PBS sustainability proven, more cuts unnecessary: Medicines Partnership

PBS cuts: scissors cutting $20 note

The sustainability of the PBS has been highlighted by the release of Productivity Commission data which puts the cost of the PBS per person at a 10 year low, says the Medicines Partnership of Australia.

The Productivity Commission Report on Government Services is the latest confirmation of the clear trend of declining growth and spending on the PBS in recent years, it says.

According to the Commission: “Real expenditure on the PBS, which rose relatively steadily from $6.9 billion ($337 per person) in 2005-06 to a high of $7.9 billion ($350 per person) in 2011-12, decreased to $7.1 billion ($299 per person) in 2014-15.”

It shows that PBS spending per person fell almost 6% in 2014-15 alone. In contrast, the report shows that virtually every other area of health spending has grown.

This latest evidence follows last month’s analysis of the Mid Year Economic and Fiscal Outlook by the Parliamentary Budget Office showing a $3.6 billion cut in forecast spending on the PBS over the four years to 2018-19.

This reflected the impact of the PBS Access and Sustainability Package and the Sixth Community Pharmacy Agreement. According to the PBO, the Pharmacy Agreement will cut spending by $2bn over four years, while larger-than-expected savings from pharmaceutical pricing policies will yield a further $1.6bn.

It is demonstrably clear that PBS policies and reform have been managed in a way that has delivered effective pricing and value for taxpayers, such that it is the one of the only areas of health spending that has remained static or declined per capita, says the Partnership.

This has not been without significant strain on everyone in the pharmaceutical sector. The fact is that these savings and the contribution they are making to the bottom line should provide confidence to policy makers as the Government approaches this year’s Budget.

The Medicines Partnership urges the Government to acknowledge that further cuts to the PBS are unnecessary, and in accordance with the National Medicines Policy it is important now to provide stability to ensure Australia’s world-class subsidised medicine system is maintained.

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


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