The Department began implementing changes to the Pharmaceutical Benefits Scheme to provide Australians with continued access to new and expensive medicines, while ensuring the Pharmaceutical Benefits Scheme remains affordable into the future. A major achievement was the implementation of streamlined authority arrangements and price disclosure arrangements.
The Department implemented streamlined authority arrangements on 1 July 2007 for approximately 200 of the 450 Authority Required items listed on the Pharmaceutical Benefits Scheme. These arrangements reduce the administrative burden on prescribers, allowing them to spend more time with their patients by eliminating the need to contact Medicare Australia before prescribing.
The Department also implemented guarantee of supply requirements: any supplier that lists a new brand of an existing medicine, or offers a price reduction, must guarantee supply of that brand for up to 24 months.
On 1 August 2007, the Pharmaceutical Benefits Scheme was split into two separate formularies with different pricing arrangements for single brand and multiple brand medicines.
The Department worked with pharmaceutical companies, Medicines Australia and the Generic Medicines Industry Association, to ensure the effective operation of the new price disclosure arrangements. These new arrangements will provide better value from competition, by ensuring the prices of Pharmaceutical Benefits Scheme medicines more closely reflect the price at which they are sold to pharmacists. As at 30 June 2008, 18 drugs were subject to price disclosure.
During 2007–08, the Department finalised arrangements to give effect to the structural adjustment package for community pharmacies relating to the mandatory Pharmaceutical Benefits Scheme Reform price reductions which commenced on 1 August 2008.
On 1 July 2007, an incentive of 40 cents for each prescription processed using PBS Online came into effect. An incentive of $1.50 to dispense a substitutable, premium-free brand and an incentive which increases pharmacy mark-ups and dispensing fees came into effect from 1 August 2008. Through this adjustment package, pharmacists receive the remuneration agreed under the Fourth Community Pharmacy Agreement and patients therefore continue to have access to the medicines they need.
The Community Service Obligation Funding Pool aims to ensure that all Australians can access the full range of Pharmaceutical Benefits Scheme medicines from their community pharmacy, when they need them. It achieves this by financially assisting wholesalers to deliver Pharmaceutical Benefits Scheme medicines to community pharmacies, in a timely manner.
The Community Service Obligation was established on 1 July 2006 under the Fourth Community Pharmacy Agreement between the Australian Government and the Pharmacy Guild of Australia. During the year, the Department successfully finalised the transfer of the Community Service Obligation Funding Pool to the Community Service Obligation Administration Agency, which is responsible for undertaking payment calculations, monitoring distributors’ performance and managing a complaints and sanctions framework.
Another major achievement was the listing of five high costs drugs on the Pharmaceutical Benefits Scheme, and the extension of six already-listed high cost drugs. These drugs help extend or improve the lives of many Australians who would otherwise not be able to afford to benefit from them. Recent listings included Atomoxetine (Strattera®) for the treatment of attention deficit hyperactivity disorder, Ranibizumab (Lucentis®) and Docetaxel (Taxotere®) for the treatment of prostate cancer.
Financial assistance under the Life Saving Drugs Program is provided for access to drugs to treat rare inherited enzyme deficiencies. During 2007–08, the Department established arrangements for access to Galsulfase (Naglazyme®) under the program, to help people with Mucopolysaccharidosis Type 6, a progressive disease that leads to dysfunction in a range of organs and ultimately severe disability.
The Department successfully provided for optometrists accredited to prescribe under state or territory law, to apply for approval as Pharmaceutical Benefits Scheme prescribers; and for certain Pharmaceutical Benefits Scheme eye medicines to be listed for optometrist prescribing. These arrangements came into operation on 1 January 2008. Around 300 optometrists have been approved as Pharmaceutical Benefits Scheme prescribers and the number is expected to grow annually. This initiative will improve access to eye medicines and contribute to eye care for the community, particularly for older people, lower income groups and people in rural areas. Consistent with a multidisciplinary approach to care, the changes will help to make better use of optometrist services, reduce delays in access to eye treatments, support continuity of therapy and reduce costs to consumers.
During 2007–08, the Department continued to support the provision of seven programs and services under the Fourth Community Pharmacy Agreement. This included implementing the Diabetes Pilot Program, and the Dose Administration Aids and Patient Medication Profile Programs. The pharmacist support and counselling provided through the Diabetes Pilot Program will assist patients with poorly controlled Type 2 Diabetes Mellitus to improve the management of their condition and their use of associated medications. The Dose Administration Aids and Patient Medication Profile Programs will help to reduce medication-related hospitalisations and adverse events, through improving medication management adherence for people in the community, including those on multiple medications. The programs will trial and evaluate the costs and benefits of Dose Administration Aids and Patient Medication Profile provision through community pharmacies to community based patients.
The Department, through Diabetes Australia, manages the National Diabetes Services Scheme, which ensures that people with diabetes are better able to access necessary products and services. A major achievement in 2007–08 was the establishment of 355 community pharmacies as new National Diabetes Services Scheme outlets, increasing the total number of pharmacies participating in the scheme by 24.4 per cent to 1,810.
Focus in 2008–09 will be on subsidising the cost of insulin pumps for people under the age of 18 with type 1 diabetes. Insulin pumps significantly improve the health of users and reduce the need for parents to supervise the management of their children’s diabetes. A means tested subsidy and pump supply will be managed through a grant agreement between the Department and the Juvenile Diabetes Research Foundation. Around 700 children will benefit from this initiative over the next four years.
While the Department saw a number of successes during the year, there was a delay in implementing cost recovery arrangements for the Pharmaceutical Benefits Scheme.
The 2005–06 Budget announced that the costs associated with the listing of products on the Pharmaceutical Benefits Scheme and the National Immunisation Program would be recovered from the pharmaceutical industry from 1 July 2007. Requests to list new medicines or vaccines, or to vary the listing of existing products, involves a resource intensive process which includes the independent evaluation of complex submissions by the Pharmaceutical Benefits Advisory Committee, its subcommittees and the Pharmaceutical Benefits Pricing Authority. Amending legislation was not introduced in the Parliament before it was dissolved prior to the 2007 Federal election and the proposal lapsed. During this time the Department continued consulting with the pharmaceutical industry about the implementation of cost recovery.
The 2008–09 Budget proposed that cost recovery arrangements would commence in the 2008–09 financial year. Following this announcement, the Department finalised the fee model and undertook a series of information sessions with industry representatives and peak bodies about the implementation of the cost recovery arrangements. The relevant legislation was passed by the House of Representatives but did not pass through the Senate.
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