Andrew Southcott (Boothby, Liberal Party, Shadow Parliamentary Secretary for Primary Healthcare) Share this | Hansard source

Yes, I did fill one this afternoon. Real spending per capita on pharmaceuticals is also expected to continue to increase over time, as is health spending as a proportion of GDP. For the financial year ended 2009, Commonwealth government expenditure on pharmaceutical benefits amounted to some $7.7 billion. The annual growth rate of PBS expenditure is currently around 10 per cent.

PBS expenditure is driven by many factors. Relative spending on pharmaceuticals per person is highest for those in the 75 to 84 age group. A rapidly ageing population will be a key driver of prescriptions dispensed and the overall cost of pharmaceuticals. It is important that the government is able to secure value for money for pharmaceuticals—and the coalition provided genuine reform to do so. In 2006, after extensive consultation and negotiation, the previous coalition government announced a series of reforms to support the sustainability of the PBS. Mr Deputy Speaker, you will remember it was anticipated in the first Intergenerational report in 2002 that the PBS’s share of GDP would increase by five times over 40 years—and that was one of the imperatives in addressing the reform of the PBS. The key reforms which were initiated by the coalition included the separation of single-brand and multiple-brand medicines into F1 and F2 formularies; statutory price reductions for multiple-brand medicines; a 12½ per cent price reduction when the first bio-equivalent drug for a single-brand medicine was introduced and when a medicine moved from F1 to F2; price disclosure arrangements triggered with the listing of a new brand of medicine; a $1.50 incentive to community pharmacies to dispense a substitutable premium-free medicine; an incentive payment for community pharmacies to process claims using PBS Online; and additional funding through the community service obligation for pharmaceutical wholesalers who met specific service obligations.

These reforms were successful in ensuring the sustainability of the Pharmaceutical Benefits Scheme but they were not undertaken lightly. They were subject to extensive consultation and negotiation prior to the introduction of any legislation. The legislation before the House, which is the result of a memorandum of understanding between Medicines Australia and the government, has not allowed all parties to have input into the MOU. That is why it is important for the parliament to be able to consider all views before voting on this legislation. The legislation has been referred to the Senate Community Affairs Legislation Committee, and that committee will report on 16 or 17 November. The opposition believes that, before we give this bill a second reading, we should be able to have the benefit of the views of all parties and all stakeholders. That is why the member for Dickson has moved an amendment which will have the effect of not giving the bill a second reading until the Senate Community Affairs Legislation Committee has reported.

The opposition have demonstrated in a number of ways that we believe in the sustainability of the Pharmaceutical Benefits Scheme. It is important to make sure that the scheme is sustainable but, in such a multibillion-dollar expenditure, it is absolutely critical that the parliament has the benefit of all the information and that we are able to consider that information. That is why the opposition has moved this amendment and supports it.

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