This year’s Budget has again confirmed the significant savings being reaped by taxpayers from ongoing reforms of the Pharmaceutical Benefits Scheme.
The Budget revealed that the PBS will cost $4.5 billion less from 2013-14 to 2016- 17 than was expected in last year’s Budget. $0.7 billion of that was attributed to increases in co-payments and safety net thresholds to be introduced from January 2015. However the remaining $3.8 billion is a windfall benefit from existing reform and lower than expected growth.
According to the Medicines Partnership of Australia PBS Scorecard, issued today, the amount taken out of the PBS forward estimates over the next three financial years had a larger positive impact on the Budget bottom line over that period than any savings measure in the 2014 Budget. The PBS continues to do more than its share of fiscal “heavy lifting”.
The 2014-15 Health Portfolio Budget Statements also showed all ongoing savings from PBS Reforms. Next financial year the savings will be running at more than $2 billion per year. Two years later they will have increased to more than $2.5 billion per year and cumulatively they will deliver $9.9 billion over the next four years.
Clearly, PBS Reforms are delivering massive savings. With those savings come significant – and growing – impacts on all parts of the pharmaceutical industry – manufacturers, the supply chain and community pharmacies.
The Budget also included a 13 per cent increase in PBS co-payments from 1 January 2015, over and above the usual CPI increase – an increase of $0.80 per prescription for patients with a concession card and of $5.00 per prescription for those without a concession card. Safety net thresholds will also increase well above inflation through to 2018.
The most recent study on the impact of sharp co-payment increases concluded that increases in patient contributions particularly impact on concessional patients’ ability to afford medicines. This is an impact that should be of concern to policy makers. The Medicines Partnership of Australia is: The Pharmacy Guild, Medicines Australia, the Generic Medicines Industry Association, the Australian Self-Medication Industry, the Pharmaceutical Society of Australia and the National Pharmaceutical Services Association.