Sarah Henderson (Victoria, Liberal Party) Share this | Hansard source

I rise to speak on the National Health Amendment (Enhancing the Pharmaceutical Benefits Scheme) Bill 2021. The government has a strong record in managing the Pharmaceutical Benefits Scheme and is making a record number of medicines available for patients. Since 2013 the government has approved close to 2,800 new or amended medicine listings on the PBS at an overall cost of around $13.9 billion.

The National Health Amendment (Enhancing the Pharmaceutical Benefits Scheme) Bill 2021 amends the National Health Act 1953 to implement reforms negotiated with the medicines industry. The amendments reflect new five-year agreements with Medicines Australia, which is the representative body for the innovative medicine sector in Australia, and the Generic Biosimilar Medicines Association, which is the representative for generic and biosimilar medicine suppliers in Australia.

The new industry agreements will operate from 1 July 2022 to 30 June 2027. Through these new agreements the government and the medicines industry have co-developed a comprehensive package of reforms to the PBS. These reforms will ensure that Australians continue to gain access to new breakthrough medicines as early as possible. They will deliver a robust and uninterrupted supply of medicines needed and used every day by Australians and, very importantly, the reforms will keep the PBS on a long-term sustainable footing.

The industry agreements will achieve this by securing commitments from the medicines industry which will result in new savings from improved statutory price reductions which will be reinvested in the PBS. The reinvestment will in turn help to make headroom on the PBS for listing new medicines. What we will see is a five per cent reduction at the five-year anniversary of a drug listing on the PBS: a five per cent reduction at the 10-year anniversary of a drug listing on the PBS; and a 26.1 per cent price reduction on the 15-year anniversary of a drug listing on the PBS, which will increase to 30 per cent in 2027. These reforms will also ensure that there will be a greater level of stock held of commonly prescribed and older medicines in Australia which in recent years have become susceptible to global medicine shortages.

These reforms will generate net savings of approximately $1.9 billion over the terms of the agreements, with an expected investment of approximately $5 billion in PBS medicine listings over the life of the agreement through the PBS New Medicines Funding Guarantee and the reinvestment of efficiencies agreed with the sector. These reforms also target Commonwealth investment towards securing the supply of commonly prescribed lower priced medicines that have lower margins and are often in short supply globally. Increasingly, global shortages are interrupting the supply of medicines that are the mainstay of treatment for some of the most prevalent health conditions in the Australian community.

In 2019 and 2020, brands of over 500 PBS items were affected by medium- to critical-impact shortages, with brands supplied by manufacturers for $4 or less most susceptible. This includes medicines for common health conditions such as high blood pressure and diabetes, and medicines for mental health conditions such as depression, bipolar disorder and schizophrenia. These reforms, as agreed with the medicines industry, will ensure that manufacturers are better placed to compete for supply of these medicines in the global medicine market and hold greater reserve supplies of at least four to six months of stock in Australia to buffer the Australian market when interruptions do occur. From 1 July 2023 additional stocks will be held for over 600 PBS items, including most brands that have an approved X manufacturer price of $4 or less.

These reforms are critical to ensuring the continuity of access that is so important to the proper treatment and management of common medical conditions. Overall, and on average, patients will benefit and save from the reforms through improved supply chain security for a larger number of lower cost pharmaceutical items on the PBS, including for diabetes, epilepsy, arthritis and asthma. Patients will also benefit through reduced costs associated with lowered brand premiums. There will be no increased cost to concession card holders, who will continue to pay a maximum of just $6.60 per script. The agreements with the medicines industry strike a balance between affordable access for Australians; a PBS that is sustainable over the long term, providing the Australian medicines industry the right conditions for it to thrive, launch new and innovative medical treatments in Australia, and a reliable supply. I commend this bill to the Senate.