with the flat earth society here.”

The Grattan Institute’s health program director, Stephen Duckett, who is a former senior health bureaucrat, said earlier that there was “extremely strong evidence that co-payments stop people getting the medicines that their doctor ordered”.

Duckett’s joint submission with health fellow Peter Breadon said: “A recent systematic review looked at 19 studies in nine countries. All but two of these studies found that co-payments reduce the number of people who take medications their doctor ordered.”

The submission also said in its summary: “There is strong evidence that out-of-pocket costs stop people getting healthcare, including necessary care. While they save money in the short term, they mean that some people miss out on care they need. In the long term, government risks paying more.”

The Pharmaceutical Society of Australia, which represents pharmacists, said it was concerned that PBS co-payments had already “reached such a high level that there is a danger of patients foregoing some of their necessary medications due to cost”.

The submission by the society’s chief executive, Lance Emerson, raised concern that the Department of Health did not specifically model the impact of the proposed co-payment changes on patient behaviour.

Combined with the proposed Medicare co-payment for GP visits, out-of-hospital pathology and diagnostic imaging services, “vulnerable patients may be forced into a situation where they need to make a financial decision about seeking medical attention or continuing with their medications instead of focusing on their health”, Emerson said.

The Pharmacy Guild of Australia – an employers’ organisation representing community pharmacies – said it was “appropriate that a price signal exists, and that a safety net is in place” but noted that “increases to PBS co-payments and safety nets may discourage patients from purchasing their prescribed medicines, leading to non-adherence to a medication regime”.

“Any increase in price signals should be accompanied by a greater commitment to the funding of well-targeted medication management and support services, focused on those patients in greatest clinical need who have the highest risk of non-adherence to their medicines,” the guild said in its submission.

The Council of Social Service of New South Wales told the inquiry cost barriers to medicines would “lead to more preventable and expensive health problems and increased costs to the health system long term”. The council said higher health costs could force people living poverty to choose “between filling a prescription, buying food, or paying an electricity bill”.

The Council on the Ageing (Cota) Australia said increases to the out-of-pocket expenses for both non-concessional and concessional patients could not be viewed in isolation.

“Older people will incur these increases at the same time as the government is planning to introduce co-payments for GP visits and related diagnostic tests and decrease the value of the pension through changes to indexation and other initiatives,” the submission said.

“Cota is opposed both to the increases in co-payments and increases in the safety net thresholds. Getting the right medication at the right time should not depend on your ability to pay for it and people should not have to choose between food, heating and medications.”

But Bartlett argued the proposed increases were “reasonable and proportionate” and should be “considered in the context of maintaining access for patients to medicines that would otherwise be prohibitively expensive for most Australians”.

Bartlett said the unfunded pipeline of new medicines, an ageing population, and increased incidence of chronic disease would put continued upward pressure on the government’s PBS costs.