Cost of Australian PBS rises below rate of inflation for 2013-2014

The Australian Department of Health has confirmed that growth of the Pharmaceutical Benefits Scheme cost was negligible for the financial year 2013-2014. Senior departmental officials confirmed that the PBS grew by only A$150 million ($132 million), well below the rate of inflation, to A$9.15 billion last year.

Trade group Medicines Australia has welcomed this news. Chief executive Tim James said: “This latest data just confirms what Medicines Australia has been pointing out for a long time. The tough price disclosure reforms the medicines industry developed and agreed with government over the past eight years are paying off, with massive ongoing savings for taxpayers and consumers. The rest of the Health portfolio may not have made the tough decisions to bring costs under control, but the PBS is flat as a pancake. There is clearly fiscal room to get new medicines listed quickly for Australian patients.”

The Final Budget Outcome for 2013-2014, released in September, included a fifth successive writedown in PBS expenditure, of A$168 million, and showed the PBS as costing 14% (A$1.7 billion) less than the Australian government forecast it would in 2011.