Checklist can guide Government on PBS policy

Medicines Australia chief executive Ian Chalmers today proposed a four-step checklist for the Government to use for any future policy decisions for the Pharmaceutical Benefits Scheme.

Speaking at the Future of the PBS conference in Sydney today, Mr Chalmers told health industry experts that the Government should ask itself four key questions in framing future policy decisions for the PBS.

“Whenever the Government is examining growth in public spending on the PBS, it should consider four key questions which help to put any such growth in context,” Mr Chalmers said.

The key questions are:

  • Is PBS growth over the last three years greater than growth over the last 50 years?
  • Is Australia’s growth rate in public spending on pharmaceuticals greater than the OECD average?
  • Is public expenditure on pharmaceuticals in Australia relative to GDP greater than the OECD average?
  • Is expenditure on the PBS replacing or reducing expenditure in other areas of health budget?

Mr Chalmers said the answers to those questions indicate that PBS growth is being contained.

“PBS growth of 1.8 per cent in real terms over the past three years compares very favourably with the 6.5 per cent growth over the last 50 years,” Mr Chalmers said.

“Between 1995 and 2005 growth in public spending on pharmaceuticals in Australia was higher at 10 per cent than the OECD average of 8 per cent. However, these figures do not include the low PBS growth rates of the last few years.

“Australia’s public expenditure on pharmaceuticals as a proportion of GDP in 2007 was 0.7 per cent compared with the OECD average of 0.9 per cent.

“There is increasing evidence, as the Productivity Commission has acknowledged, that spending on medicines offsets expenditure elsewhere in the health sector.

“These questions are as pertinent to Government today as they will be to future consideration of PBS growth. The answers support the findings of an independent study commissioned by the Pharmacy Guild which demonstrates that growth is being contained and we have a sustainable PBS.”


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