These lower prices will be achieved by applying new and adjusted Statutory Price Reductions (SPR) for F1 medicines.
- The current five per cent SPR for F1 medicines listed on the Pharmaceutical Benefits Scheme (PBS), due to cease in 2020, is extended by two years to 2022.
- The SPR for medicines moving from F1 to F2 is increased from 16 per cent to 25 per cent from 1 October 2018, ending on 30 June 2022.
- A one-off 10 per cent SPR for F1 medicines listed on the PBS for 10 to 14 years is introduced. The first SPR will occur on 1 June 2018, and subsequent SPRs each April as medicines reach their 10-year anniversary, through to 2021.
- A one-off five per cent SPR for F1 medicines listed on the PBS for 15 years or more, is introduced. The first SPR will occur on 1 June 2018, and subsequent SPRs each April as medicines reach their 15-year anniversary, through to 2021.
Why is this important?
A sustainable PBS ensures that Australians have access to affordable medicines.
The Government will use savings delivered through the agreement to fund new and amended PBS listings. Initially, this will include antivenoms and national medical stockpile costs, and new and amended PBS listings in this Budget. In addition, the Government will put savings towards future new and amended medicine listings.
Who will benefit?
Australians will be provided with access to medicines in a fiscally responsible manner, ensuring a sustainable PBS.
In exchange for the savings generated, the medicines sector has certainty and stability because new PBS pricing policies will not be implemented without consulting the sector.
Promoting a positive environment for biosimilar medicines in Australia should, over time, lead to lower medicines prices for consumers.
How much will this cost?
This measure will save $1.8 billion from 2017–18 to 2021–22.