Show me the money

Pre-Budget media revelations may not be all that they seem

What is being described as “one of the most comprehensive pre-Budget leaks ever” has revealed the federal government plans a series of medicine pricing reforms that it says will save taxpayer money.

However, while mainstream media reports show what look to be a series of fairly radical reforms, many of the changes are not quite as new as presented.

Writing in the Herald Sun , health reporter Sue Dunlevy lists a series of initiatives that are rumoured to be included in the 9 May Budget, including:

  • “Slashing” the price of two of the most expensive medicines on the PBS by 25%, plus cuts for hundreds of other medicines
  • Taxpayer-funded compensation for pharmacists to compensate for low script volumes (
  • $600 million allocated for in-pharmacy diabetes checks
  • Abandoning 2014 Budget plans to raise the price of prescription drugs by $5
  • Increasing the rate of switching to generic medicines
  • Unfreezing Medicare rebates for bulk-billed GP visits      

 However many of these measures have already been flagged or budgeted for, with the in-pharmacy diabetes scheme an already budgeted professional service program, with an additional $50 million allocated to the recently launched diabetes Pharmacy Trial Program.

Even the heralded PBS cuts, to be incorporated in the historic 5-year agreement with the pharmaceutical industry, are basically pushing forward already-Budgeted price disclosure cuts, moving the heaviest cuts to the first year of a four-year price disclosure cycle.

Industry sources are confident of some compromise deal being reached on the government’s controversial decision to hold out on 6CPA risk sharing arrangements for low prescription volumes. 

The Pharmacy Guild of Australia had called for an $82 million reimbursement to pharmacies due to a $6.5 million shortfall in prescription volumes over 2015-16.

One new measure is the plan to increase the rate of generic substitution from its current 60% rate to 80%. As yet no details have been released around this possible proposal.   

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