Jill Hall (Shortland, Australian Labor Party) Share this | Hansard source

At the commencement of my contribution to this debate on the National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2007 I would like to acknowledge the role that the member for Pearce plays in her leadership in the Parliamentary Diabetes Support Group and for the fine work that she has done in that area. I know that she is very committed to seeing that there are enormous advances in the treatment and diagnosis of diabetes in Australia. Her contribution within and outside of the parliament has made an impact and will continue to make an impact. I felt that it was important to acknowledge her contribution in that area.

The member for Pearce highlighted the tensions that exist. It is not only with diabetes; it is also with cancer, epilepsy and many other diseases that exist within our community. Each and every day, members of this parliament are approached by their constituents about one drug or another that could possibly benefit the illness that they suffer from. These drugs are assessed by the Pharmaceutical Benefits Advisory Committee and then they can be listed on the PBS if they are deemed suitable. That goes to the core of the issue. There is that tension that exists between medications that provide hope to all Australians and the other side of the argument, that there is a cost associated with them. For any government, no matter what their persuasion, the one thing that confronts them is the balancing of that: providing the best possible medication to all Australians whilst on the other hand ensuring that the Pharmaceutical Benefits Scheme survives. This has been a conflict for all governments, be they Labor governments or Liberal governments, over a long period of time.

I will touch a little on the Pharmaceutical Benefits Scheme. As we all know, it provides universal access to prescription medicines for all Australians, in the same way that Medicare provides universal access for Australians to obtain health care. It is one of the central components of the Australian health system. It has operated for almost 60 years. It evolved from a limited scheme that provided access to lifesaving drugs and disease prevention, and which commenced in 1948. These drugs were free of any charge and they were available to all Australians. Since then, the scheme has changed in the way it operates. It provides access to many more drugs. It provides access currently to 600 medicines that are available in 1,800 forms and are marketed under 2,600 different brand names. Approximately 160 million prescriptions were prescribed in the year 2005-06. That is a lot of prescriptions. That is providing benefit to a lot of Australians. I think that we need to recognise just how vitally important the Pharmaceutical Benefits Scheme is in Australia.

A hundred prescriptions come off patent over the next decade. This creates some form of conflict or tension, as has been mentioned by previous speakers. The coming off patent of these prescriptions over the next decade creates the opportunity for more generic drugs to be listed. I am a person who is very supportive of the use of generic drugs, as I think are most people within this parliament. Any way their use can be further enhanced should be supported. The cost of a prescription is $30.50 or, for pensioners and concessional patients within Australia, $4.90. This is visited twice a year, and additionally in special circumstances, such as in 2005 when there was the 30 per cent increase in the cost of prescriptions. The prices are constantly revisited because it is essential that the government is able to maintain the Pharmaceutical Benefits Scheme in the way it has over the years. It is so important to us as a nation that the Pharmaceutical Benefits Scheme remain viable.

The government has estimated these proposed changes will save $580 million over the next year, or a projected $3 billion over the next four years. The sustainability of the Pharmaceutical Benefits Scheme is what this legislation is all about. As I have mentioned, governments over the years have been very mindful that the Pharmaceutical Benefits Scheme is one of the best schemes in the world for providing medication to a nation’s people. I think it is imperative that we do all in our power to ensure that it remains sustainable.

It has been deemed that the cost of the Pharmaceutical Benefits Scheme is going to continue to increase. There was a high percentage increase in the amount that was spent on the Pharmaceutical Benefits Scheme a few years ago when Celebrex was listed. Quite often you will find that when a specific drug is listed on the PBS there will be an increase in the amount that is being spent on the PBS.

The Intergenerational report initially projected that 3.4 per cent of GDP would be spent on the PBS by 2044-45. Instead that has now been revised down to a 2.5 per cent increase in GDP for the same period of time. So the government should show some caution when it is looking at the future increases in the Pharmaceutical Benefits Scheme. As I mentioned, the listing of Celebrex was one drug that caused a spike in the PBS.

Sustainability has always been the common theme of governments. Legislation is aimed at containing costs and ensuring the sustainability of the scheme. Options to ensure the sustainability have over the years been the introduction of a copayment; competition through the development of a generic industry in Australia, which I think we should be totally committed to; programs aimed at changing prescribing practices; improved monitoring of entitlements to pharmaceutical benefits; and deletion of certain items. I think we have to be very careful when certain items are deleted from the PBS. The deleting of calcium supplements has caused some concern among many of my constituents.

Going to the actual details of the bill, it is one component of four interconnected measures in the government’s announced reforms of the Pharmaceutical Benefits Scheme. It gives Australians continued access to new and expensive medicines, while ensuring that the PBS remains economically sustainable into the future—a point that I think I have probably laboured to date. It is a creation of formulas for classification of medicines, primarily in dividing innovative and generic medicines; removal of ongoing price links between formulas; introduction of pricing mechanisms to reduce price to government; staged price reduction for medicines according to formula classification and requirements as to price disclosure for all new brands; principles for the calculation of weighted average prices; requirements for suppliers of new brands of medicines listing on the PBS to guarantee supply for a minimum period; and imposing penalties for the failure to meet these criteria.

The legislation also deals with restructuring the PBS to form two formulas to differentiate between single- and multiple-brand medicines, reducing the price that the government pays for medicines that are subject to competition between suppliers. We all know that this competition is vital if we are to keep a lid on the price of our pharmaceuticals. The bill also deals with providing a structural adjustment package for pharmacies and pharmaceutical wholesalers, including support for online claiming and initiatives to dispense medicines that do not have additional patient charges. These charges were implemented through amendments to the community pharmacy agreement signed on 2 March. It also deals with streamlining authority approvals for some medicines, reducing red tape and giving doctors more time to spend with their patients. Medicines that are subject to the new streamlining authority provisions will be listed in the regulations, I understand. It also deals with establishing a working group to consider issues relating to continued access to new and innovative medicines for Australians through the PBS, and the government has made some of these announcements already.

I think it is important to note that, whilst we are very supportive of any legislation that is going to ensure the sustainability of the Pharmaceutical Benefits Scheme, I have a slight concern that the government did not provide information on alternative pricing reforms. I note that the shadow minister for health will be looking to see whether or not we need to move any amendments after the legislation has been examined by a Senate committee. The fact that no alternative information was provided made it difficult to evaluate the rationale for the measures in this bill in relation to other possible approaches and to get a very clear sense of the government’s purpose for introducing the legislation.

The separate formulas will achieve some savings, hopefully, and ensure that PBS medicines are available. They should force some price cuts—and I know that is the rationale of the government—due to a more competitive environment with multibrand medicines where they are being frequently sold to pharmacists.

One other point that I would like to place on the record is that the use of pharmaceuticals actually reduces the nation’s health costs. Unfortunately, we have a dual system of government: the federal government is responsible for the Pharmaceutical Benefits Scheme, Medicare and other aspects of our health scheme; and the states are responsible for our hospitals. I would argue very strongly that the use of pharmaceuticals actually reduces the burden of illness on Australians and therefore reduces the burden of illness on our health system.

I think it is very difficult to actually understand and fully calculate how the use of pharmaceuticals impacts on the overall cost of providing health care to the nation, and I would be very interested to see some research done in that area. It may highlight that, whilst the PBS is increasing and whilst there is definitely a need to ensure that it does not skyrocket out of control—otherwise we will not have the PBS system that all Australians enjoy—it is also very important to look at the benefits to our health system of having drugs supplied through the PBS. Quite often in this House we just look at the cost and compartmentalise different aspects of the health system and different aspects of government. My argument is that we should be very mindful of the vital nature of the PBS and of the benefits it supplies to the Australian people. I think it actually does reduce health costs in other areas and that we should be mindful of that fact.

I can see the Minister for Health and Ageing is in the House and that he would like to sum up on this legislation, so I will conclude my comments at this point. In doing so, I would like to re-emphasise that we need to constantly embrace new medications and new treatments. We need a very strong PBAC out there to evaluate medicines and to make sure that those that are listed on the PBS will deliver the desired outcomes not only to the people who will be taking those medications but to the government as a whole. In addition, we need to recognise that a conflict of interest exists between the cost of medications, health outcomes and the sustainability of the Pharmaceutical Benefits Scheme. But at all costs we must ensure that the PBS remains strong and that it is there to support the Australian population into the future.

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