The government’s agreement with the Guild has allowed reinvestment in the medicines sector, says Health Minister Greg Hunt
Guaranteeing the MBS and the PBS is the first “pillar” of the Federal Government’s long-term national health plan, Minister Hunt has said in a special editorial for the Medical Journal of Australia.
The other three pillars are: supporting hospitals; prioritising mental and preventive health; and investment in medical research.
In sharing his vision for the future of healthcare, Minister Hunt says collaborative arrangements he negotiated with key groups – including the AMA, RACGP, Pharmacy Guild, Medicines Australia, and Generic and Biosimilar Medicines Australia – has allowed the government to implement many positive measures in the Budget.
Support of a strong PBS “ensures that people will continue to have affordable access to the necessary medicines”, he adds.
“For the first time, thanks for our agreement with Medicines Australia, we have been able to reinvest in the sector and create a space for new listings into the future,” says Minister Hunt.
“Similarly, our agreement with the Pharmacy Guild, which is predicated on the ability to make savings through pharmacists’ dispensing processes, has also allowed us to reinvest in that sector.”
Not everyone recognises or agrees with this assertion.
In the latest issue of Forefront, the Pharmacy Guild says it is “surprising how many economic commentators routinely refer to the PBS as an area of uncontrolled and unsustainable spending in the health budget”.
“This knee jerk assertion, of course, is demonstrably untrue,” the Guild responds.
“The facts are there to see in the Federal Budget Papers, as well as in Australian Bureau of Statistics data (for population) and the work of the Parliamentary Budget Office.”
For example in 2016-17, the Federal Government incurred $74.5 billion in expenses on health, of which PBS spending was $13.4 billion (or 18% of the total).
Minister Hunt says that the May 2017 Budget funded his first wave of reform, which for the medicines and pharmacy sector included $1.2 billion for new and amended PBS listings, price reductions for medicines, $225 million compensation for lower-than-forecast script volumes, and $600 million CPA contingency reserve.
This investment level is not set to last.
According to the Budget Papers, over the four years to 2020-21, the Federal Government says spending on the PBS is projected to decline by an average of 2.9% a year, falling to $11.9 billion in 2020-21.
The next sector reforms will be about strengthening private health insurance, the health workforce, mental healthcare (particularly in rural Australia), sport and aged care, says Minister Hunt.
In 2019 he predicts reforms will focus on primary care and hospitals.
Guild Executive Director David Quilty says that if pharmacy owners were not willing to incur business risk to the tune of $15 billion in total, the Commonwealth would be required to make an equivalent capital investment of taxpayers’ money in a national PBS delivery network.
“Thanks to the risk taking of community pharmacies, the Commonwealth only has to meet the incremental cost of ensuring that all Australians have equitable access to PBS medicines, dispensed by highly trained health care professionals who provide quality use of medicines advice to patients.”