Helen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | Link to this | Hansard source

I rise to speak on the National Health Amendment (Pharmaceutical Benefits—Budget and Other Measures) Bill 2017. This bill puts in place a number of changes arising from the 2017 budget, including price disclosure arrangements, but it also represents a significant win against this government's continued attacks to make health more expensive for every Australian. With the 2017 budget, the government finally dropped their senseless measure to push up the price of prescription medications for every Australian by up to $5.

Labor will be supporting this bill because we know how important access to affordable health is, including the critical and life-saving medicines on the PBS. The price reductions enabled by this bill will deliver savings to the budget and price reductions to consumers. But we note serious concerns that the government is not being up front with Australians about whether they have already spent the savings that were negotiated as part of this bill.

The Pharmaceutical Benefits Scheme is one of the hallmarks of Australia's universal healthcare system, a system that is the envy of many countries across the world. Labor is incredibly proud of the PBS. It was first established in 1948 by the Chifley government and has been in place in various iterations ever since. Labor fought to create the PBS. We have fought to strengthen the PBS and we will always fight to protect the Pharmaceutical Benefits Scheme. It is only through the PBS that most Australians can afford to access the medicines that they need.

As I've flagged, there are serious concerns about whether the savings in this bill have already been spent. This bill represents around $1.8 billion in savings. But with the new listings in the budget and throughout the year, it's possible these funds have already been exhausted. The government needs to be up-front about this. Labor have repeatedly questioned the government on the existence of these savings, but they have failed to provide adequate information. We also note that the government tried for three years to increase the price of all PBS medicines, even for pensioners. Their 2014 budget measure would have increased co-payments by $5 for general patients and 80c for concessional patients. Only Labor's opposition in the Senate prevented the Liberals from implementing this policy, and, while they've taken it off for now, we know they will introduce it at the first opportunity. So, while we support this bill, we will continue to guard against the government's broader policies on medicines and Medicare.

This bill makes a number of changes to the pricing of medicines and drugs. The existing five per cent price reduction that applies for single brand drugs on the F1 formulary on the fifth anniversary of listing will be extended for another two years, now applying until April 2022. There is the introduction of two new anniversary price reductions for drugs on the F1: a 10 per cent reduction after 10 years of listing on the PBS, and a further five per cent reduction after 15 years of listing. On 1 June 2018, medicines that have already reached their 10-year or 15-year anniversary by that date will be subject to catch-up reductions, and, subsequently, anniversary reduction days will occur on 1 April of each year. The bill increases the price reduction that applies on listing the first additional new brand of a medicine. When a first new competing brand is listed alongside an existing brand of an F1 drug, both immediately have their prices reduced. This bill will increase the reduction from 16 per cent to 25 per cent.

The bill adds new provisions around ministerial direction for price reductions, with previous price reductions able to be taken into account before a statutory price reduction is applied. The bill also adds a new measure around price disclosure arrangements. These arrangements mean the drug companies must report data on sales, with the sale price information used to adjust the price for all brands of a medicine. The new measure provides that, after a medicine has had seven full cycles of price disclosure data collection and reduction days, the threshold for price disclosure price reductions will increase from the current 10 per cent to 30 per cent. Finally, the bill allows a company to list another version of its own original brand without being subject to a new brand price reduction.

While much of this bill focuses on enabling pricing changes for medicines and drugs, it also makes a notable change to the so-called Pharmacy Location Rules. Since 1990, rules have existed to limit how close a new pharmacy can be to an existing pharmacy. These rules have a sunset clause. In the Sixth Community Pharmacy Agreement, this bill will remove the sunset clause, meaning existing arrangements will continue post 2020. Labor will not stand in the way of this change.

In conclusion, as we've said, more affordable medicines are good for the budget and for consumers, and we acknowledge the work of the industry in agreeing to the savings. While we support this bill, we will continue to note our concerns that the government is not being up-front about whether the savings have already been spent. We also note that investment in medicines and the PBS must be made in tandem with broader investment with health. The government has consistently attacked health at every turn. Despite saying at the last election that he had 'listened to the community concerns around health', the Prime Minister has failed to drop a single part of his Medicare freeze. In fact, the government's freeze won't be fully lifted until 2020.

This has a particular impact in communities where bulk-billing is lowest, such as my home state of Tasmania, where only 73.9 per cent of unreferred GP visits are bulk-billed—more than 10 per cent lower than the national average. Average out-of-pocket costs to visit a GP in Tassie have now become more than $36, up almost $6 since the conservatives were elected. You can't boast about making medicines more affordable while keeping measures in place that are driving up out-of-pocket costs and making health less accessible for every Australian.

Labor is incredibly proud of the Pharmaceutical Benefits Scheme, and we will always fight for it. Today we tell the government that every dollar of savings generated by the passage of this bill must be re-invested in new medicines.

James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

I'd like to thank Senator Polley for her contribution and Labor's support for the bill. I also thank Medicines Australia, the Generic and Biosimilar Medicines Association and the Pharmacy Guild of Australia for their efforts in developing the agreements with the government.

I would also like to make particular mention of the contribution made by the Senate Scrutiny of Bills Committee. The committee's consideration of the bill included a number of questions on the proposed new power for the minister to exercise discretion in making certain pricing decisions. At the recommendation of the committee, additional information regarding the operation of these provisions has been included as an addendum to the explanatory memorandum. The addendum also contains further information in relation to transparency and scrutiny of written determinations made by a minister using discretional powers. I can confirm that these determinations will be made publicly available via registration on the Federal Register of Legislation. This is in addition to the publication on the PBS website.

I thank the senators for their interest and support, and commend the bill to the Senate.

Question agreed to.

Bill read a second time.