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

I present the report of the Community Affairs References Committee on consumer access to pharmaceutical benefits, together with a submission received by the committee.

Ordered that the report be printed.

I move:

That the Senate take note of the report.

This issue was referred to the Community Affairs References Committee on 25 November last year—so almost a year ago. We were asked to look at consumer access to pharmaceutical benefits and the creation of new therapeutic groups through the Pharmaceutical Benefits Scheme, or PBS, and we were asked to look at a range of issues.

We were very busy—the Community Affairs References Committee is a very busy committee—and in June this year we sought an extension to the reporting date of 26 August. Of course, there was another event happening around that time, so everybody was rather busy and we did not get a chance to complete the report. We sought a re-referral from the chamber, after the election so that we could subsequently report, because we thought this was an important issue.

During the inquiry, the main issues raised were around consultation, interchangeability of medicines, exemption from payments of therapeutic group premiums, and the cabinet consideration threshold for higher cost medicines. The committee has made recommendations on each of these issues.

On the consultation issues, concerns were raised regarding the lack of consultation undertaken by the government in the creation of the four new therapeutic groups announced in the 2009 budget and also in the 2009-10 Mid-Year Economic and Fiscal Outlook. The four therapeutic groups were high potency statins and drugs to treat depression, osteoporosis and Paget’s disease.

The committee was concerned about the lack of consultation with consumers, and we have recommended that the government examine ways that there can be greater engagement with consumers in the decisions to create new therapeutic groups. Of course, this is a bit of a moot point now. I should add that the committee has done a lot of PBS work recently, and that is a bit of a moot point in terms of new therapeutic groups because of the passing of the PBS legislation this week.

On interchangeability of medicines, there was quite a discussion. As to the interchangeability of medicines in a therapeutic group, we had quite a bit of discussion. We think it is an important issue, particularly as to the lack of definition around interchangeability on an individual patient basis. In response, the committee has recommended that:

… the Pharmaceutical Benefits Advisory Committee:

• develop agreed principles of what constitutes “interchangeable on an individual patient basis”;
• develop criteria by which the “interchangeability” of a medicine will be determined; and
• publish both the agreed principles and criteria.

We then looked at the exemption from the payment of therapeutic group premiums. The committee was concerned by evidence from doctors indicating that they were not aware that they were able to request an exemption from payment of a therapeutic group premium on behalf of their patients. This did concern the committee quite a bit, and we have recommended that the Department of Health and Ageing provide regular and ongoing education and information to prescribers to ensure that they are aware of the exemptions and the process for seeking these exemptions on behalf of patients. This is a very important point for patients.

The issue of the threshold for cabinet consideration of high-cost medicines was considered as well. During the inquiry, the innovative pharmaceutical industry and consumer groups called for the threshold for cabinet consideration for high-cost medicines to be increased, because it had not been increased for a significant period of time. The point here is that they can get held up in cabinet for up to nine months. So that was raised as an issue. It was not that we thought that cabinet should not look at these high-cost medicines; it was the time consideration for medicines that are not so high in cost because the threshold has not been increased for a while. So the committee has recommended that the threshold be adjusted initially to the value at which the threshold would have been if it had been annually indexed from 2001. And, to stop this issue happening again, the committee has recommended that the threshold be annually indexed so it is keeping pace with the CPI.

Those are the key recommendations of the committee. I urge the Senate to look at the recommendations and I urge the government to take them on board. I commend the report to the Senate.

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

I just want to add some brief comments in support of the Community Affairs References Committee report on consumer access to pharmaceutical benefits. The core message that came out of this is that there is real value in the PBS and the scheme is valued. In fact, all the contributors—and there were over 30 who gave their time and effort to contribute to our committee hearings—stressed the importance of the PBS system. They all said that it was an important system and needed to be cherished and maintained. The important aspect, though, is that it is a dynamic system and needs to be reviewed. It needs to evolve constantly in response to the ever-growing need for people to have effective access to medicines in our country. As to the core messages, Senator Siewert has gone through the recommendations, and I too draw them to the attention of the chamber and the government. I just want to concentrate on the one that looked at more engagement of consumer groups.

One of the things that consistently happens in this area is that we talk about the need to consult and engage with consumers. That is a fine and noble principle but, in reality, it does not happen effectively. At best, at times, it seems token. But when we actually have these discussions we see that the consumer groups take the health system in this country extraordinarily seriously. They value it. They discuss it. They care about it. And no-one knows more about how it impacts on people than those people who use the system. So we did have evidence from the consumer network, and they talked about their willingness to be involved. Certainly, governments, over many years, have consulted with them in a way by having discussions and, when policy changes occur, some meetings with them. But our committee, based on many years of committee hearings, believes that there has to be a stronger, more effective way for consumers to be engaged in policy development and implementation. That was a core element of the evidence that we received and it is also a recommendation that we make from that evidence.

In the area of pharmaceuticals, as Senator Siewert said, there has been considerable debate in this place over the past few weeks on key legislative changes to the Pharmaceutical Benefits Scheme, and that will continue because the scheme, as I said, is dynamic. At the same time as we were having the hearings into this particular inquiry, movement was taking place on post-budget initiatives and that gave a certain focus for many of the people who were contributing to the committee. That was important to our deliberations to see how the department in particular interacted with all of the various groups who had a need to be involved in effective consultation and not just the exchange of information, although that in itself is important. Sometimes there are even questions about how effectively information is exchanged. But the true meaning of consultation is the effective exchange of information with the chance to have engagement in possible change or improvement.

That will not always be possible, particularly when you are talking about budget decisions. But the principle remains: if we are going to get the best system in this country—and we spoke about that with the previous legislation—we need to identify those people who have the knowledge and the interest. We need to value their knowledge and engage them in discussion because they are the people who will best know how policy should be developed and what the impact will be. At this stage I just want to reinforce the importance of this reference, reinforce the importance of the Pharmaceutical Benefits Scheme and say: please have a look at the work that was done by the committee. I acknowledge the work of the secretariat, who work with impossible time frames to meet the requirements of this place. This is another valuable piece of work which should be important to further discussions of our system.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

I also would like to speak briefly on this report. As has been already pointed out by other members of the committee, the report was somewhat overtaken as a reference by the development of legislation by this government and by the signing of a memorandum of understanding between the innovative pharmaceuticals organisation Medicines Australia and the Department of Health and Ageing. We have legislation, as was said, which was passed this week; but, unfortunately, in the view of the coalition, other items definitely needed to be covered there.

The resolve of the committee in the end was to highlight the recommendations which we felt added new material and new ideas to the development of the PBS in the future. I would like to look at a couple of things that we did not highlight quite so much because we understood towards the end of this inquiry that there was a memorandum of understanding that would overtake and, hopefully, resolve some of the issues that were raised with us. One of those was the length of time that cabinet took to approve medicines. If the government takes up our recommendation on indexing from $10 million up to the necessary figure the value of the PBS high-cost medicines that need to go to cabinet then this will assist the scheme.

But it is not just about high-cost medicines; it is also about the time that this takes. I would like to point out to the Senate that Medicines Australia said that, in their view, the cabinet process generally added six to 12 months to the listing time. Given that Australians are already waiting three years for a medicine to appear on the PBS, that process needs to be looked at. This is a view that the coalition would very strongly support. Three to four years for a medication to be listed on the PBS is not reasonable if it is required medicine, yet this is exactly what is happening right now.

The other side of this was the memorandum of understanding itself, which overtook this report in some ways. Unfortunately, the memorandum of understanding was only between the government and Medicines Australia. We have strongly recommended that they need to involve the other stakeholders—the consumers, the wholesalers and the Generic Medicines Industry Association.

The Generic Medicines Industry Association has pointed out that one of the key consequences of PBS reform is the reduction of generic medicines prices. This is good for the PBS and good for the Australian taxpayer, but not if it means these industries go offshore. The generic medicines sector plays a crucial role, the GMiA informed us, in delivering affordable medicines to the Australian public after the market exclusivity period of originated medicines has expired. The commercial viability of the generic medicines sector is driven by volume. A government policy that reduces the PBS list price of generic medicines in the absence of volume drivers significantly risks undermining the viability of the generic medicines sector, the association told us.

Nothing has changed in that area; nothing that the government has done and nothing in the legislation that was unfortunately passed in this chamber this week will change that. We will be watching carefully to see whether the government can process applications more speedily through cabinet. We will also be watching for the unintended consequences, which I suspect are almost inevitable, for the generic medicines industry and its supply in Australia. I seek leave to continue my remarks later.

Leave granted; debate adjourned.