New introduction to the PBS launched today

A new publication which explains the scheme for subsidising medicines for Australian  patients has today been launched at Parliament House in Canberra by the Medicines Partnership of Australia.

An Introduction to the Pharmaceutical Benefits Scheme provides a simple explanation of how the PBS works in Australia. The paper includes the history of the PBS, what it does, the key participants in the manufacturing and supply process, and key issues for the Scheme going forwards.

In launching the report, the Chair of the Medicines Partnership of Australia, Ralf Dahmen, explained that it was designed to help people understand how the PBS works.

“We wrote this guide because while the PBS is often debated in the community, a lot of this debate is often technical, sometimes ill-informed, and difficult to follow for those who don’t understand how the Scheme works,” Mr Dahmen said.

“Many of us here today personally owe our health and productivity to medicines subsidised through the PBS, and all of us have relatives, friends and constituents who rely on the Scheme to obtain the medicines they need.

“So this Introduction is designed to help people get their heads around what the PBS does, and how it operates in practice.”

The Medicines Partnership of Australia (MPA) is an alliance of peak industry associations representing key members in the supply chain that deliver medicines and pharmacy expertise to Australian consumers. Its members include Medicines Australia, the Australian Self Medication Industry, the National Pharmaceutical Services Association, the Pharmacy Guild of Australia, the Pharmaceutical Society of Australia and the Generic Medicines Industry Association.

The publication, An Introduction to the Pharmaceutical Benefits Scheme, can be found on the MPA website.

27 February 2014

Requests for hard copies should be directed to Alexia Vlahos

PBS expenditure is contained and sustainable

Government expenditure on the Pharmaceutical Benefits Scheme (PBS) is currently not only sustainable, but actually declined last financial year.

In the past few months, major reports from three separate government agencies have confirmed that PBS expenditure is contained and that price disclosure is delivering savings far in excess of what was expected.

The regular Medicines Partnership of Australia (MPA) PBS Scorecard update released today outlines the current state and trajectory of PBS spending, as confirmed by the Department of Health, the Federal Treasury, and the Productivity Commission.

The Medicines Partnership welcomes the statement from the Minister for Health, Peter Dutton, that Australia needs “to have a national discussion about who pays for what and how the Government pays going forward.”

As part of that national discussion it is important to acknowledge that price disclosure has been and continues to be an extremely effective tool in ensuring that PBS expenditure remains contained and sustainable.

The most current update on PBS expenditure is in the Medicines Partnership of Australia scorecard, issued today.

The Medicines Partnership of Australia is: The Pharmacy Guild, Medicines Australia, the Generic Medicines Industry Association, the Australian Self-Medication Industry, the Pharmaceutical Society of Australia and the National Pharmaceutical Services Association.

20 February 2014

Media inquiries: Greg Turnbull 0412 910 261

PBS: A Budget bright spot

Amid the gloom of collapsing Commonwealth revenues, the Pharmaceutical Benefits Scheme has provided a sustainable bright spot for the Federal Government.

This week’s Budget provided confirmation of the significant impact that PBS price reforms are having on PBS expenditure, delivering the Government an additional $2.5 billion saving over four years.

None of this expenditure write-down has come from new savings measures – most is delivered by the existing program of price disclosure which reduces the prices the government and consumers pay for off-patent medicines.

The goods news on the PBS is outlined in the Medicines Partnership of Australia PBS Scorecard – which will be available here (please follow link)

The Budget papers reveal that the Commonwealth’s savings from price disclosure will increase from $296 million in 2013-14 to a massive $1.1 billion a year in 2016-17, underpinning the sustainability of the subsidised medicine scheme.

The aggregate savings from price disclosure, including the MOU with Medicines Australia, are now estimated to reach $4 billion over the forward estimates period.

Currently, the real rate of growth in pharmaceutical benefits expenditure is only 2% a year, despite Australia’s ageing population, and an estimated 6% annual growth in PBS volumes. This rate of growth is significantly lower than the overall health system and other major health expenditure drivers such as the Medical Benefits Schedule and public hospitals.

The Budget revealed that for the second year in a row, the Government has significantly lowered its own estimates of the likely future costs of the PBS.

For example, the Government is now estimating that pharmaceutical benefits and services costs will be at least $1 billion a year less than it estimated only two years ago.

These Budget figures dispel once and for all the poorly researched reports that have been released over recent months wrongly claiming that there has been a lack of real reform to bring PBS expenditure under control.

Expenditure on pharmaceuticals as a percentage of GDP is now expected to decline every year between 2012-13 and 2016-17. The pharmaceutical and pharmacy sectors are doing their bit to maintain the affordability of the PBS.

The Medicines Partnership of Australia is: The Pharmacy Guild, Medicines Australia, the Generic Medicines Industry Association, the Australian Self-Medication Industry, the Pharmaceutical Society of Australia and the National Pharmaceutical Services Association.

17 May 2013

Media inquiries:Greg Turnbull 0412 910 261

Consumers benefit from affordable medicines

Consumers have been getting very good value for money when purchasing medicines over the past twenty years when compared with the rising prices for other commodities, and household income growth.

Data from the Australian Bureau of Statistics data shows that over the last two decades between June 1991 and June 2012, consumer medicine prices have grown by 57 per cent. This compares with overall prices in the economy growing by 70 per cent over the same period. This means that the prices consumers pay for their medicines have not kept pace with inflation over the last 20 years.

In the same period, median household income grew by 118 per cent, meaning that household incomes have grown at more than double the rate of medicine prices. This compares with other areas of household expenditure which have grown at more than the rate of general inflation and household income, such as the prices for utilities and petrol.

Over the same 20 year period, the prices consumers pay for medical and hospital services have increased by 191per cent, or more than three times the rate that medicine prices have grown, and faster than household incomes have grown over the same period. So while consumers may be feeling the pressure of higher prices for health costs, this has not been due to medicine prices.

These findings are contained in the Medicines Partnership of Australia’s PBS Scorecard for December, issued today. The scorecard can be viewed here

While individual households will vary, according to ABS data average consumersspend only $5.83 per week of their household budget on prescription medicines. This compares with $6.16 a week on milk, $11.34 a week on cigarettes, $12.17 on mobile phones, $30.50 on fast food and takeaway, $31.97 a week on meals in restaurants and clubs, and $36.66 a week on petrol.

The Medicines Partnership of Australia is: The Pharmacy Guild, Medicines Australia, the Generic Medicines Industry Association, the Australian Self-Medication Industry, the Pharmaceutical Society of Australia and the National Pharmaceutical Services Association.

4 December 2012

Media inquiries:Greg Turnbull 0412 910 261

Sharp drop in average cost of PBS medicines

Reforms of the Pharmaceutical Benefits Scheme have produced a large drop in the average cost to government of PBS prescriptions.

The sharp drop is confirmed in the June 2012 PBS data – the first month of data to include the full impact of the major 1 April 2012 price reductions.

The 1 April price reductions – the largest set of PBS price reductions in the history of the scheme – have seen a $5 drop in the average cost of prescriptions – falling from just over $44 to just over $39.

This is the clearest demonstration yet of the significant savings being reaped by the government through the Expanded and Accelerated Price Disclosure program. It is further confirmation that PBS expenditure is being kept well under control.

These findings are contained in the Medicines Partnership of Australia’s PBS Scorecard for August, issued today. The scorecard can be here (please follow link)

The data shows growth in government expenditure on the PBS in the 12 months to 30 June 2012 was 6.4%, before any adjustment for inflation. Despite an unusual spike in the official data at the end of the financial year, the annual figure was similar to growth recorded in the previous financial year, and well below historical rates of growth.

The volume of prescriptions recorded in the June 2012 PBS data was approximately 75% higher than the same month in 2011, and was 30% higher than any other month in history.

This has provoked some comment, and is clearly not a true reflection of actual dispensing activity in community pharmacies in June. Detailed analysis of the data reveals that the Department of Human Services (DHS, formerly Medicare Australia) slowed down their average processing times in the nine months to April 2012. The backlog of pharmacy claims was rapidly cleared by DHS in May and June. This volatility is likely to have resulted in 2011-12 financial year growth being overstated in the official figures.

This is another example of why the Medicines Partnership of Australia argues that we need to have clear agreed, publicly available measures of volume and price growth in the PBS, so that government, industry and all stakeholders can make meaningful comparisons and draw reliable projections of this important public sector expenditure item.

The Medicines Partnership of Australia is: The Pharmacy Guild, Medicines Australia, the Generic Medicines Industry Association, the Australian Self- Medication Industry, the Pharmaceutical Society of Australia and the National Pharmaceutical Services Association.

12 August 2012

Media inquiries:Greg Turnbull 0412 910 261

PBS expenditure now falling in real terms

Recent Pharmaceutical Benefits Scheme (PBS) data shows no growth in real terms,confirming the ongoing viability of the best subsidised medicine scheme in the world.

Growth in Federal Government expenditure on the PBS in the 12 months to 31 March 2012 was just 0.8%. After adjusting for inflation, currently at 1.6%, this represents a decline of 0.8% in real terms. This is well below the Government’s own target of two per cent growth in real terms.

The decline in expenditure is likely to continue, as the largest single set of price reductions in the history of the PBS took effect on 1 April 2012 and the impact of these reductions has not yet shown in the official figures. The PBS reforms are working – the Government is on track to save at least $1.9 billion dollars over the forward estimates and the current lack of (real) growth reinforces the industry’s longheld position that PBS is well under control.

The ten year average growth in PBS in the last decade (2000-2010) was one of the lowest since the 1980s. The Department of Health and Ageing Annual Report 2010-11 reported that in the financial year to 30 June 2011, PBS expenditure grew by5.7%. The current growth rate (2.4%) for calendar year 2011 using Medicare Australia data reaffirms that the long term downward trend is continuing.

Over the last decade, PBS expenditure as a proportion of GDP has remained steady at between 0.6% and 0.65%. This percentage is now on a downward trend, as PBS expenditure is now decreasing (in real terms) while the economy continues to grow.

These findings are contained in the Medicines Partnership of Australia’s PBS Scorecard for May, issued today.

The Medicines Partnership of Australia is: The Pharmacy Guild, Medicines Australia, the Generic Medicines Industry Association, the Australian Self-Medication Industry, the Pharmaceutical Society of Australia and the National Pharmaceutical Services Association.

Media inquiries: Greg Turnbull 0412 910 261

PBS spending growth is well below Government’s own target

On all the evidence, PBS growth is running at a completely acceptable rate, and continues to provide huge health benefits for the nation.

For the PBS to be able to continue to provide Australians with access to subsidised medicines, both new and existing, while growing at less than the rate of inflation is an extraordinary achievement.

As the medicines industry moves through a time of significant change, pricing and policy predictability will be paramount for the sector.

The latest analysis of the PBS expenditure undertaken by the Medicines Partnership of Australia using Medicare Australia data shows that growth in government expenditure on the PBS in 2011 was 2.4 per cent.

Low growth is likely to continue as another major round of PBS reform price reductions on more than 200 medicines is due to take effect on 1 April 2012.

Given the inflation rate in 2011 was 3.1 per cent, it suggests that Government spending on the PBS in 2011 actually fell in real terms.

This growth rate is below the Government’s own growth target of 2 per cent growth in real terms.

The current lack of real growth shows that PBS expenditure is being well contained. The 10-year average growth trend in the PBS in the last decade (2000-2010) was one of the lowest since the 1970s.

The Department of Health and Ageing Annual Report 2010-11 showed that in the year to June 2011, PBS expenditure grew by 5.7 per cent. The current growth rate of 2.4 per cent (year to December 2011) reaffirms that the long-term downward trend is continuing.

Over the last decade, PBS expenditure as a proportion of GDP has remained steady at between 0.6 per cent and 0.65 per cent.

The Australian Government’s 2010 Intergenerational Report predicted that PBS expenditure would be 0.7 per cent of GDP through to 2020. Already, actual expenditure in 2009-10 and 2010-11 have both come in a whole percentage point below those forecasts.

The PBS actually represents the most cost-effective element of health expenditure, and should not be subjected to further savings measures which could threaten the best subsidised medicines scheme in the world.

While the medicines sector is under pressure, it achieved exports of $3.7 billion in 2011 – more than the car industry and wine industry. However, exports fell from $4 billion in 2010, showing that while the industry is holding its own in the face of ongoing economic challenges, a predictable policy environment has never been more important.

The Medicines Partnership of Australia is: The Pharmacy Guild, Medicines Australia,
the Generic Medicines Industry Association, the Australian Self-Medication Industry,
the Pharmaceutical Society of Australia and the National Pharmaceutical Services
Association.

Media inquiries: Greg Turnbull 0412 910 261

Download this media release in PDF format.

No case for further cuts to Pharmaceutical Benefits Scheme

The latest analysis of the Pharmaceutical Benefits Scheme undertaken by the Medicines Partnership of Australia shows that there is no case for additional cuts to PBS expenditure.

The pharmaceutical industry and community pharmacy have already agreed to extensive savings, worth several billion dollars, some of which are yet to kick in. Now is not the time to impose new measures that could threaten the viability of parts of the industry.

Recent PBS data shows that growth remains low and is continuing to trend downwards.

Growth in government expenditure on the PBS in the year ended 30 September 2011 was 5.7%. After adjusting for inflation, this represents growth of approximately 2% in real terms. This is a sustainable level of growth, and existing arrangements such as price disclosure will ensure expenditure remains well under control.

A major round of PBS Reform price reductions is due to take effect on 1 April 2012. The April reductions will average 23% across more than 200 drugs.

On all the evidence, PBS growth is running at a completely acceptable rate, and continues to provide huge health benefits for the nation.

The PBS actually represents the most cost-effective element of health expenditure, and should not be subjected to further savings measures which could threaten the best subsidised medicines scheme in the world.

The Medicines Partnership of Australia is: The Pharmacy Guild, Medicines Australia,
the Generic Medicines Industry Association, the Australian Self-Medication Industry,
the Pharmaceutical Society of Australia and the National Pharmaceutical Services
Association.

Media inquiries: Greg Turnbull 0412 910 261

Download this media release in PDF format.

Latest research shows slowdown in PBS spending growth

The latest analysis of the Pharmaceutical Benefits Scheme undertaken by the Medicines Partnership of Australia shows that PBS expenditure is slowing and remains well under control.

The research should allay any concerns the Federal Government may have about the
sustainability of the PBS.

The analysis shows that PBS expenditure grew by 5.2 per cent in 2010-11, almost half of the average PBS growth for the preceding decade (9.2 per cent).

The 10-year average growth in PBS spending in the last decade (2000-2010) was comfortably the lowest since the 1970s and is trending downwards.

As a proportion of Australian GDP, government expenditure on the PBS has remained steady over the last 10 years, at between 0.6 per cent and 0.7 per cent of GDP. This is below the OECD average of 0.8 per cent of GDP.

According to the Government’s Intergenerational Report, PBS expenditure as a proportion of GDP is likely to remain at 0.7 per cent out to 2020.

The Medicines Partnership of Australia is: The Pharmacy Guild, Medicines Australia,
the Generic Medicines Industry Association, the Self-Medicating Industry Association,
the Pharmaceutical Society of Australia and the National Pharmaceutical Services
Association.

Media inquiries: Greg Turnbull 0412 910 261

Download this media release in PDF format.

PBS Scorecard

The Medicines Partnership of Australia PBS Scorecard shows low and sustainable PBS
growth.

An analysis of the Pharmaceutical Benefits Scheme undertaken by the Medicines Partnership of Australia shows that by all measures the system is working well and spending is well under control.

The new PBS scorecard report should allay any budgetary concerns the Federal Government may have about the PBS.

The scorecard shows that growth in PBS expenditure and prescription volumes has been trending down since mid-2010.

In the 12 months to 31 March 2011, the overall growth in PBS expenditure and prescription volumes was just 2.8 per cent and close to negative 1 per cent respectively. This is the lowest growth the PBS has seen in recent years.

As a proportion of Australian GDP, government expenditure on the PBS has remained steady over the last 10 years, at between 0.6 per cent and 0.7 per cent of GDP.

The 10-year average growth in PBS spending in the last decade (2000-2010) was comfortably the lowest since the 1970s and is trending downwards.

According to the Government’s own estimates, available in the Treasury’s forward estimates in last year’s Budget papers, the average real growth in PBS expenditure is likely to remain low in the foreseeable future, at 2.1 per cent.

The Medicines Partnership of Australia (MPA) is an alliance of peak industry associations
representing key members in the supply chain that delivers medicines and pharmacy
expertise to Australian consumers.

Download this media release in PDF format.