Medicines Australia’s budget submission sets out key priority for delivering innovative medicines

Medicines Australia is pleased to put forward its 2020-2021 Pre-Budget Submission to Treasury, making a single recommendation that the offset policy is no longer necessary to list new medicines on the PBS.

Medicines Australia and its members seek to continue their collaborative partnership with the Australian Government to ensure that Australia’s first-class healthcare system can continue to deliver lifesaving and life changing medicines to Australian patients.

Medicines Australia CEO Ms Elizabeth de Somer said the Medicines Australia Budget Submission is in the best interests of all Australians and will deliver innovative and breakthrough medicines to patients.

“Our recommendation is that the enduring savings measures and ongoing structural reforms in the PBS have provided headroom to list new medicines and that the requirement to find additional offsets is no longer necessary.

“Removing the additional offset requirement for new listings on the Pharmaceutical Benefits Scheme (PBS) will strengthen the Government’s ability to maintain the significant health and economic benefits that the PBS delivers to Australians and to list every medicine recommended by the PBAC,” said Ms de Somer.

“At a time when the Federal Budget is under significant pressure, due in part to the ongoing drought and bushfire crisis, we need to take a critical look at ensuring the uninterrupted supply of new medicines and the benefits they deliver. The recent bushfires have highlighted just how important medicines supply is to Australians.

“A host of sophisticated medical and medicine innovations have, and will, become available, changing how diseases will be treated. We all want to ensure they are brought to Australia, so that the Australian community can benefit from these incredible advances.” said Ms de Somer.

The listing of new and innovative medicines provide broader economic benefit and offset costs across the wider government budget. The impact of lost wages, increased hospital expenditure and early retirement due to ill health are reduced due to medical advancements.

“With the rigorous independent assessment of medicines’ value-for-money, coupled with enduring savings mechanisms and bilateral agreements on medicines utilisation, not only is there ability to list new medicines promptly, it is also close to impossible to overspend.

Medicines Australia’s pre-budget submission shows the PBS expenditure (less rebate) as a proportion of the overall health expenditure has fallen over the decade from 18.77% in 2009-10 to 13.79% in 2018-19.

Using the projections of overall health expenditure presented in the 2019-20 Budget, PBS expenditure as a proportion of overall health expenditure is forecast to fall at an annual rate of 2.59%, dropping to a projected 12.41% in 2021-22.

“The partnership between industry and Government has delivered a PBS with savings measures that has met the needs of Australian patients but is now under pressure due to a growing and ageing population. These pressures can be mitigated, and the PBS can be maintained without further direct offsets or new savings measures.

“We will be discussing our proposal with the government in the coming months and look forward to continuing our work with them on delivering the world’s best healthcare system including innovative medicines, biotherapeutics and vaccines,” said Ms de Somer.