1997-1998
Australia's Commonwealth Department of Health and Family Services, Budget Document 1997-98
The Federal Government has decided on a number of measures to ensure the ongoing value-for-money of the Pharmaceutical Benefits Scheme (PBS), and to support quality, cost-effective prescribing of medicines under the PBS.
Fact Sheet 7
Further steps to ensure sustainable growth in the Pharmaceutical Benefits Scheme
The Federal Government has decided on a number of measures to ensure the ongoing value-for- money of the Pharmaceutical Benefits Scheme (PBS), and to support quality, cost-effective prescribing of medicines under the PBS.National Prescriber Service
The Government will provide around $22 million over the next four years for a National Prescriber Service aimed at helping doctors improve the way they prescribe medicines. This service, to be in place by 1 March 1998, will be managed by a board made up mainly of doctors and government representatives, which will operate at arm's length from the Government.
The service will give doctors feedback on their individual prescribing patterns and provide information about medicines, as well as advice on making good prescribing decisions. It will manage a grants program to identify and develop effective approaches to quality prescribing.
Savings will be achieved through reductions in over prescribing and inappropriate prescribing of drugs -- the net effect of this measure is expected to be savings of just under $24 million over the next four years.
Extension of premium price strategy
The Government has decided also to extend the practice of price premiums beyond individual brands of drugs with identical chemical make-up to groups of medicines which have very similar clinical activity.
It is important to ensure that the people who use the health care system -- both doctors and patients -- take cost into account in reaching treatment decisions. By encouraging greater price competition between suppliers of drugs and by making doctors and patients more aware of costs, this Budget measure is expected to yield an estimated $561 million in savings over the next four years.
From 1 February next year, for each of a number of therapeutic groups containing very similar drugs, a base price will be established. The Government subsidy will be on the basis of this price, and any price difference for a more expensive drug in the group will be paid by the patient. Based on experience with pricing of alternative brands, the competition in the market place will result in premiums in the order of $2.00.
Six drug groups will be affected: ACE Inhibitors, Calcium Channel Blockers, and Beta Blockers, all used to treat hypertension; Selective Serotonin Re-uptake Inhibitors (SSRIs), to treat depression; some drugs for lowering blood cholesterol; and H2 receptor antagonists for the treatment of ulcers.
Implementation will be based on professional and clinical advice, and there will be a two-year education campaign incorporating a help-line service.
Funding of $4 million in 1997-98 will be provided to assist pharmacists with the costs of properly advising the community about the details of the measures and other aspects of cost-effective use of medicines, including the availability of alternative brands.
Top of page
Eligibility for treatment benefits
A small number of war veterans will receive treatment benefits through the Repatriation Pharmaceutical Benefits Scheme by making the assets test limit for the pension the same as the income test limit.
Delisting of some drugs for less serious conditions
The Government has decided also to delete from the Schedule of Pharmaceutical Benefits a number of drugs used to treat less serious medical conditions, resulting in estimated savings in the order of $112 million over the next four years.
The schedule lists drugs for significant medical conditions -- the medicines to be deleted are generally used to treat minor ailments, and most can be bought over the counter for between $2.45 to $9.65.
The drugs proposed for de-listing are:
- a number of medicines for the treatment of common stomach problems;
- an anti-inflammatory liniment for pain relief of sprains and muscle strains; and
- a number of preparations that used to be mixed by pharmacists, but are now mostly being supplied in a pre-packaged form by manufacturers.
PBS growth
Over the period 1991-92 to 1995-96, the Pharmaceutical Benefits Scheme experienced average real growth of 15.07 per cent a year. The measures introduced by the Government in the last two budgets are expected to result in average real growth of 7.86 per cent a year over the period 1996-97 to 2000-01.
Net savings resulting from PBS Budget measures
| Budget Measure | 1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
| National Prescriber Service | 0.4 | -8.1 | -8.0 | -7.9 |
| Therapeutic group premiums | -41.4 | -157.5 | -173.8 | -188.7 |
| Deletions from the PBS | -10.9 | -29.7 | -33.4 | -37.6 |
Contact: David Graham, Assistant Secretary, Pharmaceutical Benefits Branch, Health Benefits Division. Phone: (06) 289 7085
Top of page
