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Latest news
8 November 2010
Patients’ access to life saving, prescription medicines under threat
Patients’ access to life saving, prescription medicines is under threat, if a controversial Bill is passed by the Parliament.
The National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2010 gives effect to a new policy that will cut the Government’s funding of the Pharmaceutical Benefits Scheme (PBS) by $1.9 billion.
Full page advertisements in metropolitan newspapers today highlight the serious and damaging impacts of the new policy, ahead of a Senate Committee of Inquiry hearing on the Bill tomorrow.
“In a desperate and short-sighted bid to try to balance its budget, the Government is trying to rush through the Parliament damaging policy that will change and disrupt supply of life saving, prescription medicines. Patients may not get the medicines they need,” Chairman of the Generic Medicines Industry Association (GMiA), Dr Martin Cross, said.
“The new policy is poorly thought through and was developed without consultation with impacted industry stakeholders who could have identified the serious problems the Bill creates for Australians,” he said.
Likely stock shortages
The new policy imposes a series of price change points on over 1600 products. Each price change point is likely to result in shortages of medicines at pharmacies. The Government has not advised the pharmaceutical industry, pharmacists or patients how this situation will be managed.
Supply chain disruptions
Manufacturers will be forced to examine their ability to continue to supply products with unrealistically low prices. If they choose to no longer supply a medicine, there is no guarantee that other suppliers will fill the void. If manufacturing moves off shore, the supply chain will be lengthened and become less responsive to immediate local problems. Again, the Government has not advised the pharmaceutical industry, pharmacists or patients how this situation will be managed.
Removing Australia’s capability to respond quickly in the event of a pandemic or other national disaster
A local manufacturing capability is a valuable resource that ensures Australia can respond quickly to serious and urgent issues affecting the population’s health. The new policy will damage the manufacturing capability and could threaten the nation’s ability to look after its citizens in times of disaster.
Damage to Australia’s leading manufactured goods export industry
Medicines are Australia’s leading manufactured goods export industry. Bringing in more than $4 billion a year in revenue to the nation, it is a bigger export industry than cars, wine and IT. The Bill will damage the industry as companies will move their manufacturing off shore to places like China and India where manufacturing costs are lower. Local jobs and opportunities will disappear from Australia.
“The Bill is so flawed because it arose out of highly irregular and inappropriate Government processes that resulted in a protectionist deal negotiated in secret between the Government and the peak body for the large branded companies, Medicines Australia, Dr Cross said.
The PBS provides necessary medicines that contribute greatly to the health and well-being of the nation, at a cost the community, taxpayers and the Government can afford.
The PBS was subjected to a major, ten-year reform process in 2007 that ensures it remains sustainable. The 2007 reform was anticipated to save the Government $3 billion. Three years into the ten-year reform, three, independent analyses – including the Government’s own - show the savings will be double that. Most likely the total savings will be even higher than that. Already the 2007 reform has cost a large number of jobs and some companies have been forced to close down R&D and manufacturing plants.
“The Bill is altogether unnecessary because the PBS does not need “fixing”. It provides good value for money, the cost is not out of control and it is sustainable because of the 2007 reform. Australia’s expenditure on medicines as a proportion of GDP is low by international standards - in the bottom third of OECD countries,” Dr Cross said.
“The Government needs to understand the trajectory of the 2007 reform to know the total savings that will be generated over ten years, before it can decide whether further savings are needed now.
“If, after understanding fully the impact of the 2007 reform, further savings are required, good governance would dictate that all industry stakeholders should be consulted, especially those most impacted by a new policy. Wider, more considered consultation will result in more and better policy proposals for effecting savings.
“The new policy layers more change on a system still in the throes of reform and is like building on a foundation of wet cement.
“It is not clear what the new policy is trying to “fix”, except the Government’s budget deficit. That is the only explanation for the Government’s rush to push the Bill through the Parliament, despite the flaws being repeatedly drawn to the Government’s attention.
“The Pharmaceutical Benefits Scheme (PBS) is arguably the world’s best pharmaceutical re-imbursement system. It must not be jeopardised through inappropriate, ill-considered and rushed reform. To do so is to play Russian roulette with a national treasure.
“This is a cynical cash grab that Australia cannot afford. The Senate Committee should reject this flawed Bill and demand further, detailed scrutiny of the need for a new policy, including consultation with all industry stakeholders,” Dr Cross said.