Sharp drop in average cost of PBS medicines


Reforms of the Pharmaceutical Benefits Scheme have produced a large drop in the 
average cost to government of PBS prescriptions. 

The sharp drop is confirmed in the June 2012 PBS data – the first month of data to
include the full impact of the major 1 April 2012 price reductions. 

The 1 April price reductions – the largest set of PBS price reductions in the history
of the scheme – have seen a $5 drop in the average cost of prescriptions – falling
from just over $44 to just over $39.
This is the clearest demonstration yet of the significant savings being reaped by the
government through the Expanded and Accelerated Price Disclosure program. It is
further confirmation that PBS expenditure is being kept well under control.
These findings are contained in the Medicines Partnership of Australia’s PBS
Scorecard for August, issued today. The scorecard can be viewed at
The data shows growth in government expenditure on the PBS in the 12 months to 
30 June 2012 was 6.4%, before any adjustment for inflation. Despite an unusual
spike in the official data at the end of the financial year, the annual figure was similar
to growth recorded in the previous financial year, and well below historical rates of

The volume of prescriptions recorded in the June 2012 PBS data was approximately
75% higher than the same month in 2011, and was 30% higher than any other
month in history. This has provoked some comment, and is clearly not a true
reflection of actual dispensing activity in community pharmacies in June. Detailed
analysis of the data reveals that the Department of Human Services (DHS, formerly
Medicare Australia) slowed down their average processing times in the nine months
to April 2012. The backlog of pharmacy claims was rapidly cleared by DHS in May
and June. This volatility is likely to have resulted in 2011-12 financial year growth
being overstated in the official figures. 

This is another example of why the Medicines Partnership of Australia argues that
we need to have clear agreed, publicly available measures of volume and price
growth in the PBS, so that government, industry and all stakeholders can make
meaningful comparisons and draw reliable projections of this important public sector
expenditure item.
The Medicines Partnership of Australia is: The Pharmacy Guild, Medicines 
Australia, the Generic Medicines Industry Association, the Australian SelfMedication Industry, the Pharmaceutical Society of Australia and the National
Pharmaceutical Services Association.
12 August 2012 

Media inquiries:
Greg Turnbull 0412 910 261