New report reveals $3 billion Government windfall and confirms PBS is sustainable
A report on the impact of PBS reform released today by the Centre for Strategic Economic Studies provides conclusive proof that the Pharmaceutical Benefits Scheme is sustainable, Medicines Australia’s acting chief executive Brendan Shaw said today.
The study also shows that the 2008 reforms will deliver the Government an unexpected $3 billion windfall in savings.
“Last year’s reforms of the PBS were a response to concerns raised in the First Intergenerational Report that growth in the PBS was not sustainable,” Dr Shaw said.
“The CSES report shows very clearly that the 2008 PBS reforms are working and that the PBS is now sustainable.
“The Government expected the price cuts announced in the PBS reforms to save the taxpayer $3 billion over 10 years.
“This new report shows is that PBS reform will actually deliver savings to the public purse of $6 billion – $3 billion more than the Government had banked on.
“Effectively, industry has delivered Government an unexpected $3 billion windfall.
“This report reveals that PBS growth is much lower than expected and that savings to Government from last year’s PBS reforms will be much higher than expected.”
The PBS reforms were designed to allow the market to drive down the costs of older, off-patent medicines, allowing the Government to continue to subsidise the latest, most innovative medicines as they became available.
“The report provides hard evidence that the PBS is working well, the reforms are doing what they were designed to do and no further reform is needed in this area,” Dr Shaw said.
“This is proof that the impact of PBS reforms and ongoing mandatory price cuts have ensured that the sustainability of the PBS in the medium-term is not open to question.
“CSES concludes that average growth of the PBS will be in the order of 3.7 per cent per annum to 2013-14.”
“That is sustainable by any measure, particularly given the ageing population. So it’s good news for taxpayers, and it’s good news for patients.”
The Impact of PBS Reforms on PBS Expenditure and Savings is an independent report commissioned by Medicines Australia. It has been validated by Access Economics.
The report is available from here
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