A mixed bag

The Medicines Partnership of Australia has welcomed the Government’s additional PBS investment in the Budget, although it initially expressed concerns about expenditure

The Medicines Partnership of Australia (MPA), which includes 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 and Biosimilar Medicines Association, has released its budget response.

MPA says it “warmly welcomes” the government’s commitment to investing $2.4 billion in new medicine listings from 2017-18 to 2021-22, including $1.4 billion for new and amended listings on the PBS.

In addition, the Budget includes $1 billion in provisions for future PBS listings in line with the government’s commitment to list all new medicines recommended by the PBAC.

However in an initial statement, MPA had expressed concerns that PBS expenditure is “fiscally constrained and continuing to decline in real terms”.

It estimated that PBS expenditure would decrease by 7.3% in real terms over the period 2018-19 to 2021-22, after removing the impact of the decision to change the payment arrangements for high-cost medicines and allowing for an additional $1 billion in committed spending for further new PBS listings.

In a subsequent statement, MPA said that that the Government’s overall PBS net investment (i.e. net PBS expenses) – including the $1 billion that the Government has provisioned for new medicine listings – will in fact increase from $8.7 billion in 2017-18 to $9.3 billion in 2021-22.

In this second statement, the partnership also highlighted that under improved administration arrangements whereby the Government will pay the negotiated price for medicines with special pricing arrangements, PBS revenue received by the Government will be reduced along with a corresponding reduction in PBS expenses – leading to no change to the Government’s overall investment in the PBS.

“MPA welcomes the government’s strong leadership in enhancing the transparency of its investment in the PBS,” it stated, signalling that it seemed to have come to an understanding with the Government over Budget numbers.

“MPA is committed to working with the Government to ensure that all Australians derive maximum benefit from the PBS,” it concluded.

Expenses/revenue graph. Source: Medicines Partnership of Australia
Source: Medicines Partnership of Australia
expenses chart. Source: Medicines Partnership of Australia
Source: Medicines Partnership of Australia

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