George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

by leave—I move:

(1)    Schedule 1, item 81, page 29 (after line 3), at the end of subsection 99ACC(3), add:

Note:   The new price for the single brand of the combination item may be the same as the existing agreed price.

(2)    Schedule 1, item 81, page 29 (lines 4 to 12), omit subsection 99ACC(4), substitute:

        (4)    If the Pharmaceutical Benefits Advisory Committee gives advice to the Minister under subsection 101(4AC) in relation to the combination item, then, in working out the new price of the single brand of the combination item, the Minister may have regard to that advice in considering the extent (if any) to which to reduce the existing agreed price.

     (4A)    If:

             (a)    subsection (4) applies; and

             (b)    the Minister decides to reduce the existing agreed price;

then, in agreeing the new price of the single brand of the combination item, the Minister:

             (c)    may have regard to the advice referred to in subsection (4) in relation to the combination item; and

             (d)    must take into account, in relation to the listed component drug, or each listed component drug, that became subject to statutory price reduction:

                   (i)    the approved price to pharmacists, on the reduction day, of each brand of a pharmaceutical item that has the drug that is the listed component drug; and

                  (ii)    the quantity of the listed component drug contained in the combination item.

      (4B)    If subsection (4) does not apply, then, in agreeing the new price of the single brand of the combination item, the Minister must take into account, in relation to the listed component drug, or each listed component drug, that became subject to statutory price reduction:

             (a)    the approved price to pharmacists, on the reduction day, of each brand of a pharmaceutical item that has the drug that is the listed component drug; and

             (b)    the quantity of the listed component drug contained in the combination item.

(3)    Schedule 1, item 81, page 31 (lines 17 to 23), omit subsection 99ACD(3).

(4)    Schedule 1, item 81, page 31 (line 28), omit “reduction”, substitute “determination”.

(5)    Schedule 1, item 81, page 31 (lines 35 and 36) to page 32 (lines 1 to 5), omit subsection 99ACD(6), substitute:

        (6)    If, on a day before the determination day:

             (a)    one or more of the listed component drugs contained in the drug in the existing item had been subject to a 12.5% price reduction; and

             (b)    because of that price reduction, the approved price to pharmacists of the existing brand of the existing item was reduced;

then the reduction referred to in subsection (5) is to be adjusted to reflect:

             (c)    the extent to which the 12.5% price reduction was taken into account in working out the amount of the reduction to the approved price to pharmacists; and

             (d)    the quantity of the listed component drug contained in the drug in the existing item.

(6)    Schedule 1, item 81, page 34 (lines 21 to 27), omit subsection 99ACE(5), substitute:

        (5)    If, on a day before the reduction day:

             (a)    one or more of the listed component drugs contained in the drug in the related item had been subject to a 12.5% price reduction; and

             (b)    because of that price reduction, the approved price to pharmacists of the related brand of the related item was reduced;

then the reduction referred to in subsection (3) or (4) is to be adjusted to reflect:

             (c)    the extent to which the 12.5% price reduction was taken into account in working out the amount of the reduction to the approved price to pharmacists; and

             (d)    the quantity of the listed component drug contained in the drug in the related item.

(7)    Schedule 1, item 83, page 62 (after line 18), after subsection 101(4AB), insert:

Function relating to Minister’s decisions about prices of combination items

  (4AC)    If the Committee is satisfied that therapy involving a combination item provides, for some patients:

             (a)    a significant improvement in patient compliance with the therapy; or

             (b)    a significant improvement in efficacy or reduction in toxicity;

over alternative therapies, then the Committee must advise the Minister accordingly.

(8)    Schedule 1, page 66 (after line 23), after item 99, insert:

99A  Transitional provision—approved price to pharmacists

If the determination day or reduction day referred to in subsection 99ACD(6) or 99ACE(5) of the National Health Act 1953 is a day that is on or after this Schedule commences, then the reference in those subsections to the approved price to pharmacists on a day (the relevant day) before the determination day or reduction day is a reference to the approved price to pharmacists within the meaning of subsection 98B(3) of that Act as in force on the relevant day.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Firstly, I ask the minister to give the rationale for the amendments to the legislation. There has been a long time to consider the legislation but amendments have come forward. It would be good to get those amendments explained. Secondly, I ask the minister to tell us who is on the medicines working group, what its function is and how its deliberations are made.

George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

Senator Brown, are you referring to the access to medicines working group? You asked about a body called the medicines working group. Is that a reference to the access to medicines working group?

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

It is.

George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

I am just getting the answer for Senator Brown, but he seems to have vacated the chamber.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

I think you are both in the position of taking advice, Minister. Parliamentary Secretary, do you need the question put to you again by Senator Brown?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Mr Chairman and Senator Brown, I apologise, and I apologise to the Senate.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Senator Brown, I wonder if you would put the question to the parliamentary secretary again. That would probably make for an easier commencement to this debate.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I would just comment that the government seems to be having revolving chairs over there. That is the third person I have seen representing the government in the ministerial role in the last 10 minutes. We have a right to expect more consistency and organisation. The government is in control of the chamber, but it seems like it does not know where it is at the moment. I will again put the questions about the medicines working group: who is on it, how does it deliberate, what is its bailiwick and what have its outcomes been? I also asked for the government to explain its amendments. I thought it might want to do that, but I am not sure which of the government spokespersons would have the best information on that.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

I am sure the parliamentary secretary will motivate the amendments. Before you do so and before you answer that general question, Parliamentary Secretary, I wonder if you would table the supplementary explanatory memorandum which you have.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill. The memorandum was circulated in the chamber on 20 June 2007. Senator Brown, I am not quite certain what you want—whether it is information about the access to medicines committee or the medicines committee under the free trade agreement. They are two different committees.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Both are a mystery to the chamber as of this moment. You might like to outline the make-up and role of both committees.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I will address the access to medicines working group first. The Department of Health and Ageing and Medicines Australia are working together to consider issues relating to timely and appropriate access to effective new drugs on the PBS through the access to medicines working group. The work of this working group will complement other projects currently being progressed between Medicines Australia, the PBAC and the department such as the outcomes of the joint policy conference convened in July 2006 and the development of key performance indicators as part of the review of post-PBAC processes. the group will provide advice and recommendations to the Minister for Health and Ageing for the consideration of the Australian government. The first meeting of the group was held on 24 April this year, and the communique from this meeting is being finalised.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Who is Medicines Australia?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Medicines Australia is a group that represents the pharmaceutical industry in this country.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

What are the names of the people from Medicines Australia, and indeed the people from the department, who are on the access to medicines working group?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

They are Will Delaat, who is the co-chairman along with the Deputy Secretary of the Department of Health and Ageing, David Learmonth; David Grainger, representing Medicines Australia; Ian Chalmers, representing Medicines Australia; Duncan O’Brien; and, from the Department of Health and Ageing, David Learmonth, Rosemary Huxtable, Stephen Dellar and Andrew Mitchell.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

You have said that they provide advice and recommendations to the minister. How does the group work? Is it a consensus group or do deliberations come to a vote? What is the constitution of this group? Could the minister acquaint the committee with what that constitution is and maybe table at a later time the structure and how this group works and deliberates?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

It is a consultative group; an advisory body that consults, advises and discusses issues.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Does it work by consensus? Is that the model that is used?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

It has only met recently, and a communique will be released relating to the outcomes of that meeting.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am going back to the structure. What is the structure? Do those eight people sit around the table and, if so, do they have to come to a consensus for a recommendation to go forward to the minister or is this done ultimately by a vote? What are the working parameters for this group? Surely there must be some.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I understand that it is simply an advisory group or a consultative group to discuss issues relating to the pharmaceutical industry with respect to Medicines Australia and, on the other hand, the Department of Health and Ageing. That, as I understand it, is its role. It is a forum to continue normal dialogue.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

So it does not produce recommendations or advice for the government or the minister?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

It has not produced advice, as I understand it, at this stage because it has only recently been constituted. But in the future it may have advice for the government. I am not certain, but it may.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

How will it resolve it if there is a disagreement on the group? If you are going to make advice, you have to come to an agreement. How do you get around disagreement on this group? Obviously it does agree from the outset—otherwise it would be superfluous—so there are different points of view coming forward. How does it determine how it will make advice or recommendations to present to the minister?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

My understanding is that if there is disagreement then there simply would not be advice per se. I think the strength of bodies like this is that when both the department and the industry in effect agree on policy proposals that gives the outcome strength. If there is no agreement then clearly recommendations to government would not be forthcoming, nor indeed would they have much cachet because the department and industry groups could not agree.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

So, Minister, you agree with me—through you, Mr Temporary Chairman—that that means the pharmaceutical industry group represented there has a power of veto on advice and recommendations going forward because if there is no agreement then, on what you said, advice or recommendation does not proceed?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

No, it is simply a forum for discussion—like so many of the other undertakings of this government, or indeed various governments, that they maintain a dialogue with industry groups. I think that is important, and I think we all agree that that is important. That is what this access group does.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

So what we have discovered here is that this is a group that works to come forward with recommendations and advice but not if there is dispute. That simply means that advice and recommendations will not come forward to the government unless the pharmaceutical industry agrees with them. I am not going to further squeeze the good senator on this matter, but that is clearly how it will work. However I wonder if the senator could tell the committee who those four gentlemen—Will Delaat, David Grainger, Ian Chalmers and Duncan O’Brien—represent. Which corporations do they come from?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

To correct Senator Brown: I said this before, but let me reiterate that this government consults with industry bodies. It does so in relation to all sorts of different industries, right across governmental action. Sometimes departments in their liaisons will agree with industry; sometimes not. But this is just another forum for advice to government. Industry groups do not have vetoes over departments or governmental advice. This government does not work like that.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

No, sure, if we were to take that on face value—and I cannot. We have discovered here that the access to medicines working group, which is to advise government and the minister on the very matters that we are discussing in this legislation, will come forward with advice if there is agreement. The department can advise the minister—obviously it can—but, as far as this influential group is concerned, if the corporations do not agree, that advice does not go to the minister. Let us make that clear. Yes, it is a discussion group, but it is not discussing things for the sake of having morning tea and pleasantries; it is discussing things because it wants to give advice and recommendations to government about the workings of the PBS and therefore about the best outcomes—as this working group sees it. We have established here that, if the drug corporations, represented by the gentlemen that I have mentioned, do not want advice going forward, the working group does not have agreement and the advice will not go forward from that working group. It is still made from the department, but as far as the working group is concerned it will not proceed. I just ask again whether the senator could tell the committee which corporations the four gentlemen named as representing the industry themselves represent.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Again, Senator Brown, I will clarify this. There are all sorts of consultative and advisory bodies across government. In this portfolio, I know for example that the AMA—the Australian Medical Association—is often in consultation with the department. Sometimes the department and the AMA agree; sometimes they do not. Government takes their advice sometimes; sometimes it does not. That is government. This particular group, Medicines Australia, is no more and no less than any other industry group that government consults with. It is as simple as that.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

No, it is a meeting of the departmental four, who were named, and the Medicines Australia four, and Medicines Australia is the representative of the US drug corporations and other international drug corporations. If it is not then let the minister’s representative tell the committee who else they represent. It is actually a peak body representing the interests of international drug corporations, meeting with the department to forward advice and recommendations where there is agreement, and that effectively means that the corporations have a veto role here as far as the access to medicines working group is concerned.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

In the industry portfolio, I know that there is often discussion about the car industry. The car industry and the Department of Industry, Tourism and Resources sit down and discuss policy with respect to the manufacture of cars in Australia. Those industries are US corporations. There is no plot behind that; it is just a simple fact that, in this country, when government is soliciting advice from consumers, which also happens, but also in relation to industry, some corporations are American—the Ford Motor Company and General Motors. I think, Senator Brown, the idea that somehow the pharmaceutical industry is different and that the government has a different approach to the advice from pharmaceutical companies—as opposed to, let us say, the car industry or any other industry—is ridiculous.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

We are not dealing with the car industry; we are dealing with the pharmaceuticals industry and we are dealing with the world-best Pharmaceutical Benefits Scheme in making sure that Australians get value for money in the medicines that are required for their good health. It has nothing to do with the car industry, and the comparison is simply false. Let me try once more: could you please tell the committee the corporations that Mr Will Delaat, Mr David Grainger, Mr Ian Chalmers and Mr Duncan O’Brien represent. It is not hard. After all, there has been an agreement by the government for this group to be set up.

The senator says that they first met in April and they have a report, but we do not have it available. I am so used to this from this government. Here we have a parliament determining very crucial and complex legislation, and a report from a working group that is very germane to this legislation, but the government is saying: ‘You’ll get that after the vote has being taken on this matter. We won’t give you that information.’ I would have thought—and I will ask this: is there a draft report? Is it available, and can we have it tabled? If not, what is the expected date of arrival of this report from the first meeting of the access to medicines working group, and will the minutes of that and future meetings be made available to members of parliament, to this chamber?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Just to remind the chamber: this group has met once, and I think basically that was about how the group was going to go about its business. It just had an initial meeting. In relation to the gentlemen you mentioned before, Mr Will Delaat works with Merck Sharp & Dohme; David Grainger with Eli Lilly; and Mr Ian Chalmers and Mr Duncan O’Brien are in fact employees of Medicines Australia. That is the group. In relation to the minutes of those working groups, they are not made available. But I understand that a communique of the discussions held—a report on outcomes—will be on the website of the Department of Health and Ageing when it is finalised.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am not going to draw this out much further, but there we have it. I did ask earlier about the structure of these meetings and how they were going to work. We have at least found out that it is not up to us in this parliament to have a say in that—in fact, the government has not had a say in it; it is up to the four members of the department and the two representatives of the drug companies Merck Sharp & Dohme and Eli Lilly to come to an agreement on that. We will be told about the structure of this very powerful advisory group but not until after this legislation has been dealt with by the parliament. That is an appalling process. If that meeting has taken place, the department knows the outcome. For the department and the government to refuse to give details of the working structure of this committee is a slight on this chamber; it is an insult to us. We ought to have that information so that we can at least see how this body is going to work.

Underpinning this is our real concern that the drug companies involved—and let me reiterate that they have been the most lucrative sector of the market on average over recent times—are undoubtedly going to be moving to do what they can about getting better returns out of the Australian Pharmaceutical Benefits Scheme. The government has set up a system through the US-Australia Free Trade Agreement. The government said that it would shelter the PBS, and we now know that the PBS is not sheltered. We now see the chief advisory group actually representing the drug corporations with a power of veto, with secret minutes and with a report that parliament does not get at a time when it needs to legislate on crucial legislation like this. It is a committee that is actually in the service of the drug corporations and their profit line. It does not serve the public of Australia, the pensioners, the people using the PBS, the doctors and pharmacists. Ultimately, it is in the control of the drug corporations.

Yes, the government can take the advice or it can leave the advice. But where we have a secret organisation that is giving advice that is not available to the parliament but is going to go to the minister after this legislation is passed, we have to be very concerned. I object to that process. The government has the numbers in the Senate—I hope that it will not have the numbers after the next election—but I object to that process. It is undemocratic. It is simply an anathema to the proper role of the parliament, which is to be adequately informed and have access to the information—particularly with regard to schemes that cost millions of dollars of taxpayers’ money and save us from the US style system whereby the corporations call the tune and receive the monetary reward. We have to protect our Pharmaceutical Benefits Scheme against that, but we are not going to do that with the secret arrangement that has been described here this morning whereby drug companies hold the veto.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

This notion that there is some link between this bill and the United States-Australia Free Trade Agreement is nonsense. There is no conspiracy; indeed, there is no link. The Australia-United States Free Trade Agreement does not impact on the ability of the government to set domestic policy on the pricing and listing processes of the PBS; that is a fact. The changes to the PBS effected through PBS reform are clearly a matter of domestic policy and were designed to create budgetary headroom for the listing of new medicines and to increase the transparency of the marketing arrangements used by companies when medicines are subject to competition. I was listening to the second reading debate earlier today. Labor Party senators all agreed that this bill was necessary. Why? Because it actually strengthens the PBS system and allows budgetary headroom for more drugs to be listed.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

We hope.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

That is the policy intention of this bill. Australia’s obligations under the free trade agreement in relation to the PBS are limited to ways to improve the transparency of the processes undertaken by the Pharmaceutical Benefits Advisory Committee in assessing submissions by companies for the listing of drugs on the PBS. These obligations have been fully implemented through public hearings before the PBAC, the release of public summary documents and the establishment of a process of independent review for certain PBAC decisions. The fundamental architecture of the PBS has not been changed by the free trade agreement. There will not be any changes to the fundamentals of the way in which the PBAC undertakes its work as a result of the PBS reform. The aspects of PBS reform that relate to the pharmaceuticals industry were negotiated with domestic stakeholders, as government always negotiates and discusses with industry stakeholders. No negotiations were undertaken with the US government or industry on the reform package.

I know that certain sums were mentioned this morning and in evidence to the Senate Standing Committee on Community Affairs. The savings to the taxpayer of $580 million over four years and $3 billion over 10 years, which Senator Brown mentioned before, will strengthen and enable more drugs to be listed on the PBS. This is not some sort of conspiracy. This will in fact assist this great scheme to develop and it will give budgetary headroom for the listing of even more drugs and a more comprehensive medical system.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Let me tell you that more drugs is not necessarily better medicine. It is not a matter for this debate today, but I would point out that the increasing use of drugs in itself comes with a penalty clause. There are thousands of people in Australian hospitals today because of the use of drugs rather than because of the original illness they had. The whole medical system is under huge pressure—look at the series of articles in the Age a few months back—from the drug corporations, because they make their money out of it. They have a different philosophy to what we as legislators have, which is to look after the best interests of Australians—both their pockets and their health—and to what medical experts have in wanting to deliver good health to their patients.

So more is not necessarily better. In fact, what underpins the Pharmaceutical Benefits Scheme is the need to ensure that drugs do not come onto the scheme unless they have a very clear advantage over drugs which are already on the scheme—unless the drug has some new capability to improve people’s health or to reverse the symptoms of an illness which they are suffering. There is the problem. We are concerned that the legislation we are seeing today will allow the corporations to get more drugs onto the system without improving the outcomes for Australians. Their interest is to sell drugs; our interest is to get the best health outcome at the lowest price possible for the Australian people. We are concerned that this legislation gives more power to the pharmaceutical corporations. We looked at that advice group. It has certainly given the pharmaceutical corporations, as far as its advice to government is concerned, veto power—the power to ensure that advice that is not in the interests of their profit line simply does not go forward to the minister. The department might give contrary advice, but that is a different matter. I ask Senator Mason to inform the chamber how this particular legislation improves the reference pricing system, which is so important and fundamental to the PBS.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Again, consultation with industry by this government happens across a range of portfolios; again, there is nothing unusual about that. The Pharmaceutical Benefits Advisory Committee make decisions about the listing of drugs on the PBS, not politicians. They are experts and they make decisions based on cost-effectiveness and medical efficacy. The PBAC will continue to recommend only those medicines that have been assessed as safe, efficacious and cost-effective. This is a robust and successful system admired internationally for listing a wide range of medicines that offer the most clinical benefits to patients at the best value for money. This system will not change under the PBS reforms. I heard Senator Moore earlier today during the second reading debate. She said—I think I am right in saying this—that this is a great system and we have to protect it. I agree with that. The aim of this bill is to do just that.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Of course the government position is going to be that this will be a good thing for the dissemination of the best drugs at the cheapest prices to Australians. Of course it will say that; it is not going to say anything other than that. But my advice is that the access to medicines working group was a specific outcome of the US-Australia Free Trade Agreement process. If it is not and it was just set up separately, it would be good to hear that from the senator—that it was not something that came out of that discussion at the time of the US Free Trade Agreement.

I would ask Senator Mason, through the chair, to explain where the access to medicines working group came from, why we did not have it before, what it has replaced and what its role is. The government has been talking to industry for 100 years, I am sure. So there was not a need to set up talks with industry; that has been going on all the way down the line. Why this particular working group and why has it come hard on the heels of the US-Australia Free Trade Agreement?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I can inform Senator Brown that the establishment of this group was simply as a result of ongoing PBS reforms to formalise the process. That was all—to consult further with industry. It had nothing to do with the Australia-United States free trade agreement.

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

Senator Mason would be aware that these issues that Senator Brown has been raising about the public transparency of the processes of this group were raised during the inquiry and we had an interaction about that. My understanding of the response Senator Mason made to Senator Brown’s question earlier regarding the public statements about what happens at the working group was that there would be a public communique on the website of what had gone on at the meeting. I want to clarify if that is going to be the ongoing operating practice for the group—that the questions asked by Senator Brown today and questions during the inquiry by a number of witnesses, about a transparent understanding of the outcomes, will be the process.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

My understanding is that yes, that will be the ongoing process. The results of those meetings will be published on the website of the department.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I want to go to the membership of the access to medicines working group. On what basis was the Generic Medicines Industry Association not included? Was consideration given to including the generics industry, given that they are not members of Medicines Australia? On what basis was the decision made not to include the generics industry and who made that decision? What will be the procedure that the department and therefore the government will adopt to formally consult with the generics industry? You will probably tell me that you have their phone numbers and you will ring them up, but the access to medicines working group is a formalised committee. Generics are not represented on it. The committee talked about this last Friday. I think it has to be a bit more substantive than to say that we have an ongoing commitment to consult.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

The access to medicines working group is about the release of new drugs into Australia, so generics do not apply. That is the reason it is made up of the non-generics pharmaceutical companies. In relation to consultation with the generic pharmaceutical industry, as you say, that is ongoing. At present there is an implementation working group for the generic medicines awareness campaign. I think the government is spending $20 million promoting that. Senator Moore mentioned that in her speech.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am not quite sure that that answered the question about whether it is about new drugs. We still have not had the reasoning, by the way, for the government’s amendments. We will need that before that comes to a voting consideration. I also ask the minister: would you give your explanation of the difference between F1 and F2?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Subject to the passage of this bill from 1 August 2007, drugs on the PBS will be separated into two groups, each subject to different pricing arrangements. Drugs where there is only a single brand listed will be F1. F1 will contain single-brand drugs—both on patent and off patent, but generally on patent—that are not interchangeable at the patient level with drugs that have multiple brands. Approximately 410 drugs will be on F1 as of 1 August this year. PBS expenditure on these drugs, for your interest, in 2005-06 was about $3 billion. Drugs with multiple brands listed on the PBS that are interchangeable at the patient level with a drug that has multiple brands will form the F2 formulary.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

So that means that the access to medicines working group will be dealing with F1 drugs. Is that right?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

The access to medicines working group is about drugs that are not already listed. They are ones that may be listed in the future. So in regard to F1, you are right in the sense that we are talking about single-brand listed drugs, but the working group you are referring to talks about drugs that are not yet listed.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

When you talk about multiple brand drugs you are really including there the generics that are also available. That includes generics. But you know and I know—we all know—that what begins as a single-brand drug, after the discovery, the research and development and the marketing of it, leads to other companies picking up on the same drugs and producing them later down the line. What we are really seeing here with this division is the opportunity for an exclusion of the generics industry and competitors and a discrete point of lobbying to have new drugs brought on the market.

I asked about reference pricing. Under the existing system, if you are going to bring a new drug onto the market that is going to fix rheumatoid arthritis, there are lots of drugs there at the moment that will look after components of that. The reference pricing system says that you have got to be able to show that this is going to do better: it is going to alleviate pain, reduce stiffness, increase mobility or have much less side effects than drugs already existing on the market if you are going to get there. Is that still going to be the same or is this medicines working group going to be able to look at any new brand drugs that come onto the market? Where is this reference pricing system, which is so central to the PBS, brought into the discussions of the access to medicines working group and how is it divined there?

Let me ask this question: when the department goes to meet up with these drug corporations in this group and the drug corporations come along and say, ‘We’ve got this new drug. We’ve tried out. It’s been used in children in Ethiopia and here are the results,’ how does the department counter that? Where is the department’s backup to be able to assess the information being brought forward by the corporations—or is it not going to be at that level? Are they not going to be talking about drugs, per se—that is for somebody else; they are simply talking about the process of how F1 drugs are assessed as they move on to the conveyor belt with the huge power of the drug corporations before them to push their way onto the Pharmaceutical Benefits Scheme with a great premium going back to the corporation, even though there may be no real improvement on drugs that are already available at much lower prices and on the market and with which doctors and dispensers are much more familiar?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Senator Brown, I think we discussed this earlier in the committee stage. The working group has nothing to do with recommending listing new medicines; it is the Pharmaceutical Benefits Advisory Committee, the PBAC, which all sides have mentioned this morning, that recommends listing new medicines. The PBAC will continue to recommend only those medicines that have been assessed as safe, effective and cost-effective. This is robust and successful and admired internationally for listing a wide range of medicines that offer the best clinical benefit to patients and the best value for money. This system will not change under the PBS reforms. Senator Brown, I would be surprised if you did not agree with the current system in relation to the listing of new medicines by the Pharmaceutical Benefits Advisory Committee. This system will not change. There is nothing in this bill that will change that. And if you do not agree with that, I am surprised that the Greens oppose that process because I have heard very few people in the community opposing it—very few.

In relation to reference pricing, you are quite right: reference pricing was one of the key factors in the pricing of groups of medicines under the act. But there are problems with it. In a sense, what I am about to discuss is all about trying to get, as I think we all want to do, the best value for money for the consumer and also for the taxpayer. Current reference pricing arrangements limit the capacity to pay lower prices for multiple-brand drugs as price reductions may flow directly to other drugs in the same reference pricing group. This is highly problematic when a price reduction flows to a single-brand drug in a reference pricing group and therefore a suitable alternative may not be available for an individual patient. Therefore, that group of medicines cannot lower in price because people would miss out because, with a single brand, a particular company may not be able to reduce the cost of the drug. If the supplier of the single-brand drug does not agree to reduce the price, the minister must determine that either another special patient contribution premium applies or the supplier may withdraw the drug from the PBS. That is the problem. While all drugs in a reference pricing group provide similar health outcomes at the population level—that is what a reference pricing group is—not all treat exactly the same condition, nor may they be equally suitable for an individual patient.

There will be some cases where a patient cannot easily move from one drug to the next. There may be similar health outcomes, but that does not mean they can necessarily move from one drug to the next. The withdrawal from the PBS of some single-brand drugs in these circumstances would therefore create difficulties for prescribers and also for patients. Finding a way to significantly reduce prices and not endanger the continued listing of a single-brand drug that is not interchangeable has been a key consideration in developing the PBS reform package.

What has developed in Australia and is developing overseas is that, with the arrival of generic drugs, drugs are becoming a commodity. What the government wants—I think what the taxpayer wants—is for the government, the taxpayer who foots the bill, to take advantage of lower priced drugs where there is a market for those drugs. At the moment the price is artificially inflated. I was looking this morning at the department’s submission to the Senate committee inquiry. I noticed on page 9 of that submission the comparison of United Kingdom and Australian prices for some commonly prescribed drugs. Senator Moore would be aware of this table, I am sure. Two of the most expensive drugs in terms of PBS expenditure are pravastatin and simvastatin; I think they are both for lowering cholesterol. In 2005-06, the cost of pravastatin to the taxpayer was $72.4 million and simvastatin in the same period was $153.1 million. We all agree that is a lot of money.

The aim of this bill is to ensure that the market operates with respect to those generic drugs that are artificially held up because of reference pricing. That is the key to it. The example that is in the submission from the department to the Senate community affairs committee is that pravastatin in Australia costs $50.82 and in the United Kingdom it is $9.32. Less than one-fifth of the price is being paid in United Kingdom for the same drug. For simvastatin, the cost in Australia is $52.02 and in the United Kingdom it is $9.11—again, less than one-fifth of the cost. What the government is arguing, and I understand the opposition agrees with this, is that those savings should be passed on to the taxpayer and to the patient, because we are talking here about hundreds of millions of dollars and, over 10 years, billions of dollars. I do not see why the taxpayer should foot that bill.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I could not agree more, but there is the other side to that coin—that is, the push for new drugs to be brought onto the PBS, which are not subject to the stringencies of the reference pricing system, that will not have the value for the people who purchase those drugs above and beyond drugs already existing on the market. We need to protect that system. I want to go back to the access to medicines working group, which we have been able to get information about from Senator Mason this morning. Could Senator Mason tell me what the Medicines Working Group is and the difference between the two?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

The Medicines Working Group is a group established under the free trade agreement. It meets annually to discuss issues relating to general information sharing.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

As I understand it, the Medicines Working Group is a meeting between delegates of the Australian and US governments to discuss those matters. The question that comes from the minister’s concern about the obvious price win for the big companies as against the UK, which you were just talking about, is: will this new system deliver lower prices for new drugs and what assurance do we have that it will? You are arguing that this legislation is required to do that, but can you tell us how it will achieve that and can you give us an assurance that that will be the case?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

In relation to the Australia-United States Free Trade Agreement and the Medicines Working Group, I understand that information about that working group is available on the departmental website. In relation to savings on drugs, for the group that I described before as F2, the answer is yes, when the market is able to operate in relation to those drugs. They are now a commodity. They are effectively copies of drugs which were originally patented, so they are generally now off patent. When drugs go off patent there is competition, and that will certainly have an effect on the price of drugs. As I have said repeatedly, that will save the community, the taxpayer and the patient hundreds of millions of dollars—in fact, billions of dollars—over the next 10 years.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

We know that. We were talking about the F1 single-brand drugs before they come off patent. The minister gave examples of how some of these drugs are much cheaper in Britain than they are in Australia. The PBS is paying through the nose for them. I asked if these drugs coming onto the PBS will be at lower prices or equivalent prices to those overseas, at the lowest possible price, because of these amendments.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

When they are generics, yes, they will.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

They are not generics; they are single-brand drugs.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Sorry, I misunderstood the question. The arrangements with respect to new drugs going onto what we call the F1 formulary will not be changed by this bill. The cost of those will remain the same—this bill does not affect them. When those F1 drugs come off patent—and generally they are copied by other companies—the community will save hundreds of millions of dollars, or possibly thousands of millions of dollars, by taking advantage of competition in the market for generics.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

That leads to concern that for those drugs coming onto the F1 listing the highest prices can still be paid under the PBS against other countries. You are not giving us an assurance that these newly listed single-brand drugs are going to be at world’s lowest prices. That is not going to be assured through this.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

As I mentioned, the process for new brand name drugs coming onto the market in the F1 category has not changed. Whether those drugs will be listed in F1 will depend upon the evaluation, as I mentioned before, by the Pharmaceutical Benefits Advisory Committee. They will make that decision. They make a decision based upon medical efficacy and cost-effectiveness. That will not change. The drugs will be accepted by the PBAC only if they are the most cost-effective drugs available.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Of course, that still can lead to a situation in which new drugs will come onto the market which we are going to pay five times as much for here as they are paying in Britain, won’t it?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

No. When a new drug comes onto the market—it is not generic; it is a new drug—it is assessed for cost-effectiveness. If it is not cost-effective in terms of its medical efficacy, it will not be listed. There is no reason why the new drugs will be more expensive than those in the United Kingdom or elsewhere.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

So how have we arrived at the situation where that is the case with existing single-brand drugs that the PBS is paying for?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Senator Brown, if you supported this bill then we could fix the problem. This is the problem—that the drugs I mentioned before are generic drugs and the market has not been able to operate with respect to them. They are copies of drugs. If you supported this bill, as I think you should, you would find that these drugs would be potentially one-fifth of the cost currently being charged to taxpayers. The drugs I mentioned before are generic drugs and they will be about 70 per cent or 80 per cent cheaper if you support this bill.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

That is a good thing, but how are we going to assure that the hugely lucrative new drugs being brought onto the PBS are not going to be at a higher price than the same drugs going on the market in the UK or the US?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I understand, Senator, that you are now not talking about generics?

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

No, I am talking about single-brand drugs.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

If you are talking about single-brand drugs generally in the F1 category, then, as I mentioned before, the process for listing those drugs will remain with PBAC and they will only be listed if they are the most cost-effective and medically efficacious drugs. Clearly, they would not be listed by PBAC or recommended for listing by PBAC if they were far more expensive than the United Kingdom because the market would not operate like that as they would not be the most cost-effective option.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Not quite. It is complex, but we will continue. We could go round in circles on this. The pharmaceutical corporations have immense power and they have had hundreds of millions of dollars of taxpayers’ money going towards paying higher prices in Australia than in the UK because of that power. Legislation could prevent that, but I admit we are over a barrel with the big pharmaceutical corporations. It is a very difficult matter and it always has been. I think it is very important to recognise that they have a huge say on how this system will work and how advice will go forward to the minister. I go back to the reference pricing system. That is complex in itself, but that is our safeguard. Are you, Senator Mason, and the government giving an assurance that this bill will have no impact on the reference pricing system?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

It will clearly have an impact on the reference pricing system with respect to generics in the F2 group. The entire idea of the bill is to, in a sense, disaggregate them. As I explained in my previous answer, if you do not, the taxpayer and patients will be paying too much for generic drugs. The reference pricing cannot remain for generic drugs, because if it does, the savings to taxpayers and to patients will never occur.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I will just take that one step further Yes, there will be savings in that situation, you assure us. Can you also assure us that there will not be the ability to price-hike because of the change to the reference pricing system by corporations negotiating to keep their drugs on the pharmaceutical benefits system?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Again, as I mentioned, the PBAC will ensure that only the most cost-effective drugs and medically efficacious drugs are listed. Those are the criteria.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

No assurance there. I want to ask about the Medicines Working Group—not the earlier group we were talking about—which is listed on the department’s website. The website says:

Australia and the United States agreed to establish a Medicines Working Group (MWG), with the objective of promoting discussion and mutual understanding of issues relating to the Pharmaceuticals Annex of the AUSFTA.

The Medicines Working Group provides a forum for discussion between officials of federal government agencies responsible for healthcare programs and other appropriate federal government officials. No industry representatives attend these meetings.

By crikey, they are in the wings, though; particularly with representatives from the United States government. Back to the website:

The framework in which the Medicines Working Group operates is detailed in the agreed Standard Operating Procedures (SOPs) which cover the group’s composition, chair arrangements and meeting procedures. The first meeting of the Medicines Working Group was held in Washington, DC on 13 January 2006. The second meeting was held in Sydney on 30 April 2007. The discussions at both meetings were on issues relating to the pharmaceutical provisions of the AUSFTA. The Agendas and the Joint Statements for these meetings may be found below.

Then there are matters relating to trade opportunities:

The AUSFTA will create significant new benefits and opportunities for Australia. Opportunities relevant to the health sector include:

Full access for Australian goods and services to the $200 billion US federal government procurement market.

Enhanced legal protections that grant market access and non-discriminatory treatment for Australian service providers in the US market, with only limited exceptions.

The Australia-only E-3 Visa (10,000 a year) complements the FTA by allowing a growing number of skilled Australians and their spouses to live and work in the United States.

There is nothing mentioned about the PBS and the advantages that may flow. There is another section on intellectual property and generic medicines. Are the minutes of the Medicines Working Group deliberations available? Who specifically is or was on the Medicines Working Group; where is it next due to meet and what discussion, if any, of the Pharmaceutical Benefits Scheme or reference pricing was had at those two meetings held to date?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I understand that information regarding the composition and membership of the Medicines Working Group is on the website. There is nothing unusual to various industries’ officials—whether agricultural, manufacturing or indeed pharmaceuticals—about different countries geting together once a year, or sometimes more often, to discuss free trade agreement issues. Whether it is with the United States, New Zealand or Thailand, that is perfectly normal. I would have thought it was good policy practice. But the information you require, Senator Brown, is largely on the department’s website.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I could not find them on the website: could you tell me about those?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

The department’s website is www.health.gov.au/ausfta and that contains information about the Medical Working Group and its second meeting. As agreed with the United States, the department has made the following two documents publicly available at its website: standard operating procedures, which cover the group’s composition, chair arrangements and meeting procedures; and a joint statement following the meeting on 30 April 2007. We can expect an agenda to go up shortly.

I will take the opportunity while I am up to speak briefly on the amendments proposed by the government, which we have not specifically done and Senator Brown drew that to my attention. I will take the opportunity to do that right now. I would not want to disappoint Senator Moore. The amendments, which I understand were moved by my colleague Senator Brandis on behalf of the government, relate to a recommendation from the Senate Standing Committee on Community Affairs for the pricing of single-brand combination items. Where single-brand combination items provide no additional health benefits over their component drugs, the current arrangements for the pricing of these items will continue to apply. However, there may be cases where a combination item provides significant health benefits compared to alternative therapies. The bill as proposed does not allow these benefits to be taken into account when the prices of component drugs are reduced following statutory price reductions. The amendments will enable the Minister for Health and Ageing to take into account the advice of the Pharmaceutical Benefits Advisory Committee on whether a combination item has advantages over alternative therapies. The PBAC will be required to consider evidence of significant improvements in compliance efficacy or reduced toxicity associated with a combination item compared to alternative therapies. Where the PBAC provides this advice, the minister may decide not to flow on some or all of the price reductions for the component drugs to the combination item. There is also a technical amendment to the bill to correct a drafting error where the expression ‘reduction day’ was used instead of ‘determination day’.

Finally, I would like to thank the committee for its prompt and thorough handling of the inquiry into the bill and record the government’s support for the other recommendations made by the committee. These relate to the minister reporting to the Senate 12 months after the implementation of the reforms on their impact, particularly on the cost of medicines to consumers, and the Department of Health and Ageing making publicly available information on outcomes of the processes being employed to affect the changes contained in the bill. These recommendations will be implemented according to the committee’s recommendations. I did note Senator McLucas’s and Senator Moore’s comments about the short time frame for this committee. That is a pity. Having served as chair of a committee that had to put through a report in very quick time, I understand the enormous frustrations of that.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I want to indicate that Labor will be supporting the government’s amendments. I said as much in my speech in the second reading debate. To be frank, to be dealing with substantive amendments in this way, and given the complexity of the issues we are talking about, a half-day inquiry and a reference on a Thursday for an inquiry on a Friday to report on the Monday is really just not good enough. It is not just that it is an abuse of the Senate processes; it limits the ability of the community to understand what is being done to their PBS.

Senator Moore is absolutely right. We in Australia value our PBS very much. When we are going to change it, I think our responsibility is to take the community with us and not just throw things together quickly at the end, as we seem to have been doing here this morning. Three different ministers have sat in that chair since we started debating this. When we started the committee stage, we did not know who to ask the questions of. That is no way to run a parliament and it is no way to run the PBS. We want to be assured that changes that we make to the PBS will in fact achieve the outcomes that the government is expressing that it desires.

As a former full member of the Senate Standing Committee on Community Affairs, and now a participating member of the committee, I am very proud of the work it has done. We have been able to look at issues objectively and come up with very sensible suggestions. It is not a committee that has worked in a political way for a very long time. To give the committee only half a day for its inquiry—and during a time when the Senate was sitting, so when divisions occurred we had to move out and then come back in—made it very difficult for the members of that committee and the secretariat to really understand such complex legislation.

We have had a look at the government’s amendments. We think that they probably—and ‘probably’ is no way to be making policy—will deliver the intended outcomes. We will be supporting them. But I say again to the government: if your credibility as policymakers is not going to be questioned in the future then, I am sorry, but these sorts of Senate processes will not do legislation justice.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I will not be opposing the further passage of the legislation, but I was wondering if Senator Mason could take on notice the question of whether the reference pricing system was brought up during the meetings of the medicines working group.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I will take that on notice.

Sandy Macdonald (NSW, National Party) Share this | Link to this | Hansard source

The question is that government amendments (1) to (18) be agreed to.

Question agreed to.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I move opposition amendment (1) on sheet 5308 revised:

(1)    Schedule 1, page 22 (after item 73), after line 10, insert:

73A  After section 98AA

Insert:

98AB  Notification by Department of Alterations to pharmaceutical benefits scheme

                 The Secretary must cause to be made publicly available on the Department’s website information on the outcomes of the changes to the pharmaceutical benefits scheme resulting from the introduction National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007.

This amendment essentially reflects recommendation 3 of the Senate inquiry. It essentially requires that information about the process of transition and changes to the Pharmaceutical Benefits Scheme resulting from the introduction of these amendments will be made publicly available. The amendment suggests that that information be made publicly available on the website. I think the parliamentary secretary indicated a minute ago that he had no problems with the recommendation from the Senate Standing Committee on Community Affairs. This amendment simply puts that into effect. It is a very straightforward, simple amendment which provides transparency for the community on the process. I am not sure how you could vote against it, to be frank.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

In relation to item 1—that is, 73A after 98AA—regarding notification by the department of alterations to the Pharmaceutical Benefits Scheme and making information publicly available, the government supports that amendment.

Question agreed to.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I move opposition amendment (2), which puts into effect recommendation 2 of the Senate inquiry:

(2)    Schedule 1, Part 1 page 63 (after line 14), at the end of the part add:

93A  At the end of section 114

Add:

   (2)    In addition to matters referred for inquiry in accordance with subsection (1), the Pharmaceutical Services Federal Committee of Inquiry must prepare a report for the Minister on:

             (a)    the impact of the reforms made by the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007; and

             (b)    the impact on the cost of medicines to consumers as a consequence of the reforms.

(3)    The report required by subsection (2) is to be completed by 30 July 2009.

(4)    The Minister must cause the report required by subsection (2) to be tabled in both Houses of the Parliament within 5 sitting days of receiving the report.

This is a mechanism for an independent review of the impact of the reforms made by this bill by the pharmaceutical services federal committee of inquiry. The amendment requires the committee to prepare a report for the minister on the impact of reforms and the impact on the cost of medicines. This was the issue that was raised in hearings of the Senate Standing Committee on Community Affairs. It is hoped that there will not be an increase in costs for consumers as a result of the passage of this bill, but I think it is only sensible to monitor that. This amendment simply puts in place a formal process for a review of the impacts of this legislation on the PBS and on costs to consumers.

Like the last amendment, I do not know how you could vote against something of this nature. The appropriate body to undertake this review is, in our view, the pharmaceutical services federal committee of inquiry. At the very least it needs to be an independent body of review. I understand there have been discussions between government and Labor about that, but in the interests of the debate, we are proposing that that committee undertake the inquiry. We also require that the report be completed by 30 July 2009. That, again, is in accord with recommendation 2 of the Senate committee report. The date of 30 July 2009 is 12 months after the last implementation date in the tranche of proposals that this legislation delivers.

Finally, the amendment requires the minister to provide that report on the impacts of these changes to the parliament within five working days of receiving it. I think it is sensible policy to put into all significant legislation a review of change, and I am sure that the community would also like to know whether they have been impacted on, in terms of the cost of their drugs.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Senator McLucas’s amendment reflects the report of the Senate Standing Committee on Community Affairs. I understand that, and I understand that it is an issue that goes to the transparency of the operation of the act, but the government has concerns with it and, in terms of accountability, believes that the minister should prepare a report for parliament rather than the pharmaceutical services federal committee of inquiry, not only because the minister is always responsible to parliament but because it would be more appropriate in this context for that to happen. Senator McLucas, I do not know if you would be minded to adopt that suggestion, but that would certainly be the government’s position.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

Just for clarification, Parliamentary Secretary: are you saying that the minister would conduct the inquiry? Is there a point of negotiation somewhere between your position and ours? The important point that we are trying to make is that it needs to be an independent body of review. To maintain the faith and trust that we, as a community, have in our PBS, we would need some sort of independence to that review process. To ask the minister to conduct the inquiry does not give the level of transparency that our community would expect of us so I request that there might be an opportunity to find something a little bit closer to an independent body of review—rather than the minister undertaking the review.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Thank you, Senator McLucas. I understand your argument, but my understanding is that the minister believes that he should prepare the report. He is the one accountable to parliament and, if the Senate were of the view that the report was not sufficiently transparent, the Senate could conduct its own inquiry. The minister believes that he is in the best position, in consultation with the Department of Health and Ageing, to provide that transparency. If the Senate were uncomfortable with that it could launch its own inquiry.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

Under the current legislation the minister is not required to prepare a report. There is no element of the bill, as it stands, that will ensure that this Senate and the House of Representatives will receive a report that assesses the impact on the PBS or, potentially, on the cost to consumers of changes to the PBS. If this amendment is not carried, we have your word that there will be a report. That is terrific—thank you very much—but I think we need something a bit more substantial than the words that are passed across the chamber in this esteemed place. We will stick to our guns. We will move this amendment and we will be disappointed if you do not support it.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Senator McLucas, I can do little better than give you my word. You will be pleased to know that in terms of process either the government could move an amendment substituting the words ‘pharmaceutical services federal committee of inquiry’ for ‘the minister’ or I could move a government amendment to that effect. In other words, I agree that there should be a 12-monthly report on the operation of the act—you are quite right—and as the committee said, there should be transparency about the operation, but the minister is determined that he should prepare the report. In terms of process, either you could adopt my suggestion or the government could move an amendment of its own volition, incorporating your amendment but substituting the words ‘the minister’ for ‘pharmaceutical services federal committee of inquiry’.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

How about ‘the minister in consultation with an independent group of experts’?

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Senator Mason interjecting—

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

All right. If you do not support my amendment, we might see what happens next.

Question put:

That the amendment (Senator McLucas’s) be agreed to.