$1 off across the board

$1 being picked up

Pharmacy Guild calls on Federal Government to remove optional $1 discount and reduce PBS/RPBS co-payments by $1 for all patients in its pre-budget submission

In its pre-budget submission published this month, the Pharmacy Guild of Australia has recommended that the Federal Government remove the optional $1 discount in its 2019-20 Federal Budget, which is scheduled to be delivered on 2 April 2019.

The discount policy has reportedly been under review for a number of months by the Department of Health.

In its submission the Pharmacy Guild argues that the $1 discount, which was introduced by the government in January 2016, has “proven to be an ineffective way to provide more affordable access to PBS medicines, and has instead increased inequity and undermined the universality of the PBS while commoditising medicine usage”.

It says that the $1 discount results in patients taking longer to reach their safety net threshold, which in turn leads to budget savings.

At the time of announcing the policy, the government estimated the policy would result in Federal budget savings of $373.4 million over 4.5 years.

However PBS data published by the Department of Health in January this year for the 2017-18 financial year shows that only 28% of eligible prescriptions were discounted.

For RPBS patients this dropped down to 17%.

“Clearly, the $1 discount policy has not resulted in an aggregate take-up that has meaningfully contributed to lower medicine prices for a broader population,” says the Guild.

The policy has also created “unfair geographical divergences” in medicines prices, the Guild adds, as patients in big capital cities have been more likely to receive discounts than concessional patients in regional areas.

“Effectively, all the $1 discount policy has done is entrench competition where it was already strong – in localised highly urban areas where competition is already strong in relation to non-subsidised medicines below the patient co-payment, as well as for non-prescription medicines and other pharmacy products.

“Why should this be the case? How is this good policy?” debates the organisation in its submission.

“Medicines are not normal products of commerce,” it emphasises.

“The optional $1 co-payment discount has commoditised and devalued the importance of safe dispensing of PBS medicines.”

It highlighted that the Review of Pharmacy Remuneration and Regulation Final Report also recommended the Government to abolish the $1 discount on the PBS patient co-payment.

Meanwhile the Guild called for the discount policy to be replaced by a $1 reduction of PBS and RPGBS co-payments for all patients.

“A $1 co-payment reduction would result in an immediate and universal 15% reduction in the cost of concessional prescriptions for approximately 1 million concessional patients – the same patients who have received little or no direct benefit from over 10 years of PBS pricing policies that have produced very large budget savings for government,” says the Guild, referring to price disclosure.

The Guild estimates the net budgetary cost of the removal of the optional $1 co-payment discount and introduction of a $1 reduction to PBS co-payments from 1 January 2020 to be around $500 million over four years.

“The funding of more affordable medicines would be a prudent investment by the Federal Government in better health outcomes. Moreover it is affordable given the ongoing budget savings from the medicine supply chain in Australia,” it says.

See the full submission here

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1 Comment

  1. Nicholas Logan

    This would be an excellent first step in turning the profession from it’s current path to a vending machine model.

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