Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

My question is also to Senator Santoro as the Minister representing the Minister for Health and Ageing. Would the minister adviser the Senate how the government is strengthening the Pharmaceutical Benefits Scheme? Can the minister tell the Senate what benefits the reforms will deliver to both patients and taxpayers?

Santo Santoro (Queensland, Liberal Party, Minister for Ageing) Share this | Link to this | Hansard source

I thank Senator Humphries for his questions and again go on the record as saying that I appreciate the very valuable work that he has contributed to coming up with the solution that the government has worked out with the pharmacy industry of this nation. I know he has liaised very carefully with the pharmacists within the ACT and has contributed very significantly to the outcomes that we are able to boast about.

The government is making changes to the Pharmaceutical Benefits Scheme to give Australians continued access to new and expensive medicines while ensuring that the PBS remains economically sustainable into the future. Subsidies for prescription medicines by the PBS have increased from $2.5 billion in 1995-96 to just over $6 billion in 2005-06, which is an increase of 148 per cent. In 2005-06, around 170 million subsidised prescriptions were dispensed—or eight scripts for every person in Australia.

The PBS subsidises more than 600 medicines available in 1,800 forms and marketed as 2,600 differently branded items. Already, since August this year, new drugs worth more than $1 billion over a four-year period have been listed on the PBS. These included drugs like Herceptin for early breast cancers, at the cost of $470 million over the next four years; Lantus and Levemir for the management of diabetes, at a cost of $145 million over four years; and widened eligibility criteria for lipid-lowering drugs like Simvastatin at $158 million.

Beginning in July 2007, the government will introduce a number of changes to protect patients from higher out-of-pocket costs, to get better value from market competition among brands of generic off-patent medicines, and to recognise the importance of world-class, life-enhancing drugs to patients. These changes should make the PBS an even stronger system with the government paying less for certain medicines without increasing the cost to patients. In fact, for some medicines, patients should also pay less. Over the next few years, Australia will move to a system where the government gets better value for many medicines that are coming off patent. There will be a series of price reductions for these medicines and, over time, the price the government pays will move closer to the actual price at which these medicines are being supplied.

Patients will continue to have a choice of medicines and pay only the standard co-payment for a PBS script, which currently is $4.70 per script for a concession card holder and $29.50 a script for others. There should be more medications that cost less than $29.50, which will mean cheaper prices for some patients. A support package will help pharmacies to adjust to the new arrangements. The package includes increased payments for dispensing medicines plus incentives to take up electronic health systems and to dispense medicines with no additional charges for patients. I would like to take the opportunity to recognise the important and positive role the Pharmacy Guild of Australia played in these exchanges and, in particular, to acknowledge the ongoing constructive way its president, Mr Kos Sclavos, continues to deal with the government.

It will be simpler for doctors to prescribe certain medicines. From July next year, around 200 medicines that treat long-term conditions such as diabetes will be authorised by the doctor alone without a phone call to Medicare Australia. These changes will save more than $580 million over the next four years, growing to $3 billion over the next 10 years. As a result, the PBS should be well positioned to meet future demand for new and expensive medicines, and patients will continue to have access to these medicines at a price they can afford. The fundamentals of the PBS will not change. Patients will continue to meet only standard co-payments. In some cases they will in fact pay less. The main changes will be in the way that the government prices medicines that are operating in a competitive market. (Time expired)