Nicola Roxon (Gellibrand, Australian Labor Party, Minister for Health and Ageing) Share this | Hansard source

by leave—This year we celebrate a notable milestone in the provision of life-saving medicines to all Australians and the history of the Australian health system. In doing so, we reach back to 1948 and beyond. Sixty years ago Ben Chifley was Prime Minister and Doc Evatt was President of the United Nations General Assembly. William Dobell controversially won the Archibald Prize with his portrait of Margaret Olley, Don Bradman put aside the cricket whites and we mourned the death of Isaac Isaacs, member of the first Australian parliament and our first Australian born Governor-General.

So 1948 was a time of great beginnings. Post-war migration changed forever the face of Australia. The first Holden rolled off the production line—apparently yours for just $1,330 plus tax and on-road costs. Lionel Rose and Olivia Newton-John, and Kim Beazley, in fact, were born and so too was a government program that was to become such an integral part of the Australian health system that it would eventually come to embody the very notion of a fair society—the Pharmaceutical Benefits Scheme (PBS).

By the time the PBS commenced under the Chifley Labor government in June 1948, the Pharmaceutical Benefits Act had been passed twice, overturned once, and been the subject of a national referendum, a constitutional challenge, and a very heated public debate over the powers of the federal government. Before this though, in fact as early as 1919, the Australian government had introduced the Repatriation Pharmaceutical Benefits Scheme (RPBS) to provide free pharmaceuticals to ex-service men and women.

Social reform was firmly on the public agenda when, in 1941, in the midst of a world war, the Curtin Labor government introduced child endowment payments and, in 1942, the widows’ pension. In 1943 wartime tax increases were made more palatable by the establishment of a national welfare fund. It was used to finance maternity allowances and unemployment benefits. Importantly, for the first time, Aboriginal and Torres Strait Islanders were entitled to receive social service payments.

A profound social effect of the war was the entry of 200,000 women into the workforce. While necessary in wartime, taking mothers away from the home aroused concern and led the Curtin government to introduce child care. The first home-help to assist women in looking after older relations was also introduced.

Health authorities were also concerned about nutrition, especially after the introduction of rationing. A national survey identified a need for the controlled distribution of milk and eggs to vulnerable members of the community, in particular pregnant and nursing mothers. Supplies were also sent to remote parts of the country—just as today special arrangements allow for PBS medicines to be available to those in remote areas.

The war saw important breakthroughs in the pharmaceutical industry. Most significant was the discovery of penicillin in 1943 by Alexander Fleming and the Australian Nobel laureate Howard Walter Florey, later Chancellor of the Australian National University and one of the founding fathers of the John Curtin School of Medical Research. By the end of 1943 the Commonwealth Serum Laboratories—now CSL and one of the two largest providers of plasma therapeutic products in the world—were producing penicillin for Australian soldiers and civilians.

The health department oversaw wartime campaigns against tuberculosis and venereal diseases, and established a medical service for munitions workers. The Acoustic Testing Laboratories, which later became the National Acoustics Laboratory, was created to conduct research into the effects of noise on servicemen and later into deafness caused by maternal rubella. The laboratory also devised hearing aids and rehabilitation programs, a precursor to the work by Professor Graeme Clark in developing the multichannel cochlear implant, the bionic ear.

By the early forties there was a growing call for some sort of national health insurance to ensure that all Australians who needed health care were able to access it, regardless of their economic situation. This was opposed by the British Medical Association (BMA), which had yet to become the AMA. It would take another three decades before the Whitlam Labor government would be able to introduce national health insurance, in the form of the Medibank scheme. Medibank was dismantled by the Fraser government before being reintroduced as Medicare by the Hawke Labor government in 1983. While there was strong opposition to its introduction at the time, Medicare is of course now a fundamental pillar of the Australian health system which enjoys strong bipartisan support.

But I digress. It was in the environment of rapid social change and social reform that, in 1944, the Chifley Labor government announced its intention to legislate, through the Pharmaceutical Benefits Act 1944, for the provision, free of charge, of all medicines listed in an official formulary. The point of this was to ensure that social disadvantage was no obstacle to patients accessing the medicines they need.

The government was, again, fiercely opposed by the BMA, which was strongly opposed to the regulation of prescriptions on the grounds that it placed limits on what doctors were able to prescribe. The BMA wanted the new scheme to apply to all prescriptions, not just those listed on the Commonwealth formulary. As a result, the BMA refused to cooperate in the implementation of the new scheme and urged its members to sign a pledge not to use the proposed formulary and prescription forms. The BMA took their opposition to the High Court, which ruled that the Commonwealth did not have the power to legislate on pharmaceutical and medical services. So, a victory for the BMA and one that delayed the start of what we now know as the PBS by several years.

The doctors’ challenge prompted a referendum in 1946 where voters were asked, ‘Do you approve of the proposed law for the alteration of the Constitution entitled Constitution Alteration (Social Services) 1946?’ The referendum succeeded and gave the Commonwealth powers to legislate for the provision of pharmaceutical, sickness and hospital benefits, as well as medical and dental services. In 1946, the Australian government started negotiating five-year agreements with the states to provide hospital patient subsidies in return for the abolition of fees and means tests for the users of public wards. Subsidies were also provided for private hospital patients. These basic principles—both the introduction of the first PBS scheme and these hospital agreements that public hospital patients should receive free hospital care—are still in force today.

Following the referendum, in June 1947 the Chifley Labor government introduced a second Pharmaceutical Benefits Act. And as a result, in June 1948 the PBS came into being, providing 139 lifesaving drugs at no cost to patients. In its first year the PBS budget was £150,000 and antibiotics were the most recent medical discovery. The scheme was still opposed at this time by the British Medical Association amidst acrimonious exchanges with the government, but this time the PBS was here to stay. The PBS is now, like Medicare, a central pillar of the Australian health system and one of Labor’s great legacies to the Australian people. Labor persisted, as it persists today, in reforms such as these to ensure that patients receive the treatment they need, regardless of their position in society.

The PBS has continued to evolve; the needs of the disadvantaged were recognised when in 1983 concession card holders were given access to PBS scripts at a greatly reduced personal cost. In 1986 the Hawke Labor government introduced the PBS safety net to cap the amount that families would have to spend each year on PBS medicines. The evolution of course continues.

Since 1948 the number and variety of drugs subsidised and the number of patients benefiting has grown every year. From the 139 ‘lifesaving and disease preventing drugs’ originally subsidised in 1948, the PBS has expanded to cover 639 medicines with 2,986 branded products. Today, over 170 million scripts are subsidised through the PBS, at a cost which will exceed $7 billion this year. Every day, directly or indirectly, the PBS benefits all Australians. Whether in the treatment of the most virulent of cancers or providing treatments to manage cholesterol or to help give up smoking, the PBS is a vital tool in both the treatment and prevention of disease.

As the Minister for Health and Ageing I have a delegation under the National Health Act 1953 to approve listing of drugs on the PBS, but it is important that I note that the Pharmaceutical Benefits Advisory Committee is charged with the significant responsibility of recommending which drugs should be subsidised by the government. Neither I nor any other person can approve the subsidy of any drug on the PBS without their recommendation. This is how it should be and this is how it will remain.

Over recent years successive governments have agreed to consider PBS listings outside of annual budget considerations. This, and the move to publishing the schedule of pharmaceutical benefits online, has meant that new drugs can be added each month, giving earlier access for eligible patients to necessary medicines. In the few months since coming to office this government has demonstrated its commitment to providing all Australians with reliable, timely and affordable access to cost-effective and high-quality pharmaceuticals in a number of initiatives. The government has also extended the PBS to give Australians serving their country in diplomatic missions overseas access to the PBS.

My department is working to improve the transparency of the PBS process by publishing a list of drugs which are to be considered by PBAC for subsidy. This will allow for greater input from consumers and inform PBAC considerations. Importantly, too, the government is working with PBAC and the pharmaceutical industry to identify and make available the PBS medicines that meet the distinct needs of Aboriginal and Torres Strait Islander Australians, some of whom live in the most remote parts of Australia.

The cost of the PBS to the government has been an issue since soon after the commencement of the scheme. As author and health economist Sydney Sax notes:

Despite a tightly regulated system which empowered the Minister to determine rates of payment for, and conditions of supply of, pharmaceutical benefits, costs rose rapidly after 1956-57, when they totaled ₤11.7 million, to ₤15 million in 1957-58 and ₤21 million in 1958-59. The legislation had provided for the establishment of medical and pharmaceutical benefit committees in each state to examine and report on possible abuses in the supply of benefits, but it was still found necessary in 1949 to introduce a 5 shilling charge in the hope that it would discourage over-prescribing by doctors, and so act as a brake on costs.

It is interesting to note that where once the PBS was opposed by the medical profession, we are now faced with the opposite problem of overprescribing. While the historic growth of the PBS has been significant, a number of specific measures are being adopted to ensure the balance between the growth of the PBS and appropriate access by Australians to cost-effective, emerging pharmaceutical therapies. The mechanisms we are putting in place are appropriate to manage the growth of the PBS.

On 1 August 2008, a little over a month from now, the Australian government will apply statutory price reductions to PBS medicines where multiple brands are available. Some medicines will receive a two per cent price reduction while others will receive a 25 per cent price reduction. Ad hoc price reductions are also an ongoing feature of PBS management. The most notable of these in recent times was the 20 per cent price reduction for simvastatin. It is forecast that this one-off reduction will reduce the forward estimates for the PBS by approximately $300 million.

Given the ever-increasing cost of the PBS, measures such as these are necessary to ensure that the scheme remains sustainable into the future and that Australians will continue to have reliable, timely and affordable access to a wide range of medicines. Stewardship of the PBS is a tremendous responsibility, because ultimately it is about ensuring that Australians have affordable access to medicines that they need. We inhabit a world seemingly ruled by statistics. We have all sorts of statistics on life expectancy, on infant mortality, on diseases that are cured. Certainly the PBS has contributed to those statistics improving, but there are many things that we cannot measure in dollars or fractions of a per cent—the joy of a life saved; the security that comes with knowing we have access to affordable medicines for our family. As a nation as well as individuals we have set ourselves a responsibility. We have acknowledged that the health of one of us is the responsibility of all of us. By doing so we show that we appreciate that when as a community we are enriched we all benefit as individuals.

We could think of the PBS as Chifley’s gift to us. The story of Labor’s fight to introduce the PBS is consistent with the Labor tradition of fighting for necessary reforms in health—and, indeed, in all sectors of Australian society. This government will continue in this great tradition of reform by working to build an Australian health system to deal with the new challenges of the 21st century.

I ask leave of the House to move a motion to enable the member for North Sydney to speak for 14 minutes.

Leave granted.

I move:

That so much of the standing and sessional orders be suspended as would prevent Mr Hockey speaking for a period not exceeding 14 minutes.

Question agreed to.

See this speech in context