John Alexander (Bennelong, Liberal Party) Share this | Hansard source

I am grateful for the opportunity to speak on the National Health Amendment (Pharmaceuticals Benefits) Bill 2015, which establishes a sustainable direction for all players in the medicine supply chain and, most importantly, delivers some major wins for Australian consumers.

As the member for Bennelong and chair of the Parliamentary Friends of Medicine, I have taken a keen interest in the progress of difficult and complicated negotiations between the government and the pharmacy, innovative medicines and generic medicines sectors.

Of course, there is no magic pudding of taxpayer funding and therefore the result of this negotiation has not left every stakeholder happy. But this government has delivered something that those opposite were never able to: a stable and sustainable environment for each of these stakeholders to operate in. This bill offers pricing stability for the medicines sector and security to the Pharmacy Guild through the extension of the location rules.

Many of my colleagues have spoken with great eloquence of the beneficial impacts of these changes on the pharmacy sector. I have held many meetings with hardworking local pharmacists and with Pharmacy Guild representatives throughout these negotiations, so rather than go over ground already covered, I wish to speak about other stakeholders.

Bennelong is fortunate to host the head offices for a majority of pharmaceutical companies in Australia, which manufacture both innovative and generic medicines. Over the past nearly five years as the local member, I have been delighted to learn of the remarkable contribution made by these companies to both the physical health of Australians and the economic health of our nation. This is an industry that is responsible for over $3 billion in export earnings each year. That is more than the wine industry, which occupies a significantly greater role in our national consciousness and pleasure. This industry also brings in approximately $650 million for clinical trials—a vital employer of highly qualified and highly paid Australian jobs.

More importantly, the innovative medicines sector has delivered extraordinary outcomes over recent years for Australians suffering with some of the ugliest, most debilitating illnesses, from heart disease to wet macular degeneration to diabetes. Tens of thousands of our constituents enjoy a significantly greater quality of life, and a more productive life, as a result of the contributions of this industry. Recently the health minister announced the PBS listing of the next generation of medicines, with $1.3 billion in the recent budget for new life-saving drugs to help treat breast cancer, melanoma, blindness and the debilitating shingles virus. Some of these medicines could cost patients in the order of $100,000 without government subsidy. This takes to 652 the number of new and amended drug listings on the PBS, totalling $2.9 billion in the 18 months since this government's election in September 2013. This is nearly double the 331 listings during the full three-year term of the previous Labor government. These listings include drugs like Lucentis, manufactured by Novartis, which will save some of my constituents from blindness. It would cost $10,000 per patient if not listed on the PBS.

The costs to bring these drugs to market are significant because of the very long time period and complicated process required to get from the patenting of a molecule to a safe, proven product on the pharmacy shelf. On average this process can take up to 12 years and cost up to $1 billion, giving the company only eight years to make back their costs of investment before the patent expires and the generic manufacturers move in. As a result, time and again I have heard from these companies that the commodity they crave more than anything is a stable operating environment. When in government the Labor Party clearly did not deliver in this regard, with cabinet deferrals of listings despite PBAC approval and the existence of a memorandum of understanding that clearly set out an agreement to do otherwise. By comparison, this government has honoured its election commitment to lift the minimum amount required for cabinet approval and has signed a letter of intent with the industry that provides five years of pricing stability. This stability goes hand in hand with savings, delivering great benefits for both the consumers purchasing the medicines and the Australian taxpayer. This includes changes to the pricing of generic medicines, leading to as much as a 50 per cent drop in prices by October next year and giving pharmacists the ability to provide patients with a $1 per script discount, therefore delivering a direct benefit to consumers.

I wish to thank Minister Sussan Ley for her tireless work in managing the complicated negotiations that have led to the bill we have before us today. On many occasions over recent months I have sought her assistance and her counsel, and she has always been willing and generous. I also wish to thank the many industry participants I have engaged with throughout this process—both pharmacists and medicine manufacturers. Whilst some may have felt a little battered and bruised as the negotiations wore on, all stakeholders maintained a sense of the greater good for the Australian taxpayer and a respect for the tough job inherited by this government to fix the budget. They recognise a partnership of common purpose with the government to, above all else, achieve the best possible health outcomes. Whilst some differences are still being ironed out, it is to the minister's credit that broad agreement with all participants, and even with those opposite, has been achieved.    I commend the bill to the House.

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