Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

I have a series of questions for the minister. Again, I'm supportive of the bill. I'm supportive of the stability and assurance that the bill provides to people who are beneficiaries of the PBS but also the companies that engage with the government in relation to this. Minister, can you confirm that the catch-up provisions in the bill are only meant to apply to those listed brands that have been on the PBS for 15 years?

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

I can confirm that, but it is to drugs, not brands.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

Is the intention of the bill to apply the catch-up provisions to drugs that have been listed on the PBS for 15 years?

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

That is correct. There is also ministerial discretion that's available.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

I might come back to that. It was reported in PharmaDispatch on 10 November 2021 that catch-up price reductions will contribute to something like $1.9 billion in savings in the course of five years because of the agreement between Medicines Australia and the federal government. In terms of calculating that saving—and I'm happy for you to present a different number if that's not correct—I'm wondering which of the brands listed on the PBS are subject to the cuts, because that clearly must have been included as part of the calculation.

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

The catch-up reductions are one part of the contribution to that $1.9 billion, and the schedule of drugs that it's calculated from will be made available in 2022.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

In some sense this goes to secrecy, which, as you know, I don't like very much. If you're not listing the drugs now, why is that the case? Why won't you at least let people see which drugs are going to be affected? That, in my view, is consistent with the general principle of setting up an arrangement that does give companies surety and, indeed, allows the users of the PBS to see what will and won't be affected.

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

The assessment will be made on each individual drug in 2022, so the schedule obviously can't be made available until that time.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

If you've calculated some cost savings, you must have done that on the basis of some calculations at least. I accept that there are a couple of moving parts to this, but you must have come to that number by doing at least some analysis.

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

It's a point-in-time calculation and it's a projection, and at the time the schedule is created is when the actual drugs that qualify will be determined.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

Again, this goes back to you having made a calculation. You must have made a calculation on the basis of something, so you must have some idea. That's the point I'm making. Obviously, I accept what you say—you're moving forward to the point where the drugs will be defined—but you have made a calculation, and I'm trying to understand the basis of that calculation.

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

If the schedule were created today and calculated on the basis of the calculations that we're talking about, it could potentially be very misleading as to which drugs are affected.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

So I understand your answer to be—I just want to make sure I've got it clear—you don't want to announce what you've based the calculation on because it may, in fact, change and would be misleading? Is that, essentially, the gist of what you're saying?

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

The projection can be made with reasonable accuracy because there are some drugs that are five years older and we know they're going to fall into the net, but there are a number, a smaller number, that are unconfirmed at this point in time.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

Is it possible for you to take on notice to table those that are known? I accept there are some unknowns, but could you take on notice the knowns?

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

We can take that question on notice.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

Will the cuts include cuts to listed brands on the PBS that treat mental illness, pain, hypertension and infection, and will any of these cuts apply to listed brands that have been on the PBS for less than 15 years?

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

All medicines on the PBS will be subject to some form of price reduction, and there is ministerial discretion available.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

The bill sets out a schedule that deals with changes at different points in time, one of which is 15 years. My question, really, is going to whether there is a possibility that some of the brands that are currently on the list but haven't been on there for 15 years will be affected by the 15-year change.

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

r HUME (—) (): The calculation will be made on the basis of whether the drug itself has been on the PBS for 15 years, not necessarily the brand of drug, but if a particular brand would be adversely affected then that would fall under ministerial discretion.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

So let's go to ministerial discretion. I understand there has been no guidance given on how that discretion will be exercised. Is that the case, or could you perhaps advise the chamber of some aspects of the guidance for ministerial discretion that's been published?

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

There is guidance that's been published—it's already available—but that is being updated, subject to the passage of this bill, and it's being done in collaboration with the sector.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

What sorts of criteria would apply to the brands that have been on the PBS for less than 15 years, in circumstances where the drug may have been on for less than 15?

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

The assessments are going to be made as to the extent of the use of the particular drug and the particular brand and whether the price reduction would cause that brand to leave the market. The assessments will be made at the time.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

As to the timing, when is it likely that a company might be able to make application to the minister for the minister to exercise discretion—if that indeed is the way in which the discretion might work?

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

The time frame is currently being negotiated with industry, but the intention is that it would be at the earliest opportunity.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

Has the department or the minister received any correspondence, which might pre-empt an application, indicating that there is a concern?

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

Yes. A limited amount of correspondence has already been received, from very few companies, and the minister is responding to that now.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

I'm not meaning necessarily to ask you to divulge the companies, but what sort of number are we talking? Is it three, five, 10—how many companies have approached the minister?

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

It's under five.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

Under five companies? Thank you very much. I presume we've had discretions in the past. You've talked about discretions that are already in place. Can you give me some idea of how that discretion has been exercised in the past, in terms of, perhaps, the number of applications versus the number of exemptions that have been made using the discretion.

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

Discretion has been used for about 90 brands in recent years, in those circumstances where those brands would otherwise have exited the market.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

PATRICK () (): That is 90 out of how many applications? I want to understand how the discretion falls.

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

That's not information I have to hand, but I can take it on notice for you.

Bill agreed to.

Bill reported without amendments; report adopted.