Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Hansard source

I rise today to speak on the National Health Amendment (Simplified Price Disclosure) Bill 2013. Price disclosure was first introduced in 2007 and is something Labor has always been very supportive of. The PBS has been in existence in Australia since 1948. The PBS is the envy of many systems over the world. At the time of its creation it provided free medicines to pensioners, as well as 139 'lifesaving and disease preventing' medicines for free to certain other individuals. I cannot imagine even now that the creators of the Pharmaceutical Benefits Scheme would have imagined the scale and scope of it or the technologies that have been developed since. The number of medicines covered by the PBS is now in the thousands.

The scheme provides subsidised medicines to all Australians and means that concession patients pay no more than $5.90 for any PBS listed medicine. The remainder of the cost is covered by the government. The cost of this to government is around $9 billion per year, a substantial proportion of the health budget. The government negotiates with each drug manufacturer to agree on a price that a drug will be listed at on the Pharmaceutical Benefits Scheme. It is critical, therefore, that the government gets the best value for money out of the PBS. It is also of the utmost importance that the PBS is managed effectively and that the government gets the best price for medicines as possible.

Price disclosure, which is the content of this bill, delivers savings for government but, more importantly, provides Australian consumers with cheaper medicines. It has the additional benefit of requiring less administration. That is why Labor pursued this policy in government—because it reduces administration as well as costs to government, the pharmaceutical sector and consumers.

The original price disclosure reforms from 2007 covered only a very small number of off-patent medicines. In government, Labor introduced further reforms in 2010 that extended price disclosure to include almost all drugs around which there is multibrand competition. Drug manufacturers are required to tell the government how much they sell their medicines to pharmacists for. Simplified or accelerated price disclosure reduces the amount of time between when a manufacturer notifies the government of a reduction in price and when the government starts paying this reduced price. Previously the government continued to pay the agreed price for a drug even when pharmacists were paying the manufacturer a price that might have dropped significantly. It is common sense, therefore, that the government should not be paying more than the market price for drugs, especially because it is taxpayers' money.

The savings from these changes are expected to be of the order of some $835 million, commencing from 1 October next year. It is an incredibly important element of this bill. Since accelerated price disclosure was introduced in 2007 it has delivered billions of dollars in savings. This is something Labor were committed to in government, not just for the sake of getting savings themselves but for what we were able to do with them. These savings enabled the Labor government to list more medicines more quickly, and that is precisely what this government should be committing to do in introducing this bill. It was always our intention under this bill to invest the savings back into new medicines under the PBS. During Labor's two terms in government we listed roughly $6 billion worth of new medicines and extended the listings of others.

I am concerned that this government will not use the savings delivered through simplified price disclosure to put resources back into the PBS or into the health budget. To date, this government has not been the one the Australian public was promised, and there have been secrecy and cuts, especially in health. Despite promising not to cut any funds from health, the minister has confirmed that funds will be cut to honour the coalition's election promises. The government should not use accelerated price disclosure to prop up its own coffers; it should use it to the benefit of the health of our community.

We know there is a huge list of new medicines coming through the pipeline and that accelerated price disclosure is but one way governments can ensure that there are funds available for these new medicines to be listed as quickly as possible. I am conscious that PBAC deferred a decision, for example, on Kalydeco. This is a drug that is very important to hundreds of families across Australia. Australia is one of the few markets where Kalydeco is yet to be subsidised and I know this is causing a great deal of angst for many families with children born with the G551D genetic mutation of cystic fibrosis. The government should be absolutely assuring Australians that because of savings delivered through price disclosure it will prioritise the listing of important drugs like Kalydeco and others, when assessed by the PBAC, and keep these savings within the health portfolio.

Price disclosure does deliver savings and is one of the ways we can reduce the pressure on budgets. But it is critical that this money stays in the health portfolio and is invested in critical health infrastructure and the PBS and is also invested in medical research to ensure that facilities with young researchers are able to work on cures and new medicines for some of the world's most challenging diseases. We also need to ensure that these savings will be used to fund the new medicines coming through the PBAC process and to support other health priorities in this important portfolio. Given that this was a bill that in fact was signalled by Labor prior to the election, the opposition will of course be supporting the bill, but I will shortly be moving a second reading amendment.

I think it is interesting to note a couple of things about what happened in the context of the decisions and discussions about this particular bill. I note that when the minister introduced the bill he did so with some reluctance. And I understand why that is the case, because, having said one thing before the election—privately, to pharmacists, and going around the country and saying with a bit of a nod and a wink, 'Don't worry about that; we know how terrible the government's been, introducing this'—he now finds himself in exactly the same position that we did in government: that there are a substantial number of drugs ready for listing, ready to come down the PBAC pipeline, that he is going to have to find savings for. That is the reality. So it was with some irony that I noted that, during his contribution in the second reading debate, he said, 'I really don't want to do this; I don't want to do it, but Labor is making me.' What a ridiculous statement. He is in government; he can make a choice about that.

The reality is these savings are important. They are important for consumers, they are important for accountability on taxpayers' funds and they are important for ensuring that the government has the capacity to list new drugs. That is what the $800 million should be dedicated to, and I certainly will be watching very closely that that is exactly what this government does with this money. There are patients waiting, such as those who are waiting for the assessment of Kalydeco. It is over the government's new $20 million mark—as are most drugs, frankly, that are coming down the pipeline of the PBAC. Those drugs needs to be listed very quickly once they are assessed by the PBAC. So it is very important that the government actually makes that commitment to invest those savings back into the Pharmaceutical Benefits Scheme and the listing of new drugs.

I also note, particularly, the campaign run by the Pharmacy Guild around these changes, and I understand, absolutely, the pressures that many pharmacists face and what is happening in terms of the business model of community pharmacy. But I also acknowledge, as incredibly important: taxpayers' money, and the pressures on the health system and the pharmaceutical benefits system. If we are to have a sustainable PBS, we actually have to deal with these issues. Price disclosure is not going away. It will continue to be a very important element of savings in the PBS system to make sure we have the capacity to list new medicines. It is a challenging area, and I understand that. I understand that the guild has lobbied many members during the election campaign over these changes. But again I note: the government have realised that they are facing the same pressures with the PBS that we were, and have introduced and supported this bill.

As I said at the start, the opposition will not be opposing this bill, but I move the following second reading amendment:

That all the words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading the House notes that:

(1)   the bill effects a policy announced by Labor in government and the revenue raised should be committed to remain within the health portfolio; and

(2)   as new medicines become available the cost to government will only continue to increase and these savings will allow government to meet some of these increased costs without making cuts to other areas of the important portfolio of health.”

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