Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to 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.”

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I second the amendment.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the National Health Amendment (Simplified Price Disclosure) Bill 2013. I thank the member for Ballarat for her contribution, but I will just reflect on a little bit of history around price disclosure. It was something that was originally introduced by the Howard government in 2007. At that time it was a significant reform to place the PBS system—which is, arguably, the best system in the world—on a sustainable footing. It aims to ensure that the price at which government subsidises medicines more closely reflects the market price. This provides us with more funds to provide funding for additional medicines as they come up.

Under price disclosure, the drug companies are required to report data on sales to wholesalers, pharmacies and other suppliers. That data is used to calculate a weighted average price at which the PBS medicines are actually sold in the marketplace. The weighted average price is compared to the PBS price to determine whether a price reduction will apply. Under the current arrangements, price disclosure cycles take around 18 months to complete. The changes provided in this bill will shorten the period to 12 months.

The bill amends the National Health Act 1953 to improve the operation of the Pharmaceutical Benefits Scheme by seeking to achieve better value for medicines that are subject to competition in the marketplace. We all know that, as a result of the financial mess we have been left by those opposite, these savings are going to be very important going forward.

The PBS provides Australians with timely, reliable and affordable access to necessary and cost-effective medicines. The price disclosure arrangements seek to ensure that the price at which the government subsidises multiple brand medicines more closely reflects market prices.

It is interesting that the member for Ballarat talked about Labor's decision to make this change, but, as usual with Labor's attempts at making any changes, it was just announced, with no consultation whatsoever with the industry. That is despite the clause in the Fifth Community Pharmacy Agreement which requires the Commonwealth to consult in good faith on any budget initiative which has a significant and sustained impact on the viability of community pharmacies.

This simplified price disclosure will streamline the operation of the price disclosure arrangements and allow price reductions to occur sooner and more frequently after medicines become subject to market competition, and all medicines will be merged into one ongoing cycle rather than having several different cycles over the year. The length of each price disclosure cycle, as I said earlier, will be reduced, from 18 to 12 months. The first reduction will occur on 1 October 2014.

The simplified price disclosure measure was, as I just touched on, announced by the former government as part of its economic statement in August 2013. Based on their estimates, it will deliver some $835 million in budget savings. These savings have already been factored into the forward estimates for the PBS and the RPBS, and not implementing the simplified price disclosure policy would require the government to find savings in other programs. This simplified price disclosure will streamline the operation of the current price disclosure arrangements. That is one of the key things the coalition took to the electorate. It is about reducing red tape and regulation and making it easier for businesses to operate. The changes will also result in savings to consumers because they will pay less for some PBS medicines.

The simplified price disclosure will be achieved by amending the act and regulations, and the amendments to the act will expressly provide for 1 April or 1 October to be the price disclosure reduction days. Other days will continue to be prescribed by regulations to ensure that the existing PBS price for a medicine is not reduced by a price disclosure reduction unless the weighted average market price is 10 per cent less than the PBS price on the day the 10 per cent test is applied. The bill also contains an appropriate application provision to manage the existing disclosure cycles. Schedule 1 of the bill relates to the amendment to the existing PBS price for a medicine not being reduced unless the price is less than 10 per cent. The amendment would move the relevant day from the end of the period, in respect of which the weighted average disclosed price for a listed brand is determined, to the next day. The practical effect of moving the 10 per cent test forward by one day is to preserve the 10 per cent buffer afforded in the existing arrangements to enable companies to respond to market forces.

Prior to the election, the Minister for Health said that the coalition would have liked to have consulted with the pharmacy industry rather than it being just dropped on them with no consultation. But, as we are now in government and fully understand the true extent of the mess and shambles that those opposite have left us, we need to continue to pursue a direction that will assist us to deliver a sustainable PBS into the future and to provide funding for new medicines that are coming on. I thank the Minister for Health for the time he took last week to come to my electorate of Forde and meet with some of my local pharmacists and hear their concerns.

One of the issues with these changes is that it does not take into account in any way the changes that have occurred to the business model for our community pharmacists. It does not take into account the fact that, for some of our community pharmacists, rents have increased by 40 per cent over the past few years. There is no compensation for pharmacists for the loss of expensive medicines that are past their use-by date. One of our local community pharmacies, the local Amcal pharmacist in the Logan Hyperdome, is doing a tremendous amount of work with our local community to try to prevent people from getting ill in the first place. They charge just $20 for a health assessment which for some people could take several hours to complete.

Our pharmacists are keen to work on preventative health measures because they fully understand that preventative health is one of the best ways to achieve significant savings in our health budget costs and it provides enormous cost benefits for the community and the health system. Our constituents highly value their local pharmacies not only for the advice and the supply of medications but for blood pressure checks and many other things that our constituents go into their pharmacies for. Sometimes they go in just for a chat because of the relationship that they have built up with the pharmacist over many, many years. I was heartened with the comments made by the Minister for Health that we will continue to work with our community pharmacies to see how we can utilise their skills, talents and capabilities, not only to allow them to continue to build and grow their businesses but also to use those skills to provide additional services that can further help our local communities.

As I touched on earlier, we are in this position because we face a situation where those opposite have left a legacy of debt and deficit. The coalition are seeking to clean up the mess that they have left. In contrast to those opposite, we will work with our community organisations, we will work with our community pharmacies, to ensure that we continue to support them and we will work with them to make the changes that we need to ensure that our pharmaceutical benefits system, and our health system more broadly, is sustainable for the long-term future of everybody in this country.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

I rise in support of the National Health Amendment (Simplified Price Disclosure) Bill 2013 and the second reading amendment. The bill seeks to implement changes that Labor announced in August this year to reduce the price disclosure cycle within the Pharmaceutical Benefits Scheme from 18 months to 12 months. This means that the price the government pays for PBS listed medicines will be discounted at least six months sooner than under the current system, and this translates into projected savings of around $835 million over the next three years. This is vital if we are to have a well-funded health system, because every dollar that we can save in this area can be spent on the broader health costs. We know that health costs are increasing and they are increasing faster than other costs in the economy. That is why it is vital that we take this action.

The savings that accrue through this bill are not just limited to the government. The price at the counter for some medicines will also come down, meaning a direct savings for consumers as well. In my electorate of Charlton this is vital because there are a lot of consumers who spend a lot of money on medicine. Labor sought to implement this change to provide better value for money for all Australians by improving the efficiency and sustainability of the PBS. Seniors, people with disability and people living with acute and chronic conditions depend on the responsible management of the PBS to ensure ongoing access to essential and affordable medicines.

Labor support this bill because it makes sense. We support the second reading amendment. It makes sense to seek the best value for taxpayer investment. It makes sense because these savings that will be made will not contribute to a reduction in supply or a reduction in access or a reduction in services. It makes sense because the reduction in the amount that the government pays for a PBS listed medicine will not contribute to an increased co-payment for consumers at the counter. It makes sense because the taxpayer will simply be paying less for exactly the same outcome.

As I have said before, this bill is important because it will save money that can be reinvested in the PBS to increase the number of listed medicines. I note that the Minister for Health's second reading speech to the House on this acknowledged that the projected savings from the bill are already factored into the forward estimates for the PBS and the Repatriation Pharmaceutical Benefits Scheme. I commend the minister's promise that these savings 'will assist the listing of new and innovative high-cost medicines on the PBS'. Labor agrees with the Minister for Health that savings from this bill need to be reinvested in the PBS and not redirected into government coffers. I can assure the minister that Labor will be watching with interest to see exactly what he does with these savings and we will hold him to account for this commitment. Unfortunately, I do not have much faith because already this government's track record on health leaves much to be desired.

Labor, on the other hand, had a proud record in government in investing in health care. It is a legacy that we are very proud of. The Rudd-Gillard Labor government invested more in health care than any other government. Under Labor, bulk-billing rates for GP services reached historic highs and visits to GPs were 82 per cent bulk-billed. When the Prime Minister was health minister, this figure was only 67 per cent. Labor's record on health is in stark contrast to the approach of the coalition. When the Prime Minister was health minister during the Howard government, he cut $1 billion from hospital funding. Just three months into the new government, we are already seeing significant cuts to the health budget, despite the coalition repeatedly promising before the election that the health budget would not be cut.

On 22 August, the Prime Minister, when he was opposition leader, declared: 'What we intend to do is maintain existing levels of health funding.' Unfortunately, this has already been shown to be another broken promise. The coalition's shameful cuts already include: abolishing the Alcohol and Other Drugs Council, which has been providing advice to governments for nearly 50 years—the former Liberal member of parliament Dr Mal Washer, who is held in very high repute on both sides of this chamber, described this decision as 'a devastating blow', and this is despite the fact that the Prime Minister sent a letter to the council acknowledging their fine effort; abolishing the expert panel on infant formula, despite Australia's commitment to the World Health Organization code on this; and backflipping on their commitment that they will not close any Medicare Locals, despite a pledge during the election campaign that they would not go through this important program, but we are already seeing some really disturbing signs.

The chief of the Australian Healthcare and Hospitals Association, Alison Verhoeven, has said that the government's review of the Medicare Local network 'is leaving patients, families and health service staff in limbo'. This is very concerning. The GP Access After Hours service is also an important part of the healthcare system that I am quite worried about. It is part of the Hunter Medicare Local in my area and provides a really valuable contribution to health care in the Hunter region. It is absolutely shameful that these services are now under threat from the coalition.

As an aside, my mother-in-law had reason to use the GP Access After Hours service only a few days ago at Belmont Hospital, in my good friend the member for Shortland's electorate.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

A great hospital.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

A great hospital and a great service. She made a phone call and within 15 minutes on a busy Tuesday night she was seeing a GP. These are services that are at risk if the coalition break their commitments around healthcare funding that this bill goes to. Unfortunately, the cuts that we are already seeing directly contradict the Prime Minister's pre-election commitment. This is a clear example yet again of the government saying one thing in opposition and doing exactly the opposite in government.

It should come as no surprise to people who have seen the coalition government's performance in health in other areas. They are a party that opposed Medibank when Prime Minister Whitlam introduced it. They are a party that opposed Medicare when the Hawke-Keating government reintroduced it. In fact, as recently as 1993 they took to an election the position of abolishing Medicare. We have also seen very recently state Liberal governments taking the axe to health care. For example, the O'Farrell Liberal government in New South Wales has cut almost $3 billion in health funding, decimating health services across New South Wales. This is the standard practice of the Liberal government and I am fearful as to what will happen out of the government's commission of audit.

I will comment on the O'Farrell government a bit longer. This is a government that has cut health to the bone. Even when it made commitments to fund hospitals appropriately, it failed. My wife is an anaesthetic nurse and they fought very hard to get improved patient-to-nurse ratios in their hospitals. Even when they won that through the industrial award process, the government has still been incredibly tardy in actually delivering on that commitment. I fear that this could be replicated in the federal Liberal government's approach to health care.

I would like to note that the Minister for Health has failed to guarantee that cuts will not be made to Medicare Locals, cancer centres or medical research, and it is apparent that some cuts to the PBS are now also being considered. As well as these initial cuts, it has also been revealed that hundreds of Department of Health staff have been relocated to a 'business service centre' as of 1 December while they wait for projects to be identified as priorities by the Minister for Health. This is a complete waste of resources and is of great concern.

This government's commitment to health care can also be seriously questioned on the basis that the fundamentally important areas of mental health and science no longer have dedicated ministers. I applaud the efforts of previous ministers for mental health, such as the member for Port Adelaide, who did sterling work in the last government.

In my own area of the Hunter region, health care and funding for hospitals is of vital importance. The John Hunter Hospital, which is the only trauma hospital between Sydney and Brisbane, is located in my electorate. Hunter New England Health is the largest employer in the area and Labor invested nearly $50 million in the Hunter Medical Research Institute, which is doing great work in the Hunter area—teaming up with John Hunter Hospital and the University of Newcastle. In Charlton, Labor invested $2½ million in clinical skills training at the John Hunter Hospital, as well as $2.5 million in the GP superclinic at Morisset—which, despite the campaign being run by the Minister for Health, has been open for many years and is doing great work down in the Morisset-Southlakes area. In fact I am told that the GP superclinic down there sees more patients per day than the emergency department of Wyong Hospital, which is a quite significant nearby hospital. There was also $850,000 in funding provided for primary care infrastructure for GPs.

However, there remain significant health challenges in the Hunter. A recent National Health Performance Authority report revealed that 70 per cent of adults in the Hunter region are now overweight or obese—the second highest rate in New South Wales. A recent report by the Hunter Valley Research Foundation indicates that 44 per cent of Hunter residents have a medical condition, disease, impairment or disability that has been diagnosed by a doctor or health professional and has lasted for more than six months.

So reforms to the PBS, as embodied in this bill, are very important. What is vital is that the savings which accrue from this change are reinvested in the health portfolio, because areas like the Hunter Valley desperately need additional health funding. In Charlton alone, there are nearly 8,000 people with diabetes. According to Diabetes Australia, there are an estimated 14,000 people with prediabetes and at high risk of developing type 2 diabetes in the next 5 years. The electorate of Charlton has a combination of a significant population over the age of 60 and new residential areas that will see an increase in young families. All of these areas and all of these people are vulnerable to any cuts in health funding. That is why it is vital that the savings from the measures in this bill are reinvested in health.

I am proud to be a Labor member of parliament. We are the party of Medicare, we are the party of Medicare Locals and we are the party of the PBS. I am really proud of our record in government and I am really committed, along with the rest of the Hunter team and the rest of the Labor team, to hold the government to account over the reinvestment of the savings associated with this bill. I commend the bill to the House along with the amendment we have moved. It is just so important that we keep fighting for adequate health funding.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I commend the member for Charlton on his fine contribution to this debate on the National Health Amendment (Simplified Price Disclosure) Bill 2013 and for highlighting all the important issues in health—particularly the important issues in the Hunter region, part of which is in my electorate of Shortland. We share similar concerns about health in our area and are making sure that the people of our region get the health services they deserve.

I will start by acknowledging the achievements of the last government in the area of health. In government, Labor changed the face of health by implementing the National Health Reform Agreement, which was designed to put $20 billion into hospitals over 10 years. Labor has a proud record in health. We trained more doctors and nurses. We introduced the Dental Health Reform Package. I mention here that the minister opposed the ending of the Chronic Disease Dental Scheme. I am wondering whether, now that he is government, he wants to re-introduce that scheme. I am asking him to make a commitment to the Dental Health Reform Package, because it is a package that is set to give Australians a level of certainty about the delivery of dental health services that we never had under the Howard government.

We have established Medicare Locals and they have done phenomenal work. In my area, I am covered by two Medicare Locals—the Central Coast Medicare Local and the Hunter Medicare Local. They are at the forefront of everything that happens in the health area in their respective regions. During the recent bushfires in my electorate, the Medicare Local was at the forefront of providing support and help to people who had been isolated and could not return to their homes.

Under Labor, we had a record bulk-billing rate. It was up over 80 per cent. During the Howard years, under 60 per cent of services in the Shortland electorate—an older electorate, an electorate with a fairly low income base—were being bulk billed. As well as the dental reform package I mentioned, Labor introduced the Grow Up Smiling program, a fantastic program. It means that young kids will have their dental health looked after from the time they are two until they are teenagers. Once again, I call on the minister to give us a promise that he will not walk away from that program.

As I mentioned, there are now more GPs and nurses in training than there were under the Howard government. The superclinics, which my colleague the member for Charlton mentioned, have been really well accepted in many areas. Those on the other side like to pull out the odd example of where they are not up and running, but in most areas they are up and running and are greatly appreciated by the local community. We had a package of $3.7 billion for aged care services, and now we do not even have a minister for aged care. And the Standing Committee on Health and Ageing has had ageing taken out of it, so now it is only the health committee. To me, that shows that this government has no real long-term commitment to some very important health areas.

When Labor came to power in 2007 we were faced with a health system that was in crisis. That was highlighted in The blame gamea report of the House of Representatives Standing Committee on Health and Ageing, which made 29 recommendations and was the blueprint for Labor's reform agenda. I will not go through all the recommendations, but the essence of them was that Australia needed to develop a national health agenda.

Alan Tudge (Aston, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Madam Deputy Speaker, I seek to intervene so I can ask the member a question.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Does the honourable member accept the intervention?

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I am tempted to, Madam Deputy Speaker, but I need to get through a lot of information. I would be comfortable accepting his question but in this case I would prefer to continue with my contribution to the debate. The first recommendation of The blame game was to develop and adopt a national health agenda and identify policies, planning principles and initiatives. There were 29 recommendations in this report, and most of them have been implemented. But this government should remember that first recommendation, in particular. What is their policy in the area of health? What is their agenda? What do they intend to do? So far, all I have seen have been cuts, cuts and more cuts. I think that may be the health agenda of this Abbott government. I know that at an earlier time the Prime Minister was health minister, and I had always questioned his commitment to health. Now we have a health minister that is only about cuts. He says one thing before the election, particularly in relation to the legislation now before the House, and another thing after the election.

There was an enormous investment in health in the Shortland electorate under the previous government. Through the Primary Care Infrastructure Grants program we invested $500,000 in the Jewells Medical Centre, $150,000 in the Charlestown Family Medical Service, $50,000 in the Lake Macquarie Medical Centre in Belmont, $265,050 in the Wallarah Bay Medical Centre and $150,000 in Aardmann Medical Services, Windale. These grants assisted many health care centres, which in turn have provided great support to local communities. I mentioned earlier the Hunter Medicare Local. It employs 125 front-line healthcare staff and has spent $12.94 million in establishment and operational funding and $11.5 million to support the provision of local face-to-face after-hours primary healthcare services—and that is the GP Access that the member for Charlton talked about. That service has been well utilised by families throughout the Hunter for many years. It is a fantastic service. The Hunter Urban Division of General Practice introduced it, and that was groundbreaking. It is a service that I think is the envy of every area health service in Australia.

There has been money to raise awareness through eHealth, and there has been a great deal of investment in Medicare Locals both in the Hunter and on the Central Coast. Under the Australian General Practice Training Program there have been eight new GP places based at the Glover Street Medical Service in Belmont, the After Hours Medical Service in Charlestown, Aardmann Medical Services in Windale, the Charlestown Family Medical Service and the Smith Street Medical Service. At Belmont hospital, $18.95 million has been invested in hospital services, with subacute beds funding providing 16 rehab beds, and another $380,000 has gone towards providing support for elective surgery services. These are fantastic investments in health in my local area—investments that the Howard government did not make. They ignored areas like Shortland. We had a chronic shortage of GPs, we had very low bulk-billing rates and we had people having to decide whether or not they could afford to get the medicines they were prescribed, even with the strong PBS system that we have in place.

What is the vision for health of the current Minister for Health and the government? I cannot see their vision. I see a government that is keen to cut, is keen to save money; a government that has ripped $100 million out of the Royal Victorian Eye and Ear Hospital and abolished the Alcohol and Other Drugs Council. As my colleague has already mentioned, Dr Mal Washer, a former member of this House, is absolutely horrified that the government has so little insight that it does not understand the important role that this council played in the delivery of health services and ensuring good health care for Australians. What is happening with the wonderful Medicare Locals that I mentioned? They were going, and then the government were keeping them, and now they cannot quite make up their mind whether or not the Medicare Locals will stay. In regard to the abolition of the expert panel on the marketing of infant formula, I refer back to another report of the then Standing Committee on Health and Ageing that we undertook in the 41st Parliament. As a result of that report, Breast is best, it was recommended that we really had to make sure that we had an expert panel to look at the marketing of infant formula. They are turning back the clock.

When we come to this particular piece of legislation, first I will say that the PBS has served Australia well since 1948. It is the envy of the world. It is a great system. It delivers subsidised medicines to all Australians. If a medicine is to be listed, then the drug companies have to justify the listing of that medication. When it finally goes onto the market, all Australians know that it is a safe medicine and that it is being delivered to them at a cheap price. This particular piece of legislation will reduce the amount of time taken by the government to pay reduced prices for certain drugs. The price disclosure arrangements ensure that the amount the government pays to subsidise drugs reflects the market price of the drugs, and there are several price disclosure cycles within one year.

I have met with community pharmacies within my electorate. I acknowledge the concerns that they have expressed, and I intend to work very closely with them. I also acknowledge the fact that before the election the minister ran a scare campaign on this particular issue. He was arguing that this should not take place. After the election, it is one of the first pieces of legislation that we are considering within the parliament. It is expected to save $835 million over three years. Once again, we are hearing about the savings, we are hearing about the cuts, but we are not hearing about any positive initiatives that this government has in the area of health. I think the minister promised $35 million for research into type I diabetes, but there is nothing on the table after the election. In the summing up on this legislation, I would like the minister to give an absolute guarantee to this House that the savings that this legislation will deliver to the government will be reinvested back into the Health portfolio. Australians demand nothing less. This is about health care, this is about ensuring that Australians can get cheaper drugs, and it is about maintaining our wonderful health care system rather than just cut, cut, cut as this government seems intent on doing.

Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I rise to speak on the National Health Amendment (Simplified Price Disclosure) Bill 2013 and the amendments moved by the shadow minister for Health. The bill before the House makes changes to the National Health Act 1953 to streamline the operations of the current price disclosure arrangements within the operation of the PBS. This measure is about ensuring that governments, who set the wholesale price for PBS listed medications, are able to factor in discounts given to pharmacies from pharmaceutical companies and, therefore, are able to adjust this wholesale price to reflect the true aggregate market price in a more timely fashion. In particular, the bill reduces the length of time of price disclosure to government by pharmaceutical companies from 18 to 12 months, allowing the government to change the wholesale price it sets to reflect the market price more quickly. The bill also ensure that there is only one ongoing price disclosure cycle, as opposed to the current arrangement of having three cycles per year. In addition, the bill also decreases the number of price reduction days from three to two and retains the current arrangements which prevent the government reducing the price of a medication on the PBS unless the weighted average price is at least 10 per cent lower than the PBS price. This measure is important, and it does provide value for consumers, for taxpayers and, indeed, for government.

This bill implements a change that the former Labor government announced in August this year. I must say that, at the time when Labor announced this policy, we heard veiled criticism from the opposition about this measure. In particular, there were comments made suggesting that this change was being made too quickly and that it should not be implemented because it changed the formal community pharmacy agreement. However, now they are in government, the coalition have quickly changed their tune, wasting no time implementing Labor's announcement though this legislation. Indeed, we are in the third sitting week of the new parliament, and it seems now that the coalition government is very keen to adopt Labor's policy as quickly as possible.

I do recognise that some stakeholders, in particular community pharmacies, are concerned by this measure. I would like to put on the record the great job that community pharmacies do around the country and, indeed, in my electorate. But this is an important saving measure for government. It provides over $830 million over four years, not to mention savings for consumers as well. It is Labor's view that these saving are important and that this provides an incredibly good opportunity to reinvest them back into the health care system. That is why we have moved the amendment that savings made through the PBS system go back into health. This amendment will ensure that the tradition started under the previous Labor government whereby savings made as a result of price disclosure are reinvested back into health will continue. Indeed, the previous Labor government invested $1.9 billion of savings from price disclosure to make investments in a range of important infrastructure initiatives in the health area, including the integrated cancer centres.

We are also moving this amendment to protect the Commonwealth's investment in health, because it is currently under threat from the new government. The Minister for Health has not really been able to articulate any coherent vision for his portfolio, other than to find savings for the Prime Minister and to sneak through cuts to health services and programs.

Every Australian should be concerned about what the government intends to do in the health area. As we know, despite promising not to touch money in the health area, it has already axed a number of key projects and programs and flagged more cuts. This is another example—one of many examples we are now seeing—where this government says one thing before an election and does something else after the election.

We know they have ripped $100 million out of the Royal Victorian Eye and Ear Hospital, which provides over 90 per cent of the state's specialist eye surgery. It is a cruel blow to patients and the hospital, which has been providing services to Victorians for over 150 years.

The government has abolished the Alcohol and Other Drugs Council, a body that has existed for almost 50 years and has been giving advice to governments since the Menzies government. It has abolished the expert panel on the marketing of infant formula because this government seems uninterested in getting accurate information about significant health policy. It has indicated $35 million of cuts for the Diabetes Research Foundation and now is providing clear evidence that it will backflip and cut Medicare Locals.

I am particularly concerned about the agenda to cut Medicare Locals. This would be a significant backwards step—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Member for Kingston, the member for Aston is seeking the call.

Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

They obviously do not want to hear about their cuts.

Alan Tudge (Aston, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Deputy Speaker, I am just wondering if the shadow parliamentary secretary for health would be able to comment on why they cut $107 million from the Victorian health budget retrospectively in 2012.

Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I am not willing to take that question. I am talking about the cuts that your government is currently making. Do not try and make this into some ridiculous thing. We invested money into health. Let me continue talking about the cuts that you have made and particularly my concern about Medicare Locals.

I was very pleased to attend the recent AGM of the Southern Adelaide-Fleurieu-Kangaroo Island Medicare Local. It is a great example of what Medicare Locals are achieving round the country. The Southern Adelaide-Fleurieu-Kangaroo Island Medicare Local has offered more than 20,000 clinical services in the last year. I would just like to run through some of these figures—and I am very pleased that the Minister for Health is in the chamber now, because he can pay attention to the great job that the Southern Adelaide-Fleurieu-Kangaroo Island Medicare Local is doing. Of those 20,000 clinical services, 7,829 occasions of service were in mental health and 893 individuals were assessed through the headspace program. Child immunisation rates have been maintained at 90 per cent in the region, thanks to the work of the Medicare Local office. The Medicare Local has supported 40 general practitioners to achieve accreditation, increasing the availability of health services to people in southern Adelaide. It has provided 551 services under the Aboriginal and Torres Strait Islander health program.

Over 800 patients were attended to in one year in nursing homes, ensuring that people were prevented from going into hospital. This is a particularly important element of the Medicare Locals which should not be ignored: the role that they play in ensuring that patients do not end up in hospital. This is good for individual patients, and it is also incredibly important for the costs of the hospital system. This is important primary health care.

I am also pleased that the Minister for Health is in the chamber now, because, hopefully, he can answer my question. I have written to him about whether or not he will honour the $15 million to the neonatal unit at the Flinders Medical Centre. I wrote to him close to two months ago. I have not had a response from the Minister for Health yet about whether or not that $15 million will be honoured. The neonatal unit is an incredibly important unit in the Flinders Medical Centre. It provides services for not just the local area but right across South Australia. Indeed, when I visited the hospital, it was providing services to country Victorians as well. It is a really important service that allows people who have unfortunately had a premature baby to spend time with their baby and get the best possible medical attention, and there is also space for families to ensure that that connection continues. So it is really, really concerning that I have not had an answer yet from the Minister for Health, and I really hope that this funding does not end up being ripped away in the same way that the government has ripped away the $100 million from the Royal Victorian Eye and Ear Hospital.

But, of course, it is not just the things that they have already cut; the government have flagged that they will cut or abolish many, many things. Their 'commission of cuts' is already affecting agencies and their abilities to deliver vital programs. Who would have thought that the government's commission of cuts would look at targeting funding to promote organ and tissue donation? But hundreds of community groups are now being left in the dark about whether their funding applications will be honoured—especially with DonateLife Week coming up in February. It is concerning that this funding has been frozen, and there seems to be absolutely no answer about what will happen and when this money will be released.

Money in Health Workforce Australia has also been frozen. This will affect students because the money, especially as part of the clinical placements program, goes towards supporting universities and health services to provide clinical placements for students. There is no doubt that we need to make sure we are providing that opportunity for placements for students to get the experience so that they can enter our workforce. Developing our health workforce is one of the critical challenges into the future. The doctors, the nurses and the allied health workers are all critically important. Freezing money for clinical placements is very concerning as we approach the new academic year. How will we be able to do this?

As I stated earlier, there are real concerns about cuts in the Health portfolio. Only the Labor Party has a good track record in investing in and reforming our healthcare sector. That is why we continued to invest in health care. That is why the amendment that the opposition has put forward is so critically important. It ensures that the money that is part of this saving cannot be cut and put somewhere else or be stashed in the government coffers. It says that it is important that it is reinvested into health and ensures that we can slow the cuts that continue to come from this government. Hopefully the reinvestment of this money, through the opposition's amendment, will ensure that the government will continue to spend in Health. I commend the opposition's amendment to the House and hope that the House adopts it.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to support the amendment that is before us. It is so critically important that the savings that are made through this proposal stay in the Health portfolio. This bill, as we have heard from previous speakers, implements a Labor announcement—a change that we put forward last August—to reduce the time for price disclosure from 18 months to 12 months. This bill therefore reduces the time between when a company advises the price reduction of a drug and when the government starts to pay the reduced amount. Knowing that pharmacies are businesses and that changing the business culture may take some time, Labor, when in government, entered into a new agreement with the Pharmacy Guild of Australia to provide extra funding to the guild to pursue specific programs, called Support Patient Services. Having been to speak to a number of our own pharmacies in Bendigo, I know they have embraced the change in the way price disclosure works and they are working actively to provide better support for their patients. They, like us, believe there is more we need to do in the area of primary care and they see they have a role to play in rebuilding their culture, not just as a supermarket to dispense drugs but in education to ensure we have better quality health care within our communities. I would like to mention UFS pharmacies, and there are five of them within the electorate. It may come as a surprise but they are a not-for-profit, membership-based organisation that delivers a wide range of pharmacy, health and optical products and services. When I met with them about this issue, they said it was critical that they were not undercut by what they called the MacDonald's of the industry—chemist supermarkets with their bright yellow signs.

As part of these reforms, $1.9 billion will be saved and that saving should stay in the health budget. The key question for the government now is: where will these savings go? In government Labor was committed to making sure that these stayed in the Health portfolio and that we got better outcomes in the Health portfolio. In my own electorate of Bendigo, Labor invested millions in health care. In the time that I have I want to give a few examples. The Bendigo and District Aboriginal Coop received $7.5 million; $2.4 million to the Heathcote Primary Care Clinic; $5 million for the Bendigo Primary Healthcare Centre, a GP Super clinic; and $6.79 million for the Kyneton Hospital project. These are just a few of the funding projects, but these involved capital works and are critical for meeting the health care needs in my electorate. Many in the House would acknowledge that in regional electorates, like mine, health care is critical. We have small towns and villages with great distances between where people live and where their health services are.

Where will the coalition deliver these new savings? It is critical that we support the amendment because those opposite do not have a good track record when it comes to investing in health. We just have to look at what previous Liberal government have done at the state and federal level. With Tony Abbott as the health minister in the Howard government, we saw bulk billing rates dip as low as 67 per cent in the Bendigo electorate and entire towns were without a bulk billing doctor. More than a billion dollars were cut from hospitals over five years. That is what happened the last time the coalition was in government. We are moving this amendment today to ensure it does not happen again. At the state level the Liberals have made savage cuts to health. They have put up a bit of a smoke screen around it, but it is there. The Bendigo hospital and the Bendigo health network have copped a massive cut of $11 million over the last two budgets. How can you tackle waiting lists? How can you meet the primary healthcare needs of a community if you cut $11 million out of the operating budget?

As a result of these cuts we have seen a loss of staff. Rather than investing in the employment of staff in areas like intensive care or emergency departments, we are seeing a reduction. There have also been cuts at the state level to the women's health services, including Women's Health Loddon Mallee. Cuts of 10 per cent are a lot for a not-for-profit organisation to lose. There have been cuts of between 20 and 30 per cent of their operating budgets to our community health services which work in partnership with their community to deliver the primary health care in areas that others do not want to touch because they are not so sexy at the moment. Included in my electorate is Bendigo Community Health, Castlemaine and District Community Health and Cobaw Health. The reason I raise these examples is to highlight the track record of the Liberal and National Parties when they get into government. Despite their constant promises before the election that there would be no cuts to health, the cuts have begun—$100 million from the Victorian Eye and Ear Hospital, the abolition of the Alcohol and Other Drugs Council of Australia and a backflip on the promise not to close any Medicare Locals.

I know within my region how critical Medicare Locals are in linking up our small towns to ensure that across the Loddon Mallee that we have a network of funding. A lot of funding is allocated from different areas for health services and it is important that services are coordinated so that we are not constantly duplicating the delivery of health services. I understand the importance of Medicare Locals to rural regions to be that link between our private clinics, our public clinics, our community health and our hospitals.

Just in case the government are not sure and do not have any ideas about how they can invest this vital funding in health care, particularly in my electorate, I have a few ideas that I would like to put out there. I mentioned earlier Castlemaine District Community Health. Castlemaine is a growing area that is in need of capital funding to co-locate all of its services. Perhaps the minister would like to fund this project. Cobaw Community Health received a grant from the previous government to co-locate with the hospital, but now it would like to bring all its services together, again delivering better outcomes in primary health care—that one-stop shop.

Another idea is to work with Bendigo Health on how to stop people ending up in the emergency room. Too often in the health debate we focus on what happens in the emergency room and not on how we stop people ending up in the emergency room. Again, I believe that pharmacies have a role to play, moving from a focus on just dispensing drugs and starting to get into the educational field. Making sure we engage with our communities and our patients on primary health care is a very important role that pharmacists can move into. That is why it is so critical that every dollar saved by price disclosure stays within the Health portfolio and within the PBS if at all possible.

We do need to ask the question: what is next? Australians need to know whether further funding cuts will be proposed by the government and where they will attack. Let us hope they will not be like their state colleagues and go directly after primary health care. We need certainty in this area and a commitment that funding will continue. I believe, as do Labor and the people in my electorate, that we need a very strong public health system that ensures that everybody receives the universal care that they deserve. Health care is central to continuing to strengthen regional communities to ensure that everybody has access to decent health care and is able to live the best life that they can. My electorate has a strong network of small hospitals, a major hospital and GP superclinics, and I would be more than happy to sit down with the minister to talk about how this funding helps them meet their primary healthcare needs.

As I said at the start, it is so important that once this bill goes through the funding stays within the Health portfolio. Labor are committed to the PBS and to ensuring that Australians get value for money, and we are committed to ensuring that every health dollar remains in the budget. I urge the new government to support our amendment and to send a loud and clear message to the community, including the people in my electorate, that they too agree that we need to keep investing in our health care and that the dollars will continue to flow.

Peter Dutton (Dickson, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I thank the previous speaker and indeed all the speakers who have contributed to this debate. Let me firstly respond to the amendment moved by the shadow minister for health. The government will not be supporting the amendment, because it is clearly a political stunt.

For the PBS to continue to provide Australians with reliable, timely and affordable access to medicines, the scheme needs to be well managed. The viability of the medicines industry, pharmacies and other suppliers in Australia is absolutely paramount to the future of our country. The National Health Amendment (Simplified Price Disclosure) Bill 2013 aims to improve the operation of PBS pricing policy. The proposed changes would reduce complexity in administering price disclosure and increase its effectiveness by allowing price reductions to occur sooner, and indeed more frequently.

The aim of the changes is not to increase the magnitude of price reductions or to reduce prices below the level they would have reached under the current process; it is simply to allow PBS prices to be adjusted more quickly. Price disclosure is an established part of supplying and dispensing medicines under the PBS. Adopting a more uniform and responsive approach under simplified price disclosure would deliver savings for consumers via decreased prescription costs, would reduce PBS expenditure for taxpayers and would assist with listing of new medicines.

The PBS relies on the pharmaceutical industry and pharmacies to provide high-quality products and professional services for medicines. I acknowledge that some sectors have concerns regarding the changes. However, due to the fiscal circumstances inherited by this government, I regret to say that these changes need to proceed.

While consultation prior to the announcement of the change by the former government may have been limited, this government intends to engage with business in a very different way. We will start as we mean to continue, with consultation regarding implementation so that those affected are well informed on the changes.

Sound pricing arrangements are vital to the sustainability of the PBS. These changes would help to ensure that the government does not pay higher prices than it should otherwise pay for PBS medicines. They will also provide greater confidence that multiple-brand medicines are delivering value for money for the PBS.

I thank all members who have contributed to this debate. I commend the bill to the House.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Ballarat has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.