Findings question capped budget approach to Australia’s Pharmaceutical Benefits Scheme
New research from The George Institute for Global Health questions the notion that a capped budget for new medicines is a good policy choice for Australia, as recommended for the Pharmaceutical Benefits Scheme (PBS) in the recent Commission of Audit.
To address excessive health expenditure, the Commission of Audit recommended that Australia’s PBS should be reformed to align with New Zealand’s PHARMAC model, where an independent entity manages access to subsidised medicines under a capped budget.
The paper, published in the Australian Health Review, has reviewed the current reimbursement system in Australia and compares it to that in New Zealand, has highlighted a discrepancy in listing new medicines in New Zealand compared with Australia that has not improved in recent years.
Lead Author Colman Taylor says “The Australian healthcare system is built on equity principles that include providing universal and affordable access to high quality medical, pharmaceutical and hospital services.
“Based on the data presented, there is a clear difference in the number of new medicines listed in Australia and New Zealand.
Although, we cannot definitively link the use of an annual capped budget for medicines to reduced access or health outcomes, our data raises questions regarding the consequences of such a policy”
Factors like an aging population, longer life expectancy and increasing prevalence of chronic disease means that the total government health expenditure is expected to rise.
As a result, health professionals and commentators have raised concerns over current expenditure patterns, suggesting that they are unsustainable.
In Australia, the overall health expenditure for 2012-13 was $100 billion, with the Pharmaceutical Benefits Scheme (PBS) representing a significant portion.
The study updated previous research showing New Zealand listed less than half of the new medicines listed in Australia over a 10-year period.
It found most of the medicines not listed in New Zealand during this period remain unlisted today. Further, in the previous 12-months Australia listed 17 new medicines on the PBS and New Zealand listed only one medicine that was not already listed in Australia.
Consequently, the results question the notion that a capped budget for new medicines is a good policy choice for Australia.