Rachel Siewert (WA, Australian Greens) Share this | Hansard source

The National Health Amendment (Pharmaceutical and Other Benefits—Cost Recovery) Bill 2008 seeks to amend the National Health Act 1953 to allow the recovery of costs incurred by the process of listing medicines on the Pharmaceutical Benefits Scheme, commonly known as the PBS. The Australian Greens have a long history in this chamber of defending the public health system and its three main pillars: public hospitals, Medicare and the PBS. It is a firmly held belief of the Australian Greens that we need to enhance and protect the Pharmaceutical Benefits Scheme. The PBS is an essential pillar of the public health system, and it must remain viable so that it continues to deliver to the community the drugs and medicines that we require to maintain our health, to treat serious disease and to reduce suffering. These drugs must be accessible to all in the community who need them.

The Australian Greens also wish to see the ongoing independence of the Pharmaceutical Benefits Advisory Committee, commonly known as the PABC, and we believe it must be able to operate in a transparent way that inspires confidence in its integrity. We therefore frame our concerns regarding this move towards cost recovery measures in the context of our commitment to the public health system and the guaranteed availability on the PBS of listed drugs to people who need them. The Australian Greens commitment to preserve and enhance our public health system and to guarantee the necessary medicines are listed on the PBS and are available to those who need them is fundamental to our approach on measures that affect the public health system. Our evaluation of these measures and the concerns we express about the implementation of this scheme are firmly grounded in these key objectives.

Treasury spending projections indicate that the cost of the PBS will grow over the next 40 years to become the single greatest item of health expenditure. That was articulated in the Intergenerational report of 2007. The people of Australia have every right, therefore, to know and expect that the money is being spent wisely and to the benefit of those who need those items. Any change that may impact on the viability and the integrity of the PBS must therefore, we believe, be very carefully considered. As the Minister for Health and Ageing explained in her second reading speech on 29 May this year, gaining a listing on the PBS delivers a high degree of commercial certainty to pharmaceutical companies. According to the minister, the top 20 pharmaceutical companies in Australia each receive, on average, $223 million from each product successfully listed on the PBS scheme. The Australian Greens therefore welcome the move towards cost recovery in the case of high-volume commercial applications for drugs and medicines, believing that that is a cost of producing the drug.

However, pharmaceutical companies are also involved in developing other medicines that are less commercially successful but are of great need to our community. These drugs may be of benefit to only a small proportion of the population, often those people who are the most vulnerable in our community and those who would be least able to meet the full cost of these medicines if they were not listed on the PBS. They may be people, for example, who need a specialist drug in palliative care. They may be Indigenous Australians, many of whom live in remote areas that do not have good access to ongoing medical care and need their medicine delivered in different forms. Or they may be children suffering from rare forms of cancer. These drugs are specialist drugs and are only made in low volumes. We do not want to put those people’s health and wellbeing at risk, and we expect our government to make sure that they are not put at risk by the move towards cost recovery.

The Senate Community Affairs Committee inquiry into the bill heard evidence from Palliative Care Australia, who were understandably concerned for the people they represent. Their submission stated, in part:

Palliative medicines, and palliative care, have some important differences from many other medicines and types of health care, in that their purpose is fundamentally not to seek a cure, but to seek relief from pain and other symptoms associated with terminal conditions.

The Australian Greens want to be, and through the inquiry process sought to be, reassured that the development and availability of drugs such as these are not put at risk by the imposition of application fees. To this end, the Australian Greens support an approach to cost recovery that recovers costs from profitable pharmaceuticals but protects the availability of those less commercial medicines that are of great need to the community—in other words, those highly specialised, low-volume and, we acknowledge, sometimes very high cost medicines. We still think that they should be made available.

The Greens sought to scrutinise this legislation so that we could be reassured that these measures were in fact in place. Unfortunately, as Senator Colbeck has articulated, from the time of the inquiry up until only last Friday—six days ago—the draft regulations were not available. Committee members sought availability of those draft regulations through the inquiry process and they were made available on Friday afternoon. Therefore, the industry, the committee and the broader community did not have time to properly read those regulations. I acknowledge the fact that the minister subsequently provided a briefing on the draft regulations and I thank the minister.

It became apparent when we were reading those draft regulations that if you were knowledgeable and understood the dialogue and previous history then you could probably read the regulations. However, even some people in the industry had some misinterpretations of the draft regulations. So the Greens will seek from the government reassurance on record about some of the interpretations of those draft regulations. I understand that the explanatory memorandum or explanatory material that goes with the draft regulations is not available. That causes the Greens concern because if we pass this legislation only on an understanding that we have been given on the draft regulations, how are we to be reassured that in fact that will be what happens?

So we are seeking on record an interpretation of those draft regulations. For example, what does ‘substantive change’ mean in the draft regulations? This is a fundamental point in respect of drugs that are being put in for assessment through this process. What do ‘major change’ and ‘minor change’ mean? We are told, and I have no reason to doubt the department, that they are clearly understood by the industry. It sounds as if they are not clearly understood by some players in the industry, and they are certainly not clearly understood by community members. So we would like to be reassured as to what a major change and a minor change are, and we seek that on the public record.

As with much legislation in this place, and increasingly so, the trend is for details of legislation to be encompassed in the draft regulations. Unfortunately, as happened in this case, most of those draft regulations are not available for us to comment on at the time we were dealing with the legislation. I think it is a fundamental flaw in the legislative process that so much is now done by regulation and the legislators do not get to see the draft regulations. It was impossible to judge through the committee inquiry process on this legislation whether the issues that were raised and the issues that senators had with the bill were legitimate or whether the concerns were in effect unfounded.

The reason bills are referred to committees is so that we senators can look at them and see if there are unintended consequences and if they actually deliver the policy outcomes that the government is saying they are trying to deliver. How can we do our job properly as senators and as committees of inquiry—I have articulated this issue before—if we do not have all the information available? It also makes it a waste of time. Many people are now very deeply concerned about some of the implications of this bill. We are told that they are unfounded concerns; we have all been ‘getting our knickers a knot’, as they say, around some of these changes. The concerns could quite easily have been resolved if we had had the draft regulations at the time. We would potentially have been much further along in this debate and we could have dealt with the legislation in a much more expeditious manner.

The Greens were, as I have said, very concerned that the draft regulations were not available to the committee inquiry. As the majority report stated:

... in the absence of the regulations which contain the detail of the implementation and operation of the cost recovery arrangements, it has been difficult to appropriately assess the possible implications of the legislation.

As I have said, we do not believe this is good practice. As legislators we need to be assured that legislation is doing what it is supposed to do and not have unintended consequences. Fortunately, the regulations were provided, but only six days ago; not even a week. I hate to point that out to Senator Colbeck but it has not been quite a week since we saw the draft regulations. We have since heard, and I hope that this will be clarified during the ongoing debate, that the regulations are now to be made available for public consultation. I understand it was originally to be for two weeks but I think it is now to be for four weeks of consultation with the appropriate stakeholders, which is a very significant step in the right direction. This is an improvement, but it still means that in this place we are yet to be reassured publicly and on record that our concerns have been met.

I appreciate the fact that the government has given reassurances that orphan drugs and lifesaving drugs will not be affected by the move towards cost recovery. Orphan drugs are extremely low-volume, highly specialised drugs and are already protected by the TGA process. However, we are seeking to clarify the availability of some of the non-orphan drugs. These are particular drugs that do not automatically achieve orphan status but whose economic viability may be threatened by the imposition of application fees because they are being used for other purposes that are not necessarily those for which they were originally listed. They are subsequently used for other purposes and are extremely important, as I have said, for palliative care, rare cancers and those sorts of things. We are seeking to be reassured that those drugs will have protections under the draft regulations. Their use might benefit only a small population and at low volume, so they may not be commercially viable in that particular formulation or that particular use. The problem arises when these drugs are required to go through a second listing process when another use for these drugs is found.

Under these circumstances, while it is clearly in the interests of a small number of patients for the drugs to be listed, it might not be of commercial interest for pharmaceutical companies to go through this next process. So we are seeking a commitment from government that these drugs will also be covered under the regulations if this legislation is to pass prior to those regulations being finalised. I understand that the instrument is a disallowable instrument but, as I think Senator Colbeck also articulated, it is not amendable by this place. We can either disallow a regulation or let it go through. That is a very blunt instrument. I would prefer to see that the regulations were right from the start. Therefore, we are seeking reassurance from the government that these drugs will be protected. We need to be reassured about definitions of substantive change. While I understand the process, some in the community do not. We seek reassurance that there is a proper definition for what are major and minor changes, and that these particular types of drugs will be protected.

One of the other issues that came up during the committee process was the independence of the PBAC. We mentioned that in our minority report on this bill. We are reassured that there is a separation from the department in this process in terms of the independence of the PBAC. We would like to make sure that that is protected in the future. We have circulated an amendment in the chamber because we think that these changes could have some implications for the costs of drugs, which was raised during the committee inquiry. We are proposing that there be a review of this new process on the second anniversary of these changes and that review would look at the impact of the implementation of the cost recovery measures.

There are a number of issues listed that we think should be reviewed. We want to make sure that the cost recovery measures that are implemented are not having an adverse impact on the less commercially viable non-orphan drugs. We seek to make sure that in fact the cost recovery measures are not having an impact on the costs of medicines. That was raised in the committee. The department and the government say that it is not going to have an impact. We think that we need to review that to make sure that it is not having an impact into the future. We would also like to get the review to ensure the continued integrity and transparency of the PBAC. We also want to allow the community to have input into that review.

I will reiterate our concerns to ensure that the non-orphan, low-volume, high-cost drugs that are needed for specialist conditions are protected. We seek that assurance from government. We also seek a commitment from government to review this process in two years time to ensure that the policy outcomes the government desires to see from this legislation are achieved with no negative impact on the PBS or on those sections of our community that are the most vulnerable and need these low-volume, high-cost drugs. We need to ensure that they have been adequately protected by this legislation. If the government is confident that this legislation will do that, I do not see any reason why it would not support such a review to ensure confidence in the PBS, which every Australian places such a high value on.