Prescription drug scheme under control

[Denis-NFA]

A FAMILIAR pattern is emerging in commentary on the federal government's tight fiscal position and the need for budget savings.

When the need for belt-tightening is raised, think tanks and sundry economic observers have a Pavlovian tendency to point their parsimonious fingers at the Pharmaceutical Benefits Scheme.

Recently I have seen three examples of pushes to reduce PBS spending, from the Productivity Commission, the Grattan Institute and in a report in The Australian in relation to the National Commission of Audit.

The common theme is that PBS spending is not good value, and must be curtailed or reduced. The prevailing view seems to be that PBS expenditure is rising rapidly, is out of control and must be constrained.

The Grattan Institute, for instance, last week repeated its call for billions in savings which it says could be carved out of PBS spending - but neglects to mention the measures it proposes could deprive doctors and patients of choice, and send many pharmacies and jobs to the wall.

The fact is, far from being out of control and ripe for relentless trimming, the PBS is well contained and sustainable. Forget what you may have read in those early intergenerational reports. The notion that our ageing population and an unbridled pharmaceutical sector is going to break the bank is just plain out of date.

The belief the PBS is constantly blowing out does not stand up to scrutiny of recent PBS spending and trends under the price disclosure regime introduced by the Howard government. The Gillard government's May budget told the story for anyone who cared to read it.

Amid the gloom of collapsing revenues, the PBS provided black ink in a sea of red. The forward estimates of aggregate commonwealth spending on the PBS actually went backwards, and sharply.

The budget confirmed the significant impact that PBS price reforms are having on PBS expenditure, delivering the government an additional $2.5 billion saving over four years. The commonwealth's savings from price disclosure were scheduled to increase from $296 million in 2013-14 to $1.1 bn a year in 2016-17.

But wait, there's more. That was before the then Labor government's economic statement of August, which squeezed $835m in savings by accelerating the price disclosure process.

The real rate of growth in PBS expenditure is 2 per cent a year according to the budget papers, despite Australia's ageing population, and an estimated 6 per cent annual growth in PBS volumes. This rate of growth is significantly lower than the overall health system and other major health expenditure drivers such as the Medical Benefits Schedule and public hospitals.

A few months after the budget, the Health Department's annual report revealed that PBS spending actually declined by more than $350m in 2012-13.

It is now the case that spending on pharmaceuticals as a percentage of GDP is expected to decline every year between 2012-13 and 2016-17. This is proof that the pharmaceutical and pharmacy sectors are doing their bit to maintain the affordability of the PBS.

The National Commission of Audit provides opportunities and risks for the viability of Australia's pharmaceutical industry, for 5300 community pharmacies, and for the 60,000 people who work in them. The sector will be urging the commission to take a pragmatic and non-ideological look at the PBS, based on real figures, not out-of-date myths.

David Quilty is executive director of the Pharmacy Guild.

- See more at: www.theaustralian.com.au/news/figures-show-reality-of-drug-prices/story-e6frg6n6-1226774534030#sthash.e26ZKtCI.dpuf

[aussieinusa]

Thanks for posting this, Denis-NFA; scary that the PBS is the latest targeted for 'reigning in spending' when so many of us are dependent on it for essential medication.

I'm not opposed to reviews, because there are some areas where the PBS has been used to prop up people for whom medication actually isn't the best treatment available, but lack of access to other services makes it people's only options. For example, psychological treatment is still poorly funded in this country (despite some major steps forward in the last few years) so there are many people with clinical depression, for example, who would be good candidates for Cognitive Behaviour Therapy but can't get it. They wind up on antidepressants long-term as a default option, but the clinical evidence doesn't support meds alone (or in some cases, at all) as the most effective treatment for depression. Same goes for physiotherapy: there are many people who would benefit greatly from being taught to self-manage things like spinal problems by a physiotherapist, but physiotherapy isn't properly funded so they wind up on painkillers long-term. Again, the clinical evidence says that for many patients this isn't the best long-term approach. In rural and regional areas, that applies to a whole long list of conditions, where specialist treatment for a long list of common conditions isn't available, so patients are limited to meds as the only available treatment, whether that's clinically indicated or not.

But you'll note that all those areas are things where funding might be better put elsewhere, rather than withdrawn entirely. There are still people who need help, which the government ought to fund (if for no other reason than getting people back to work and paying taxes again, wherever possible); not areas where they should stop spending money altogether. The only area I can think of where "just don't prescribe anything" is the answer, is in combatting over-prescription of antibiotics -- but again, that's a known problem where there are ongoing efforts to remind doctors that sometimes 'go home and rest' is the best course of treatment (e.g. for colds and flu), even if patients really want to be sent home with a box of pills to 'fix' them.

A simple 'tighten the belt at any cost' approach towards the PBS would be disastrous. Let's hope the bunch of bully boys my fellow Aussies voted into office don't go there; it's hard enough managing with only a couple of my medications not covered by PBS...