Australian pharma takes credit for helping return budget to surplus

The Australian pharmaceutical industry is making a major contribution to returning the Federal Budget to surplus, trade group Medicines Australia chief executive Brendan Shaw reminded Treasurer and Deputy Prime Minister Wayne Swan yesterday.

In Medicines Australia's pre-Budget submission to the Treasurer, Dr Shaw underscored the importance of Medicines Australia's Memorandum of Understanding with the Commonwealth which was delivering A$1.9 billion ($2.02 billion) in savings to the Pharmaceutical Benefits Scheme.

Estimates commissioned by the government show that the original 2007 reforms to the PBS will generate up to A$5.8 billion in savings by 2018, Dr Shaw told the Treasurer in a letter. The PBS grew by just 2.4% in nominal terms in 2011, less than the inflation rate of 3.1%, suggesting that government spending on the PBS fell in real terms in 2011.