Claire Moore (Queensland, Australian Labor Party) Share this | Hansard source

This is a threshold issue in terms of change in legislation and it is important just to remind people about the scheme of which we are talking. There is no disagreement in this place or indeed, I think, in the community about the value of the Pharmaceutical Benefits Scheme. The committee had on evidence the honour and the respect with which the Pharmaceutical Benefits Scheme is treated by the industry, by the people who are using the system, by the pharmaceutical industry itself, by the health system and also by a number of people who are consumers. We heard valuable evidence in our inquiry about just how convinced people were that the system needed to work well, how it needed to be well resourced and how there also needed to be a sense of engagement with the system. This shows us that for about the 60 years in which the Pharmaceutical Benefits Scheme has been in place it has served Australia well.

Consistently in this place over many years I have heard arguments from both sides of the chamber, in particular from the then government, about the rising costs of the Pharmaceutical Benefits Scheme, how we had to be careful and how we had to be sure that this scheme was well resourced by government. There was always some concern that the ever-increasing expenses relayed to the dynamic industry of pharmaceuticals would have some impact on the ability of the Pharmaceutical Benefits Scheme to supplement the cost for consumers.

That is a given. There is no doubt that the rising cost of the scheme over the years has been of deep concern to the government and, I believe, to governments. There has got to be some ongoing acknowledgement that the scheme itself continues to need to be reviewed closely and that there needs to be ongoing commitment from all parties involved to ensure that there is effective funding for this scheme. We know that last year over $6 billion was spent on the Pharmaceutical Benefits Scheme alone in this country and that anticipated costs into the future will grow. In a number of contributions to this debate we have heard about the marvellous scientific advances that have occurred and the growth in the capacity of medication to adapt and also to respond to the illnesses that people are working through in their lives.

Senator Boyce has just given us examples of drugs that have come onto the market in the recent past. Our committee received evidence, both in writing and at the inquiry, from a number of the large pharmaceutical companies that are members of Medicines Australia, the umbrella organisation, about the horrific—and I use this term deliberately—cost of research and development for medications. They also told us about the fact that for the few major successes in the field, of which people speak with great pride—and we in this place have heard about major successes where drugs have been researched and come on the market and provide immense benefit to people—many years of research and trials can be put into the development of drugs that do not result in a good product coming forward. But that is part of the industry.

In terms of understanding this industry, we believe that it is an industry based on research and on decisions that are made, almost on a daily basis, about effective profit margins. We are not talking about some form of charity in the pharmaceutical area. We are talking about effective and highly successful business decisions. Within that business environment, there is no doubt that the range of costs that must be contributed to ensure that a final result is received is built in. The National Health Amendment (Pharmaceutical and Other Benefits—Cost Recovery) Bill 2008, which we are considering here today, looks at inserting one level of cost into the bank of costs that must be seen by the industry as they make their daily business decisions about what they are going to do in the market. And it is not an overwhelming cost. Indeed, there will be a cost; that is what the legislation is about. No-one has run away from that. It is not a new concept. It has actually been in discussion in this country since 2005.

The previous government had on record a proposal in previous budgets to bring forward a very similar costing proposal. There were a range of discussions at the time, as the department explained to us at the inquiry, about the interaction with the industry, with consumers and with the various people who have interests in the Pharmaceutical Benefits Scheme and the National Immunisation Program. And there are a range of people who share the interest in the industry. The discussion has been going on for a couple of years and we have indications of where it occurred and what the basis of the discussions was.

It is fair to say that in 2005 the industry did not like the introduction of a costing program, and they do not like it now, because it inserts a realm of costs. But the argument that the government is putting forward is that this is part of the contribution that players in this market must make to ensure that the program continues to be strong, well resourced and effective and provides what Australians have come to believe is their right—that they will have access to the best possible medications and that they will have certainty that they are safe, that they are well tested and that their government, whatever the government of the day is, will provide effective financial support so that the cost will be supported.

We know that at the present time a large percentage of the drugs and medications available on the Pharmaceutical Benefits Scheme are directly supported by the government. We also know that patient contributions make up about $1.15 billion of what is provided. If I had the figures I would work out what that would be if there were no PBS. I am sure people will do that. We have heard in this place on a number of occasions just how much individuals are prepared to pay for medications that will provide a cure or support or alleviation of symptoms and also contribute towards having as strong and as healthy a life as they possibly can. The Pharmaceutical Benefits Scheme, which we support in Australia, gives certainty to consumers that programs are there for them. Indeed, across the world the Australian Pharmaceutical Benefits Scheme is the envy of many countries. Stories about the way it operates have actually been written up in industry papers.

One of the core things, I think, that came out of our inquiry was the strong desire that regulations be available with the legislation so that the actual detail of the costing regime would be available for everybody. I agree completely. The best possible process when we are looking at primary legislation that is supported by a range of secondary legislation and regulations is that we would have in front of us all of that information when we are making our decisions. The reality is that for the very short time of six years during which I have been in this position and working on this committee I have never seen regulations provided to any community affairs legislation or reference committee along with the primary legislation that it was considering. We have of course asked for it.

I share the opposition’s view in their strong statement in the committee report and in today’s debate about it being essential that we always have regulations or guidelines in front of us when we are looking at legislation. I support their position entirely. That unfortunately has not been their position for the last six years. I welcome their coming on board so that in future debates of this kind we will be able to say this with certainty to the departments supporting our debate and the various bodies working to develop the legislation, and to come forward with all the information we have. We will be able to say that if we as a considering committee are truly going to see the full detail of the impact of any new legislation, it would be very, very welcome to have all the regulations. When asking the department during Senate estimates and in many other committees whether or not we could see regulations at that stage of the consideration—I do not recall the number of committees but I do recall asking this in committees on which you sat, Acting Deputy President Hutchins—we were consistently told that, from the department’s point of view, it would be quite likely that the regulations would be formulated with the legislation and most particularly after the legislation is agreed so that all the details can then be put in place for implementation. With great politeness, various departmental officers have told me that they would take note of our concern and that they would see what they could do and would get back to us.

I am so pleased that we now have the regulations for consideration. It would have been better if we had had them longer; nonetheless, we are talking about people who are very skilled in this process. I hear concern from various industry groups and people from the opposition about how they would like to have more time to look at the regulations in detail and to consider them. I understand that the people who are saying this have significant resources and have the ability, the knowledge, the interest and the commitment to this system to be able to have a look at these regulations and immediately respond. With them having years of experience in working in the area, if there is something there that concerns them at this stage—and I know, having talked with the departmental officers over many years, that regulations evolve—the department will work with industry, with the government, with opposition and with anyone interested in the process to make sure that the process is as effective and as responsive as possible.

The Senate Community Affairs Committee totally agree that to have full knowledge of how this legislation will work, down to the detail of how the process will operate, it is an advantage to have the regulations, and in future it would be good to have them at the time of the committee inquiry process. But we have them now, and I have looked at the regulations and had discussion with departmental officers about the issues that were raised in general during the committee, including how various delegations would operate; how orphan drugs—which is a term that I do enjoy saying; they are the kinds of medications not linked to major pharmaceutical companies that have quite small areas of use—will be considered; how people will be able to waive fees.

The committee heard evidence from the department and from a range of experts in the field, and it was quite clear that everybody at the committee inquiry understood that this is not a one size fits all; that there would be the ability to respond to the different kinds of medication brought forward, that there would be flexibility and that there clearly would be the ability of the delegate—the trained, professional, aware delegate—to provide waivers when a case put forward listed all the things that we have heard about in debate in the last day or so. Those are all things that are a part of this business: the special need, the particular area, the overwhelming cost.

Everybody will be aware of the rules, and in fact the rules themselves have not changed. What we have is a pricing regime put into the process at this level of getting approval for pharmaceutical assistance, the PBAC process. So whilst it is an impost, it is not something of which people are ignorant. People are all too well aware of what this means. They understand where they fit into it, and now that we have had the regulations provided we will be able to see the detail of exactly how it will work, which is something that we have not seen in many other pieces of legislation.

One of the really positive elements of the committee—and it continues to astound me and make me very proud to see—is the way that our legislation engages a range of people in the discussion and how deeply they care for the process. From hearing evidence from people like Carers Australia and the palliative care association and from reading statements from people who work in Aboriginal and Islander health you become aware that they are all very involved in the process. And what they asked when they came before the committee was: would their particular need be taken into consideration during this new pricing regime? The government can say, with absolute authority: yes. People’s individual circumstances will be taken into account when they apply for any process through the PBS, exactly as is done now. A whole range of issues will be taken into account.

Whether people will get the answer that they want all the time, I cannot say; that is part of the decision-making process. But to presume that this is some uncaring, separate process which will be put in over the top and not take into account any of the issues about how this process operates now is just not accurate. That tends towards a scare campaign to get people worried about how it will work and to take the real object of the process off the agenda. The object is to ensure that our system remains well resourced and strong into the future. We hope that we will be able, through this process, to get an agreement on an element of contribution from the major pharmaceutical companies when they apply to go onto the assistance scheme. When they have gone through the process of getting their drugs approved for safety and for being able to be efficiently used and they are looking for government sponsorship so as to mitigate costs for consumers, there will be a cost involved. The details of that are in the regulations. It will operate as people put forward their applications.

The committee was made most aware of the concerns raised by the pharmaceutical area about where their future would be and also of the concerns raised by various specialist groups. In our recommendation, which is in the report, we say that the regulations should incorporate specific measures, whether through exemptions, waivers or in some other form, to ensure that there is no disincentive for companies to lodge applications to list low-volume medicines or to change or extend the indications of listed medicines. That was a clear recommendation in the majority committee report. That has been taken on board by the drafters of the regulations.

I know now that there has been an extended time for people to consider the regulations. We now need to move effectively forward so that there will be understanding and security. We have heard the word ‘security’ a number of times in the debate. It will be security for all participants in the process about exactly what their responsibilities are, what their charges will be and what their responsibilities will be in the future of medicines in this country. I was deeply concerned by the response from some of the pharmaceutical companies. They tended to say that if this charge came in they would have to seriously consider their availability and their ability to provide this service into the future. That is of concern; we have to look at business need. But we also have to look at community need, and in this debate we are looking at ensuring that safe medications are available, that we have the best possible medical research and that Australian consumers can be secure that their PBAC system is well resourced, strong and engaging for all participants.