Medicines industry helping return Budget to surplus

The Australian medicines industry is making a major contribution to returning the Federal Budget to surplus, Medicines Australia chief executive Dr Brendan Shaw reminded Treasurer and Deputy Prime Minister Wayne Swan today.

In Medicines Australia’s pre-Budget submission to the Treasurer, Dr Shaw underscored the importance of Medicines Australia’s Memorandum of Understanding with the Commonwealth which was delivering $1.9 billion in savings to the Pharmaceutical Benefits Scheme.

Estimates commissioned by the Government show that the original 2007 reforms to the PBS will generate up to $5.8 billion in savings by 2018, Dr Shaw told the Treasurer.

The PBS grew by just 2.4 per cent in nominal terms in 2011, less than the inflation rate of 3.1 per cent, suggesting that Government spending on the PBS fell in real terms in 2011.

“Medicines Australia has worked constructively with Federal Governments over the years to ensure that the Pharmaceutical Benefits Scheme remains sustainable,” the letter says.

“The MoU between the Government and Medicines Australia has now started to deliver significant savings to the Government.”

Medicines Australia has highlighted the importance of business predictability for the medicines industry.

“It is critical for our industry that the predictable pricing-policy environment agreed in the MoU is respected,” the letter says.

“Any further policy and savings measures at this time would compound an already challenging environment and would be difficult for the industry to absorb.

“It is for these reasons that the Government’s explicit commitment in the MoU not to implement new policy to generate price-related savings in the PBS over the life of the agreement needs to continue.”

Medicines Australia told the Government that developing a strategy for developing the industry in Australia was another important task.

“While the industry is going through very challenging times here and internationally, there are significant opportunities for Australia to develop its capability in researching, discovering, developing, manufacturing and exporting high-tech medicines if we can get the settings right in health policy and industry policy.

“The industry has the potential to help Australia set itself for a post-mining boom future.”

-ENDS-

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au