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

In summing up, I would like to thank all members who have participated in this debate. The purpose of the National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2010 is to deliver a more efficient and sustainable PBS, better value for money for Australian taxpayers and policy stability for the pharmaceuticals sector. We in Australia can be very proud that we have a world-class PBS that provides timely access to medicines for all Australians. The reforms in this bill will guarantee that the PBS continues to provide this essential service to Australians while at the same time ensuring that every precious health dollar is spent effectively.

The proposed changes to pricing policies recognise that competitive pricing already exists in the market for many PBS subsidised medicines, but the changes acknowledge that Australian taxpayers should be benefiting from this market competition and the lower prices that result from it. The reforms will result in no extra costs for patients. In fact, patients will benefit from price reductions where the price of a medicine falls below the general co-payment amount. The direct saving to consumers from these new measures is independently estimated to save general patients on average close to $3 per prescription.

During this debate some members have raised the issue of consultation with industry on these reforms. The government negotiated collaboratively and closely with the pharmaceuticals industry to develop these reforms. Both Medicines Australia, which represents about 50 companies, and the Generic Medicines Industry Association, which represents five companies, were involved in discussions with the government and were asked to provide proposals to enhance the sustainability of the PBS. Discussions with Medicines Australia proved to be very fruitful, and the matters agreed between Medicines Australia and the government were ultimately given expression in the memorandum of understanding.

On multiple occasions, GMiA was able to discuss options for reforms to the PBS with the government, including with me, as the minister, in my office and with senior officials of the Department of Health and Ageing. GMiA had a good hearing and the government valued the exchange of views. However, I do need to note here that GMiA’s key proposal to the government in these discussions was that patients should be made to pay some $5 more for off-patent medicines made by originator companies compared to the same drugs made by generic companies. This proposal would have resulted in concessional patients paying nearly twice as much as they currently do for some off-patent medicines. The government could not support this proposal. Notwithstanding these differences of view, the government continues to work closely with the industry on how these reforms will be implemented, through a working group which includes GMiA, pharmaceutical wholesalers and Medicines Australia.

I also note that it has been suggested that a vote on this bill be deferred until the Senate Community Affairs Legislation Committee has reported to the Senate on its inquiry into the bill. In fact, I understand that the member for Dickson has now moved such a motion. Of course, this is not the normal procedure which has been followed in the past in the parliament. We are operating in a new parliament and, if that is the will of the House, then so be it. What is being proposed is that the House not pass this legislation while a Senate inquiry is underway. Following the procedures of the past would mean that debates on legislation in the House would be delayed, and usually a Senate inquiry would commence only when legislation moved to the Senate. In recent times, those inquiries have been commencing earlier to enable the quick handling of important matters such as this one. The government would not press for this to be voted on in the Senate before the Senate committee reported on this matter.

We believe that it is an appropriate mechanism for the opposition to reserve its right to state whatever position it likes in the Senate. However, I note that the Liberal opposition have previously indicated that they would support this measure. I do want to record my concerns here that this appears to be an indication that the Liberal Party will oppose this measure with its very significant savings for taxpayers, money which can be used for other important health initiatives, also failing to honour the agreement negotiated and reached with Medicines Australia. We think that the opposition will have plenty of time when the Senate committee reports to the Senate. We will have the capacity to consider those findings when the bill is debated in the Senate. Any amendments passed by the Senate will come back to the House for consideration.

This is the usual way of doing business. I understand that the Liberal opposition do not want to continue with that being the usual way of doing business. We will make an assessment. As I say, the legislation would not be voted on in the Senate prior to the Senate committee reporting but it would absolutely be our preference that this be noted in the House, that the procedures continue and that an opportunity be provided for the bill to be handled in a prompt way at an appropriate time in the Senate.

I thank Medicines Australia for their very cooperative approach through very difficult negotiations. This was not easy for industry or for the government, but I believe that Medicines Australia has been far-sighted in wanting to protect the interests of its members, particularly in providing innovator drugs and ensuring that the PBS is sustainable in the future. The reforms in this bill support a more sustainable PBS, while providing certainty to industry in relation to medicines pricing policy. This was a key factor for Medicines Australia. These changes will ensure that all Australians can continue to benefit from PBS subsidised medicines now and in the future.

Finally in the debate, some members asked whether these reforms would affect jobs, particularly in generic medicines companies. I would like to emphasise that the key mechanism in the bill, price disclosure, captures the price discounting that already occurs in the market. This discounting is a result of decisions by companies, not by government. The government and taxpayers will simply be paying the average discounted price for pharmaceuticals. The reforms will affect both innovator and generic companies as the majority of medicines that are affected by price competition are supplied by Medicines Australia member companies. It can be argued that this sector will be more affected by these arrangements than those companies represented by GMiA.

The policy stability encapsulated in the memorandum of understanding provides a secure environment for future investment. For example, Eli Lilly has announced that it will contribute up to US$50 million to help expand and develop the biotechnology industry in Queensland. Eli Lilly believes the pricing certainty provided by this policy will help to foster investments like this one in Queensland’s biotech sector. In addition, there are 19 medicines estimated to come off patent in the next 12 years which cost the PBS $2.3 billion in 2008-09. Some high-volume drugs will come off patent as early as 2012. Overall, these 19 medicines represent almost 30 per cent of total PBS expenditure and these patent expirees will provide the off-patent sector with significantly increased opportunities to expand their business and jobs.

I commend the bill to the House. It is our preference that the bill be able to proceed to the Senate where it will await the outcome of the Senate inquiry. Obviously, it is a matter for the opposition if they would like to take a different approach. Ultimately, if that is the will of the House, we will be seeking the opposition’s support to ensure that the matter can be progressed quickly in the Senate following the tabling of the Senate committee report. I put on record here our concern that the Liberal Party appear to have changed their position, putting at risk nearly $2 billion worth of savings over the next forward estimates period.

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