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1997-1998

2.2: Pharmaceutical benefits

The 1997-1998 Portfolio Budget Statements, informs Senators and Members of Parliament of the proposed allocation of resources to portfolios outcomes and their objectives and targets including the agencies within the Health and Family Services portfolio.

Budget measures

Objective

To provide timely, reliable and affordable access for the Australian community to necessary and cost-effective medicines.

Priority outcomes

1. The Schedule of Pharmaceutical Benefits includes only medicines which are clinically necessary and cost-effective.
2. Efficiency of the Pharmaceutical Benefits Scheme (PBS), including the listing processes and appropriate management of the cost of the Scheme.
3. Affordable and convenient access to pharmaceutical benefits.
4. The quality use of medicines, including their cost-effective use.

Strategies

1. Manage the Schedule, including timely inclusion of new drugs which are properly evaluated, cost-effective and appropriately priced, and regularly review the Schedule to ensure that it is current.
2. Ensure subsidy arrangements are efficient and provide greatest assistance for those in most financial need.
3. Regulate the distribution of pharmacies approved to supply pharmaceutical benefits.
4. Improve the quality use of medicines through community and health professional information and education.
5. Encourage cost-effectiveness in prescribing decisions (eg through general practice reforms) consistent with good clinical outcomes.
6. Ensure appropriate use of the PBS through compliance activities and measures to encourage user cost consciousness.
7. Systematically monitor and assess outcomes and trends for the purpose of program review and development.

Performance assessment: indicators and targets

Effectiveness

Indicator	Target	Information source and reporting frequency
Number of persons per approved pharmacy in Australia (Priority Outcome 3; Strategy 3, 7)	The ratio is similar to other developed countries ie in the range 3-5000 persons per pharmacy	Annual reporting from Health Insurance Commission (HIC) data
Number of persons per approved pharmacy in rural and remote areas compared to urban areas (Priority Outcome 3; Strategy 3, 7)	The ratio is similar for urban and isolated areas	Annual reporting from HIC data
Number of prescriptions supplied per capita (Priority Outcome 3; Strategy 2, 5, 7)	Changes from 6.83 PBS scripts per capita and 2.59 non government scripts per capita to be analysed for underlying drivers	Quarterly PBS statistics using deidentified HIC data
Percentage of cost of PBS prescriptions covered by the Government (Priority Outcomes 2,3; Strategy 2, 5, 6, 7)	Not applicable	Quarterly PBS statistics using deidentified HIC data

Efficiency

Indicator	Target	Information source and reporting frequency
PBS expenditure as a percentage of Gross Domestic Product (Priority Outcome 2; Strategy 5, 6, 7)	Significant changes from current expenditure as a percentage of GDP to be analysed	HIC and Australian Bureau of Statistics data Annual
Time taken to process new applications for listing in the Schedule (Priority Outcome 2; Strategy 1)	All applications received by the due date to reach the next Pharmaceutical Benefits Advisory Committee (PBAC) meeting All positive PBAC recommendations reach the next Pharmaceutical Benefits Pricing Authority meeting All positive recommendations are included in the earliest available Schedule excepting delays due to the applicant	Structured feedback through the Divisional Business Plan Quarterly Internal monitoring systems
Percentage of benefits listed following evidence based assessment of comparative effectiveness and cost (Priority Outcomes 1, 2; Strategies 1, 4, 5)	All new applications are selected strictly on the basis of comparative effectiveness and cost-effectiveness	Structured feedback through the Divisional Business Plan Quarterly HFS data

Quality

Indicator	Target	Information source and reporting frequency
Justifiable complaints about the operation of the PBS (Priority Outcomes 1, 3, Strategy 2, 3, 6, 7)	Mechanisms are in place to monitor and respond to justifiable concerns	Structured feedback through the HIC customer surveys Weekly reports of PBS Information Line and monthly reports of Ministerial correspondence
Evidence that education on the quality use of medicines (QUM) has a positive effect on the target groups (Priority Outcome 4; Strategy 4, 6, 7)	QUM activities are evaluated for effect	Monitoring by Pharmaceutical Health and Rational use of Medicines (PHARM) Committee

Equity

Indicator	Target	Information source and reporting frequency
Percentage of PBS outlays directed to concessional and general patients (Priority Outcome 3; Strategies 2,6)	PBS benefits are targeted to those most in need	Structured feedback through the HIC and the Divisional Business Plan Quarterly Quarterly report
PBS patient expenditure as a percentage of income for concessional and general patients (Priority Outcome 3; Strategy 2)	PBS benefits are targeted to those most in need	Analysis by National Centre for Socio­Economic Modelling (NATSEM) from HIC data

Performance assessment: evaluation

Pharmaceutical Benefits Scheme: In response to concerns expressed in the Industry Commission Report on the Pharmaceutical Industry about PBS listing processes impacting on the Industry, the Government asked the Auditor General to proceed more quickly with a scheduled performance audit of the PBS. The performance audit of the PBS commenced in November 1996 and will report to Parliament in October 1997.

How the program is resourced: reconciliation of appropriations to the program and summary of portfolio outlays (Excel 73 KB)

Variations to Program Outlays 1996-97 to 1997-98 (Excel 31 KB)