Andrew Laming (Bowman, Liberal Party) Share this | Hansard source

I rise in support of this National Health Amendment (Pharmaceutical Benefits) Bill. We have just heard from the 'member for denial', unable to admit that we have a financial challenge in this country. It is as if members on the government side wake up in the morning and dream of ways to make it tougher for people to access health care. Nothing could be further from the truth. We have inherited a budget bottom line that is in dire need of answers. Even in opposition that side of politics is showing that it cannot contribute to the national conversation about how we restore the budget bottom line and get ourselves back to balanced budgets.

With this National Health Amendment (Pharmaceutical Benefits) Bill there is a one-time increase on 1 January 2015 to the pharmaceutical co-payment for concession and non-concession holders. It is not the first time it has been done. The actual notion of a co-payment was introduced by, yes, the party that you hear railing against us today. The notion that pensioners should pay a co-payment was introduced by the party over there that is railing against these changes today. As recently as 2004, the member for Shortland was in this chamber supporting an increase to the co-payment. She was here, supporting that increase, when it suited her. The member for Shortland—short on detail, short on a clear understanding of how the PBAC even works, and short even on an understanding of how cabinet processes work in approving drugs—is no person to convince the Australian public that these changes are not absolutely vital.

We only have to go back to 2011—there are very short memories in the chamber sometimes—when the Labor Party had their shot at making the PBAC sustainable. The PBS system, approaching $9 billion a year at the time, needed some answers for sustainability. So it is worth turning to the language of the then Labor health minister, when they were coming up with their own solutions. They said, 'In the next 12 months we will work on a long-term plan to keep costs down.'

So let's do a little bit of comparing and contrasting. What we are talking about today is just slightly increasing the co-payment—less than $1 for those with concession cards, which is about 40 to 50 per cent of Australians. Let's see how Labor responded to a similar challenge. Labor's idea was not to listen to the experts of the PBAC by taking their recommendations and blindly and non-politically introducing newly listed drugs, once they were approved as being safe, of high quality and cost effective. No, Labor decided to reinvent that process. The first thing the Labor government did was to grind back the approval of new listings. I concede there were already some falls in listings in 2006 and 2007, but what the Labor Party was really good at in government, and I am sure they are so very proud of it, was reducing the number of drugs listed. They ground them down and made the approval processes longer and longer and more convoluted to do everything they could to stop the drug being listed and having a financial impact on their bottom line. There will be thousands of Australians, no, millions, who will have been affected by that short-sighted conduct. They will never have a voice in this chamber.

When that did not work, they came up with a new idea—it was called deferral. That is when the expert body, the PBAC, fully evaluated products—considering safety, quality, efficacy and cost effectiveness and struck a price with the pricing authority—and then the Labor government said, 'No, we refuse the recommendation of the expert body.' They politicised the process for the first time, and bad luck to you if you had a child who is failing to thrive, or if you are suffering from HIV, TB, lung disease, renal failure, diabetes, schizophrenia or depression. 'Bad luck. We are not delivering this drug to you for no other reason than that we have decided in cabinet that we are just not going to sign it off.' That is what the PBAC process descended to under Keven Rudd, and then Julia Gillard—to tell those patients that there is no other reason except that these humble seven drugs were not life-saving. Rub that in the face of a person suffering from a life-long condition, where this global breakthrough is now deemed by the experts to be cost effective. Never in history has that been done before.

I will concede that there had been delays to listings, particularly under ATAGI. We had a large run of fascinating absolutely transformative vaccines in the early 2000s and there were delays to listing these vaccines, but they sat on the cabinet table until they were passed, and passed they were. But that is not how the Labor Party operated. They told the drug companies to go jump and they told the patients they could wait. To top it all off, like topping on dessert, the insult to them was that they said, 'That is not a refusal. We have not refused your drug. We have just deferred it and we are not going to tell you when we are going to approve it.' A deferral without a date is a downright rejection—I do not care what the Labor Party wants to call it.

We have moved on from that. Under the coalition government we already have approved 131 listings in the short time we have been in power. Why? Because money does not get in the way of an expert's recommendation, unlike with the Labor Party. They never had the courage or the heart to come in here and talk to patients suffering from those conditions. No, they just said, 'It was a deferral. You can wait and we will not tell you how long.' That is the epitome of heartlessness and lack of consideration.

Isn't it ironic that we are debating the amendment to the co-payment for the PBS on the day when Labor walked in to a brick wall by moving this afternoon their MPI on health. There we had the doctors versus the autocrats. We had the coalition speakers, who know how the health system works, up against a mob who have done nothing more than lead union rallies at the instruction of the nurses union. And didn't they walk into a brick wall when they faced the health minister, who told them in no uncertain terms that this was a put-up MPI to serve their union mates?

Today what we are debating, obviously, is sustainability. I can remember that five years ago we were all fearful of a massive increase in the PBS—life-saving drugs were coming through and at the turn of the century we had what we call the blockbuster drugs. No sooner had they arrived, nor come off patent, but we were being hit by the companion diagnostics and the designer drugs. The PBS trajectory was diabolical. It was a single intervention by then health minister Tony Abbott—simple price disclosure—that resulted in the change in trajectory that has brought some semblance of normality back to the increase in the PBS budget. Without going into great detail, price disclosure is simply the requirement that pharmacies disclose the prices at which they are receiving the drugs from the wholesaler, so that the government knows that they are genuinely reimbursing the pharmacist for the cost of that drug and not for a fake cost that is listed by somebody else. Instead of significant transfers over and above the cost a pharmacist was paying, we are now asymptotically moving back to the real cost of that drug to the pharmacist, and reimbursing it accordingly.

But tonight I need to concede, including to pharmacists in my electorate, that that has to have an effect on the bottom line. We may well have tamed the PBS budget, but we know that with these changes many community pharmacists are doing it really hard. Because of the way price disclosure is cyclical, these prices are closely and more closely approximating the real price on every 18-month cycle. So there still are significant challenges ahead for pharmacists in our communities, who understandably were relying on those terms-of-trade transfers. That was built into their bottom line. That is how they were running their budget and employing their staff. So I have great concern for our pharmacists. I accept that there will be a period of great transition, but ultimately I guess our responsibility to the taxpayer is to pay the price that is listed when it is handed to the pharmacist. In return, the reimbursement needs to match that amount.

We also need to remember—it is often forgotten—that the $5 increase to the co-payment, which is currently sitting at $36.90, only applies if you are buying a drug that costs more than that amount. I am lucky and my family is lucky—we have not needed to purchase truly expensive drugs. If they are very expensive you do not pay more than the co-payment. But the important point to mention is that a huge number of drugs cost less than the co-payment, in which case increasing the co-payment has no impact at all. Up to 55 per cent of all the drugs listed are actually cheaper than the non-concessional co-payment level. That means there is no effect if you increase the co-payment. It is only in those rare circumstances, where people are filling scripts for drugs worth more than $41.90, and increasingly that is a rare event. For those who are non-concession card holders, it is about two prescriptions a year. It is worth remembering that we are not dealing with people who are carrying in dozens of prescriptions and filling them every month. For those patients we do have the PBS safety net, and I concede that each year we are increasing the threshold by two prescriptions. But, for the many people that access the safety net, it is a lifesaver. Once again, it was a coalition initiative to bring that co-payment to the health system.

If I had to choose a health system I would not want to be anywhere else but in Australia. The four pillars—the PBS, the MBS, public hospitals and private health—do an incredible job. The PBS system has presented us with significant challenges. Even now, manufacturers say to us, 'In Australia, we know that if we can get listed on the PBS that represents almost instantaneous penetration of a 23 million population.' Australia remains very much a jewel in the crown of approvals. All around the world they accept that, while there may be delays, it is worth striking a price in Australia because of how efficiently our PBS serves our population. Take it from those that are supplying our PBS as much as from those who are purchasing from it.

The other great message we are hearing is: please, rapidly approve the life-saving, breakthrough drugs that are making a difference, even if we have to look again at the generic market. If Australia does have a weakness in our system, it is that we strike a very strong price with original approvals, but once we pass what we call the off-patent period, at that point we continue—because of price referencing—to probably pay more than those generic drugs either cost to produce or are worth. If you compare the generic prices in this country to those overseas, we still have a long way to go. Price referencing is playing a role, but we still have further to go. We now have international generic manufacturers moving in and putting local domestic generic manufacturers under pressure. That is hard too. In the end Australia has to say that we need to inspect the facilities that are manufacturing pharmaceuticals around the world. They need to get their TGA approval. After that it is a free market. So Australian manufacturers are responding accordingly. Increasingly we are making a smaller range of pharmaceuticals and exporting them overseas, particularly to places where people value the 'Made in Australia' stamp on a pharmaceutical, which is not insignificant given that we have had challenges even here in Australia with imported drugs that, in the end, we discovered were manufactured in less than safe and appropriate conditions.

I made very brief mention—and it does need more ventilation in this place—to the notion of companion diagnostics. This is increasingly the tailoring of pharmaceuticals to specifically treat a condition that you may have that is identified on your genome. This will mean smaller and smaller numbers of patients that benefit from a discovery, and obviously to recoup costs you will see manufacturers increasingly wanting a higher and higher price for their treatments and cures, because they know it has effectively a 100 per cent success rate. One of the great challenges and, if not, may I say a failing of current drug-funding arrangements is that historically we pay for the drug whether it works or not. We are heading to paying for an outcome. Increasingly government will be identifying the subpopulations that respond to treatment and rewarding pharmaceutical companies for that. But we are not going to be writing blank cheques or bigger cheques for treating people where a clinical outcome is not achieved.

None of us went into politics to increase a co-payment. None of us went into politics to increase any form of charge if we could possibly avoid it. But I am sensing that the Australian people are beginning to appreciate that these were decisions we were forced to make. When we woke up after the election we knew we had a momentous job. I concede that convincing people that $667 billion is a large figure is not an easy task, not at all. Nor is it easy to take even the smallest payment or entitlement away from any individual that I know or that I meet in the street. But these are modest, small, well-calculated, well-thought-through changes. And they are changes that have been made before. They are changes that have been supported by the Labor Party. For heaven's sake, the co-payment is a creature of the Labor Party. Making pensioners pay a co-payment is a creature of the Labor Party. To hear the member for Shortland with the same tired old talking points just shows a party yet to realise where they are, yet to realise that they have to be part of a national dialogue around solutions. As much as they can come up with the cheap stunts now about cuts, in the end they will have to add up their own recommendations and what they have voted for, and this will come off their own bottom line as an opposition party.

For now, we will do the hard yards. For now, we will lean against the wall of reform and make sure that we have a sustainable PBS, because we are up for it. Thank goodness the opposition are not and they are on the side of this chamber where they belong for the moment. We will make the tough decisions with the PBS and with Medicare, but we are going to make it sustainable as a result. As people look through the detail they will realise that the combination of a safety net and these small changes will keep our beloved PBS in Australia for a long, long time to come. It is a global showpiece, and I defend its sustainability tonight.

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