PBS investment stagnant despite ‘appetite’ for reforms

Pharma News: 15.3% of the Federal Budget has been earmarked for the health portfolio in the fiscal year 2024-25, slightly reduced from the 15.6% allocation last year.

The static nature of the Pharmaceutical Benefits Scheme (PBS) investment – from $19 billion in 2023-24 to $19.5 billion in 2024-25 – is attributed to price reductions and the policy decision to reflect new drug listings only after the decision is made.

The Federal Budget’s investment in the health portfolio must consider not only the growth in the consumer price index (CPI) but also population growth and aging. To maintain real-term investment levels, a spending increase of at least 13.4% is necessary.

Analysis of the new Budget reveals that only two components of the health portfolio – the Medicare Benefits Schedule (MBS) and public hospital funding – are experiencing growth rates surpassing the threshold required to keep pace with inflation and demographic changes.

Liz de Somer, CEO of Medicines Australia, emphasised “As Australia faces the pressure of an ageing population, reduced productivity and growing Medicare costs, we must change our thinking about medicines and view the PBS as an investment in wellbeing, rather than a cost.

“Access to medicines has a direct link to the economy and to productivity, as evidenced in the recent Productivity Commission report that found advances in cancer treatments have been one of the major drivers of productivity growth.”

Outlined healthcare measures in the 2024-25 Budget encompass a $3.4 billion allocation over five years for new and revised PBS listings. Additionally, there will be a one-year freeze on the maximum PBS patient co-payment for all Medicare cardholders and a five-year freeze for pensioners and other concession cardholders.

The previously announced commitments of $62 million to support clinical trials and an additional $18.8 million to advance the National One Stop Shop were met with approval from industry stakeholders, representing significant strides toward enhancing medicine accessibility for all Australians.

The new Eighth Community Pharmacy Agreement (8CPA) will be supported by up to an additional $3 billion in funding – a higher amount secured by the Pharmacy Guild than initially proposed by the government.

Regarding Health Technology Assessment (HTA) reforms, Medicines Australia reassured stakeholders that the absence of recent announcements does not signal concern, as the HTA review report was only submitted to the Minister last week.

Ms de Somer explained, “Delays that occurred throughout the review period meant that we did not expect any announcements about HTA reform. We know reforms will take time to implement and require forward budget planning. The Medicines Australia roadmap of reforms outlines a 3-year plan that balances the opportunities for fast wins for patients and the more complex reforms that will require legislative change.”

Furthermore, she urged the Minister to release the HTA report and commit to subsequent reform steps, emphasising the need to expedite system improvements to accelerate patient access.

“Patients had to wait more than two years from the House of Representatives inquiry for the New Frontiers report to be released. The HTA review has now taken over a year. Patients cannot keep waiting. We need to get on with reforming the system to accelerate access.

“We know that a stronger PBS will deliver savings in other areas of the health system and increase productivity. Australia needs a system that delivers equitable access to the latest medical technologies within 60 days of TGA registration,” Ms de Somer stated.

The Budget is also silent on the Chemotherapy Review, National Immunisation Program Review, transition arrangements for the opiate dependence treatment program and full details of the Eighth Community Pharmacy Agreement (8CPA).

In reimagining healthcare across the entire patient journey, Health Industry Hub^TM is the only one-stop-hub uniting the diversity of the Pharma, MedTech, Diagnostics & Biotech sectors to inspire meaningful change.

The Health Industry Hub^TM content is copyright protected. Access is available under individual user licenses. Please click here to subscribe and visit T&Cs here.