For first time in 20 years, Australia's PBS spending in decline

For the first time in 20 years government expenditure on the Pharmaceutical Benefits Scheme (PBS) in Australia is in decline. This finding was revealed on Friday (March 22) at the Pharmacy Guild of Australia’s Annual National Conference during the plenary session sponsored by Alphapharm, a member of Australia’s Generic Medicines Industry Association (GMiA).

The Guild’s national director of health economics, Stephen Armstrong, said: “For the 12 months to November 30, 2012, the latest available data based on date of supply, PBS and Repatriation PBS expenditure decreased by 0.5%. The data published on the Medicare Australia [the R&D-based industry association] web site currently shows growth of 13.5% year-on-year. The entire industry knows that this completely misrepresents the true condition of the PBS. That data is meaningless, of no use to commentators, the industry or policy-makers, and should not be published.”

In the period since the major round of price disclosure reductions on 1 April 2012 government expenditure decreased by 3.1% compared with the same period in 2011. This period does not capture the December 2012 price reductions applied to the top two drugs on the PBS, atorvastatin and rosuvastatin. These medicines have now entered the price disclosure cycle. Due to price disclosure and other established methods of PBS cost containment further price reductions are scheduled to apply to 92 drugs on 1 April 1, 2013 and up to about 50 drugs on 1August 1, 2013. These will reap further savings for taxpayers. PBS growth is not only contained, it is now non-existent, the Guild stated.