In the last few months, major reports from three separate parts of government have confirmed that PBS expenditure is now decreasing and that price disclosure is delivering savings far in excess of what was expected.
No further PBS savings measures are required or justified. What is needed now is for part of the ongoing savings provided through price disclosure to be reinvested in the PBS. This will ensure patients continue to have access to new and innovative treatments and that the PBS can continue to be implemented efficiently and safely through aviable supply chain and community pharmacy network.
Exhibit 1 – Department of Health (November 2013)
The 2012-13 Department of Health & Ageing Annual Report confirmed that Commonwealth pharmaceutical expenditure fell by an unprecedented $820 million (8.5%) in just one year …
Exhibit 2 – The Treasury (December 2013)
The 2013-14 Mid-Year Economic & Fiscal Outlook yet again listed the PBS as the largest single downward revision across the entire Commonwealth Budget …
This MYEFO outcome was just the latest in a series of reductions to PBS forward estimates. These reductions have amounted to $8.9 billion since the 2011-12 Budget, with expenditure as a percentage of GDP now expected to fall in each of the next three financial years.
Exhibit 3 – The Productivity Commission (January 2014)
In January the Productivity Commission’s Report on Government Services 2014 found that PBS pharmaceuticals had the slowest growth in prices across all areas of health expenditure – an average annual inflation of just 0.2% over nine years to 2011-12.