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