Radio interview with Minister Butler and Gary Adshead, 6PR Mornings - 10 August 2023

Read the transcript of Minister Butler's interview with Gary Adshead on cheaper medicines.

The Hon Mark Butler MP
Minister for Health and Aged Care

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GARY ADSHEAD, HOST: A crucial showdown over the Federal Government's plan to create a 60-day dispensing system at pharmacies, effectively allowing people to buy two months’ worth of medicines rather than one month supply, is about to play out in the Senate this morning. Now we are hearing that there's been some developments in recent minutes and we're trying to get across that as to whether it will go to a vote. Now, the Liberal and National’s Coalition are trying to block the plan that was as of earlier this morning. So, it will come down to a handful of crossbenchers in the Senate, like Jacqui Lambie and David Pocock. Health Minister Mark Butler has been negotiating with the senators overnight, and I spoke to him a short time ago. And as we do this, we will try to get on top of what the latest developments are. But this is Health Minister Mark Butler, who joined me a short time ago.
ADSHEAD: Okay. Have you got the numbers in the Senate do you believe?
BUTLER: Look, the crossbench always keeps their cards pretty close to their chest as you get close to this vote. But I've had really good engagement with all of them about what this does for patients - halving the cost of medicines for 6 million patients who are on the same medicine, often for decades or the rest of their lives, but currently have to go back to the pharmacy every 30 days. So it’s good for their hip pocket, but also what it does to free up millions of GP consults - which your listeners would know are desperately needed out there for serious health conditions - rather than clogging up GP rooms just to get in for a routine repeat script. So, it's a really good measure for individual patients, a great measure for the health system, which is why every patient group, every doctors’ group has supported it. So, we think we've made the case. This has been a recommendation from the medicines experts who manage our Pharmaceutical Benefits Scheme now for five years. The former government chose not to do it. They were opposed then, as was the powerful pharmacy lobby, and they're trying to knock it off again this morning.
ADSHEAD: So, I know that the vote is imminent, but you can't tell us whether you're confident that you've got Jacqui Lambie, David Pocock, Lidia Thorpe, their support?
BUTLER: Look, I never take support for granted. They'll be being lobbied by the powerful pharmacy lobby, by the Coalition who will seek to block this measure again, as they did five years ago. But I think we've made the case of how important this is. It just makes sense. And it's why pretty much every country we usually compare ourselves to also allows 60-day scripts or even 90-day scripts, often for ongoing health conditions. 30-day scripts made a lot of sense decades ago, when generally you'd be going to the doctor because you had a single episode of illness: so, an infectious disease, or you fell off your ladder, and you had a single course of medicine. But nowadays people are more likely to be on blood pressure meds, cholesterol meds, a whole range of other medicines for ongoing health conditions for years or decades, or even the rest of their lives. And that's why around the world we've re-geared medicines policy to reflect that fact. People shouldn't need to go back every month, shell out money, shouldn't need to go back to GPs as often as they do just to get a routine repeat script.
ADSHEAD: Are the Pharmacy Guild just completely fabricating a suggestion that 20,000 jobs would be lost, mass closures, particularly in the regions, are you accusing them of just fear mongering and lying about that?
BUTLER: They use a report that they commissioned from Henry Ergas, who is a long-standing economist. And they try to use this: a number of pharmacies that will close because of this measure. Well, Mr Ergas himself wrote a letter to the Financial Review saying that the numbers that the Guild and also the Coalition were using - in his words - were “completely incorrect”. We also know several years ago when the former government made a pretty modest adjustment to medicines policy, when Sussan Ley was the Health Minister, the Guild again got that same economist, Henry Ergas, to do a report. And surprise, surprise, that report said: hundreds of pharmacies would close, there'd be widespread job losses and none of it happened. Instead, what's happened since is hundreds of pharmacies have opened. It's a very profitable sector. This report that the Guild released a little while ago showed that the average gross profit of a pharmacy was 34% higher than any other sector I can think of that delivers private medical services, revenue grew -
ADSHEAD: It’s possible that this would affect their revenue in a large way, though, isn't it, you know, dispensing is their revenue?
BUTLER: We save about $1.2 billion from this measure as the Commonwealth Government, we're reinvesting every dollar back into pharmacy. I made that commitment and I'm going to deliver on that commitment. They'll also lose some money from patient contributions. But let's put that in context. Over the last four years, pharmacy, on its own figures, earned $100 billion. Now, let's assume it earns that over the next four years, even though it grew by 30% over the last four. Even if there's no more growth, this measure will impact their revenue to the tune of about 1 or 2% on our costings that Treasury has done for us. So, 1 or 2% of their revenue across the next four years, when they grew by 30% over the last four years. This is a highly profitable sector, as I said, 34% average gross profit. It's protected from competition. You're not allowed to set up a pharmacy in the area where there's an existing pharmacy. No other part of the health sector has that protection from competition. And can I say this, Gary, since I announced this measure in three months, we've had twice as many applications to open new pharmacies as we had last year, twice as many as we had last year. So clearly, people out there who want to open pharmacies think there's still money to be made.
ADSHEAD: I know that you were particularly angry when you saw the claim that every single aged care resident would be up for an $800 a year cost for their medicines to be packed because of this move, what do you say to it?
BUTLER: I was furious because the pharmacy lobby and the Coalition know full well that aged care facilities are funded by taxpayers to manage the medicines needs of their residents, and that includes packaging it into Webster packs. So, they're funded for that. And there is a clear legal prohibition against residents being charged for that service because facilities are already funded. So, the pharmacy lobby knows that, the Coalition should know that - they were in government for the last decade. And I was furious because there have been a whole bunch of base, self-serving scare campaigns over the last few months. But this was a new low to frighten a couple of hundred thousand of our most vulnerable members of our community: 200,000 people who live in residential aged care facilities and just need some support and dignity in their final years. To try to frighten them when they should have known that there is a clear prohibition against residents being charged was, for me, a new low.
ADSHEAD: Just out of interest, did it take you by surprise that the Pharmacy Guild's kind of language around, you know, pharmacists killing themselves, pharmacists losing their homes? Did that level of language over something like this surprise you? It's pretty volatile.
BUTLER: It did. The President of the Pharmacy Guild, within a few hours of me announcing it, said that some pharmacists had already been declared bankrupt in less than three hours from the time I announced it, which I think to any listener who reflects on that for 3 or 4 seconds is patently ridiculous. And as I said, I sort of ran through the profit rates in this sector. I ran through the fact that I've had twice as many applications for new pharmacies in the last three months as we had for the same period last year. So, you know, this is a very powerful lobby group. I think people who understand health policy in Canberra know this is a very powerful lobby group. They've clearly worked very hard on the Coalition, which is why they got the Coalition to oppose this measure five years ago. And just think about this, Gary: If the Coalition had introduced this measure five years ago, hundreds and hundreds of millions of dollars that these patients with ongoing health conditions would not have had to be paid. Instead, they've shelled out all that money when the medicines experts said they shouldn't have had to.
ADSHEAD: So, they want you to push pause on the policy, of course, we'll know whether it gets through the Senate soon enough. What will happen if it doesn't pass the Senate? What's your next move?
BUTLER: First of all, this is a bit of spin on the part of the Coalition. I've got the motion before me from Senator Ruston who's the Shadow Health Minister for the Coalition, Pauline Hanson, and a couple of other senators. It doesn't say push pause, it doesn't say a six-month delay, which I've seen in the media. The motion is clear: it wants to disallow this measure altogether. So, they opposed it five years ago, they oppose it now, any idea that they're going to somehow support it in six months just doesn't survive the light of day. This measure - if it’s supported by the Senate today - this motion from the Coalition and Pauline Hanson – will block access to cheaper medicines for 6 million Australians, it will continue to clog up GP consulting rooms at a time when we desperately need patients to be able to get in, after three years of pandemic, desperately need them to be able to get in to see their GP, not just for a routine repeat script, but for serious health conditions that are much aggravated by the last few years of the pandemic.
ADSHEAD: All right, well potential double disillusion situation is growing, would you try again, a bit like the housing fund, would you try again if this gets knocked back? Parliament rises for three weeks after today.
BUTLER: Obviously, if this gets blocked by the Senate, it calls into question a whole range of investments I’ve committed to making, using the $1.2 billion that is saved by the Commonwealth. This is a very serious issue before the Senate today. I know senators take it seriously. I know health groups and doctors’ groups take it seriously, which is why, again, they’re urging the Senate to support this measure. Every patient group I can think of has come out backing this measure. They know it’s good for the people they represent – their hip pocket – but they know it’s also good for the health system.
ADSHEAD: We’ll wait and see. Thank you very much for joining us today, Minister.
BUTLER: Thanks, Gary.


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