Grattan Institute misses the point, again

The Grattan Institute’s latest report seems to, again, miss the point. Enduring reforms to the Pharmaceutical Benefits Scheme (PBS) polices are achieving substantial savings for government and the Australian medicines industry is on the cusp of yet another; the biggest reform since 2007.

“Measures currently before the Parliament will generate as much as $6.6 billion in savings from a raft of changes to the PBS over the next 5 years that will significantly reduce medicines prices to government. As well as measures to speed up price disclosure price cuts for off-patent medicines, the government is also introducing additional price cuts for patented, innovative treatments when they have been on the PBS for five years ,“ Medicines Australia CEO, Tim James said.

The therapeutic group policy has become redundant in the current policy setting. Australia has very effective policy settings to ensure a sustainable PBS. The 1 October 2015 price disclosure reductions announced recently have average price cuts of just over 20% for around 70 drugs, in almost 230 dosages and presentations. This is on top of price cuts to over 100 PBS-listed medicines which took place on 1 April 2015.

“The enduring price disclosure policy continues to deliver hundreds of millions of dollars in savings to Government, patients and taxpayers with reduction days every six months for many of the most commonly prescribed medicines,” Mr James said.

“The Grattan Institute also continues to cherry pick policies from different countries and to prosecute the argument for a New Zealand style medicines procurement system that focuses solely on cost at the expense of choice and optimal health outcomes.

“This report, like many others the Grattan Institute have produced, continues to ignore the fact that since 2000, only around 20 per cent of medicines made available in Australia through the PBS have been added to the New Zealand schedule. It is fundamental to recognise that New Zealanders have much poorer access to medicines and worse health outcomes than Australian patients.

“In addition to this, the recent COMPARE report found NZ ranked 20th of 20 countries included in the study, in terms of access to new medicines, and had access to only a third of the new medicines registered since 2009 available in Australia.

“The lack of choice in medicines in New Zealand means doctors cannot tailor treatments that would work best for the patient. So it is unrealistic to assume Australia could adopt New Zealand’s strict tendering and pricing policies, but avoid its negative consequences of reducing patient and prescriber choice.

“Worryingly, the Grattan report states that there will be a positive impact on investment in research and development of new innovative medicines in Australia despite their proposed reforms and savings. Medicines Australia is concerned that in an already contracting sector, further price changes will seriously jeopardise a large number of highly-skilled jobs and investment.”

The one positive noted by the Institute was that the pharmaceutical industry had worked constructively with Governments over recent years to reduce drug prices when appropriate to do so, something Medicines Australia will continue to do as a credible policy partner.



James Boyce
Phone: 0423 239 265

Alexia Vlahos
Phone: (02) 6122 8503