‘Flat projections for the PBS raise significant questions’, says Medicines Australia

Pharma News: The federal budget commitment to ensure Medicare is ‘fit for the 21st Century’ has been welcomed by Medicines Australia. However, the budget confirms that the PBS continues to stagnate compared to substantial projected growth in Medicare, hospital funding to the States and the NDIS.

Medicines Australia acknowledge the $6.1 billion reforms to Medicare. Notably the focus on primary healthcare is important to improve health delivery and reduce the growing pressure on public hospitals.

“As the Minister for Health said, while Australians have changed significantly in the past 40 years, Medicare has not evolved since its introduction in 1984. Reinvigorating our health delivery framework is an important priority, but similarly, we must work now to ensure the Pharmaceutical Benefits Scheme (PBS) – now 75 years old – receives due care and attention to ensure it doesn’t fall even further behind,” said Ms de Somer.

The PBS funding will be flat at $19.1 billion in 2023-24 compared to $19.6 billion in 2022-23.

Ms de Somer stated “These flat projections raise significant questions on how our PBS can keep up with the innovative leaps and scientific breakthroughs now arriving – for those facing life threatening acute illness, or managing ongoing chronic health conditions. A strong Medicare needs a strong PBS. Parallel investment that advances healthcare delivery, alongside the harnessing of innovative medicines, is essential. Working together this will build a modern system truly ‘fit for the 21st Century’ – bringing maximum gain for our community and the economy.”

Trent Zimmerman, former federal member for North Sydney and chair of the House of Representatives health committee between 2016 and 2022, said in an opinion piece “The current PBS…was not designed to assess subsidies for treatments that might be personalised for each individual, which is the hope precision medicine can offer. These are treatments that can cost in the many tens of thousands and will be beyond the reach of most Australians without government subsidies.

“New medicines and technologies rarely come cheap but upfront costs often bring long-term savings, particularly for chronic conditions that could otherwise involve years of health expenditure. More fundamentally, they save lives or shape the quality of life for so many Australians – and that’s surely worth the investment.”

Ms de Somer emphasised that Medicare and the PBS must evolve together, and the government’s first major Health Technology Assessment (HTA) review in 30 years provides a critical opportunity to achieve long overdue PBS reform. “Making our HTA ‘fit for the future’, to sit alongside Medicare, must now be our collaborative goal,” she said.

“Improving the health technology assessment process is vital in a global environment where Australia is a small market. Cost, payment and process barriers need to be calibrated to ensure there are strong incentives for pharmaceutical and medical technology companies to enter our market so Australians have access to the newest of treatments,” noted Mr Zimmerman.

In other areas of the health budget, Medicines Australia welcomed new funding for the Therapeutic Goods Administration (TGA) to deliver measures in public health worth $61 million over four years. This represents an important start and we encourage further support for the TGA as the Government implement ongoing health reform over the coming years.

However, nestled within one of the budget papers, Labor quietly announced it will not proceed with the patent box measures. The previous government’s March 2022 budget said the patent box system would provide generous tax concessions to biotech startups which patented and commercialised their technology within Australia.

Medicines Australia is disappointed with this decision, but looks forward to working with the government on future measures that will encourage industry growth and investment in Research & Development.

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