Medicines Australia’s critical analysis of successive Intergenerational Reports (IGR) demonstrates that previous successive IGRs seriously overestimated PBS expenditure as a proportion of GDP, and highlights the pitfalls of ignoring significant reforms undertaken in the prescription medicines sector over the last decade, the organisation says.
“Analysis released today confirms that the PBS is sustainable and is well placed to meet the needs of an ageing population,” Medicines Australia CEO Tim James, says.
“Medicines listed on the PBS continue to be a valuable and a cost-effective investment in Australia’s health, wealth and prosperity.
“Medicines provide a huge advantage to not only the health and quality of life of the individual patient but to our society and economy more broadly, and we will be expecting this to be recognised in the upcoming IGR.
“It’s essential that the 2015 IGR not only acknowledges the savings accrued to date but also the enduring savings mechanisms embedded into the system to ensure the future sustainability of the PBS. It is also important that the report considers the broader benefits attributable to the use of innovative medicines.
“Better health outcomes and increased productivity for Australians, as well as the benefits that flow to Government from reduced pressure on health services and improved labour force participation, are an investment in the future.
“Timely use of effective medicines directly limits government expenditure and patient out of pocket expenses.
“Medicines Australia’s review of previous IGR projections for the PBS, together with the most recently available independent data and projections will help to demonstrate to the Government and the public the long-term sustainability of the PBS.
“The summary of findings shows projected PBS expenditure (as proportion of GDP) was significantly overestimated in the 2002 and 2007 Intergenerational Reports.”
Previous IGR Reports did not foresee or fully estimate the long-term and ongoing effects of price disclosure reforms, which have ensured that the PBS will remain sustainable well into the foreseeable future, Medicines Australia says.
While previous IGR Reports presented the PBS as one of the fastest growing components of Government expenditure, this is no longer the case. PBS expenditure has remained static in real terms over the past 5 years.
“The summary shows price disclosure reforms over the past decade will deliver savings approaching $20 billion by 2017, putting the PBS firmly on a sustainable path – a fact acknowledged in the National Commission of Audit (NCOA) report, and this must be reflected in the 2015 IGR,” Mr James says.
“As the Australian population ages it is imperative that universal access to innovative medicines remains available to keep people productive, healthy and independent.
“The PBS must be recognised, by both the community and Government, as a valuable and cost-effective investment in Australia’s future.”