Andrew Southcott (Boothby, Liberal Party) Share this | Hansard source

I am pleased to be speaking on this bill on the co-payment for the PBS. I thought I might start my speech by drawing the attention of the House a report by the Commonwealth Fund, which was released in the middle of last year. The Commonwealth Fund puts out regular surveys of countries, looking at their health systems and how they compare. They have recently expanded the number of countries they look at to 11 countries—the UK, New Zealand, Canada, the US, the Scandinavian countries, France, Germany as well as Australia. The data is consistent with all the previous reports from the Commonwealth Fund, and Australia's health system does stack up very well. We stack up well on people enjoying healthy lives, long life expectancy and the quality of care. We are seen as having an efficient and fair system. This is despite the fact that we still have one of the lowest spends in health per capita. The 2011 figure for Australia was $3800 per capita, compared with the United States figure of $8508. In fact, of the 11 countries only the UK and New Zealand spent less.

So let's put some reality into this debate and remember that we are a healthy country with a good and efficient health system. It is in that context that we need to consider this measure. The Pharmaceutical Benefits Scheme has been one of the fastest rising areas of Commonwealth government expenditure. We have seen it increase dramatically over the last 15 years, and it is in this context that the government decided to increase patient co-payments in this budget and increase the safety-net thresholds for the Pharmaceutical Benefits Scheme. It is a savings measure; it involves savings of approximately $1.3 billion over the next four years. Those savings go towards the Medical Research Future Fund. We will still see more spent by the government on the PBS: it will go up from $9.2 billion in the last financial year to $10.2 billion by the last year of the forward estimates. This involves a one-off increase in patient co-payments.

When we talk about co-payments, there has been a co-payment for the Pharmaceutical Benefits Scheme since 1960. When it was introduced in 1960, there were very few of the advanced drugs that we see now. It was a much simpler Pharmaceutical Benefits Scheme, but all the same we had a co-payment— probably introduced when Harold Holt was Treasurer in 1960 federal budget. It was the Labor Party that introduced the co-payment for concession-card holders: Bob Hawke, Brian Howe, Jenny Macklin and the member for Canberra in another incarnation all understood the need for a patient co-payment. With this proposal, the general patient's the co-payment, which sits at $36.90, will increase by $5 in addition to movements on the CPI. On average general patients use two PBS subsidised prescriptions per year; this means that the average user, who is not a concession-card holder, will contribute an additional $10 per year. For people with concession cards, the co-payment, which is currently $6, will increase by 80 cents in addition to the CPI. People with a concession card on average use 17 scripts each year, and under the new arrangements they will pay $13.60 per year for subsidised medicines.

There are a number of medicines that are already less than the current general co-payment and they account for more than 40 per cent of PBS listings and more than 70 per cent of general patient prescriptions. What that means is that for these patients and for these scripts, the increase in the co-payment will have no effect. Take, for example, Amoxicillin, a common antibiotic currently costs $13.85 and is well below the PBS co-payment. After increases in the general co-payment, there will be no impact on the price of Amoxicillin. By the time the co-payment changes come into effect on 1 January next year, more than 55 per cent of listings will be below the general co-payment amount.

We also need to mention that the government continues to contribute the majority of the costs of many pharmaceuticals—insulin, a common treatment of diabetes, has a cost through the PBS of around $220, for which only $6.90 is paid by concession holders and $42.70 for general patients. Over the last decade we have seen the cost of the PBS increase from $5 billion to around $9 billion. It is expected to continue at around 4 to 5 per cent per year, but a decade ago it was growing at between 11 and 13 per cent each year. This is a simple measure to make the PBS sustainable.

As members of parliament we are constantly made aware of new pharmaceuticals are coming onto the market that are going through the hoops of assessment by the TGA and by the Pharmaceutical Benefits Advisory Committee and then by Pharmaceutical Benefits Pricing Authority. It is important that Australia does need to be able to bring these medicines to consumers in a sustainable way. Let us never forget the debacle of drug listing that occurred under the previous government. I will never forget going to a Medicines Australia dinner, where the industry minister said that the government would cease to list drugs on the PBS until the budget was in surplus. It is something that no federal government had ever tried before; it was not sustainable and it lasted about six months. What it did was to create massive uncertainty about the listing process.

Some of the newer drugs—some of the tyrosine kinase inhibitors used in the treatment of melanoma—can cost up to $110,000. Similarly drugs used in advanced breast cancer can cost about $38,000; drugs for prostate cancer can cost around $27,000. There is an expectation for people who have melanoma or breast cancer or prostate cancer that the government will be able to fund these and fund them in a sustainable way.

The PBS co-payment has been increased in the past. As I said, the concessional co-payment was first introduced by the Labor Party in the 1991 budget. The savings we make will go towards the Medical Research Future Fund. This is a very forward-looking fund. Within six years, Australia will have the largest capital fund in the world dedicated to medical research. When fully mature in 2022-23, it will mean a doubling of our annual investment in medical research. It will benefit all of our excellent medical research institutes and will provide an extra $1 billion in support to our world-class Australian researchers each year.

Since the Abbott government came to power, we have listed or expanded the listing of 181 new medicines on the PBS. We have not had a repeat of that unfortunate episode under the previous government where they simply stopped listing new drugs because they could not afford them. The Howard government introduced price disclosure for pharmaceuticals, which has been a very important step in putting the PBS on a path to sustainability.

When Labor were last in power, they promised stability for the PBS, but instead it was complete chaos. They deferred the listing of medicines already recommended by the Pharmaceutical Benefits Advisory Committee. Patients suffering from schizophrenia, chronic pain, lung diseases and other afflictions had their medications delayed for months under that government. Labor politicised the PBS listing process and undermined the independence of the PBAC. We have restored the independence of the listing process and the PBAC's recommendations will no longer be ignored.

As I said before, Labor in government have supported increases in the PBS co-payment. In 1986, they doubled the PBS co-payment for general patients from $5 to $10. They introduced a PBS co-payment for pensioners. In 2004, they supported a one-off increase to the PBS co-payment. That was the famous backflip by their then leader, Mark Latham. So the Labor Party have shown that they do support a PBS co-payment and do support increases in PBS co-payments where it is appropriate. What we are seeing now is the Labor Party being opportunistic. I think this is a good example of what Paul Kelly described in The Australian as politics not rising to the challenge we face. Parliament is not rising to the challenge we face in restoring the budget to surplus and in implementing sensible measures to make Commonwealth programs sustainable.

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