Government’s savings on PBS far outweighs investment in new medicines
Analyses released yesterday and today show that government will achieve more than $16 billion in PBS savings from 2010-18, whilst listings of new medicines over this period will cost only $6 billion.
The analysis conducted by PharmaDispatch, translates to government savings of more than $2.70 for every $1 spent on new medicines between 2010 and 2018.
Medicines Australia CEO, Tim James, welcomed the analysis as it demonstrates clearly that ongoing PBS reforms are generating billions of dollars in savings, with enduring mechanisms to continue the generation of savings.
“We know that successive reforms have put the PBS on a stable footing and continue to generate ongoing savings for Government. This report adds further to the large body of evidence that shows PBS expenditure is sustainable,” Mr James said.
“The May 2013 Victoria University report showed PBS reforms will deliver more than $20 billion of savings over the period 2007-18, and most recently the 2015 Intergenerational Report (IGR) which acknowledged growth in pharmaceutical expenditure will remain stable, growing only modestly to 2027-28.”
Of the $16 billion in savings highlighted in today and yesterday’s analyses, $12 billion is from the impact of previous reforms, including mandatory price reductions and price disclosure, with more than $4.3 billion coming from other one-off measures.
“These analyses show categorically that PBS reforms are more than delivering on their stated intent to provide the headroom to list new and innovative medicines on the PBS. These reforms, which were conducted in partnership with the industry, have not only delivered savings, but also entrenched mechanisms in the PBS to generate savings well into the future,” Mr James said.
“With an established body of evidence that shows the PBS is sustainable and delivering major savings to government, it is important now to ensure Australians have timely access to new medicines.”
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