Radio interview with Minister Butler and Neil Breen, 4BC Brisbane Live - 27 April 2023

Read the transcript of Minister Butler's interview with Neil Breen on cheaper medicines.

The Hon Mark Butler MP
Minister for Health and Aged Care

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NEIL BREEN, HOST: Federal Health Minister, Mark Butler. Minister, thanks for your time on Brisbane Live. 


BREEN: There's something I don't quite understand is - patients will save, I can understand that - but how does the government save at the same time? 

BUTLER: Every time a box of tablets is handed over the counter at a pharmacy, the Commonwealth Government on behalf of taxpayers, pays the pharmacist a fee, something called a dispensing and handling fee. Whether that's one box of tablets with 30 in them, or one with 60 in them, they get the same fee. Moving to the idea that some of these very common medicines can be given with two months’ supply will cut the handling fees the taxpayers pay pharmacies as well. Now that will save the Commonwealth Government about $1.2 billion over the next four years. But I said yesterday that we don't intend to take a single dollar of that as a saving to the bottom line. Instead, we're going to reinvest every single dollar of that $1.2 billion into community pharmacies to help them provide more programs, more services to their patients. That's what they've been saying to me. They have wanted for a long time to use all of their vast skills as health professionals, in addition to the important work they do, filling scripts and dispensing medicine. So yes, there's a $1.2 billion save to the taxpayer, but it will be reinvested in the community pharmacy. 

BREEN: Yeah, I understand that. I'll get to the pharmacists a touch later. I understand that basic save. What I don't understand is this - I've written out an example for you: so, you know, a mythical person called Marjorie needs a $60 box of drugs every month for a heart condition. So the co-payment from her is $30. That means the government has to pay the other $30 for that box of medicine, plus the $7.80 dispensary charge every month, it's $37.80. But if she's only paying $30 once every two months now, that means there's an extra $30 bill to the Federal Government. 

BUTLER: Yeah, we've netted that out. We've accounted for that. This is going to result in a saving to the government. It's going to result in a very big saving to patients, as you said, I think -  

BREEN: But if you've netted it out with what like -  

BUTLER: With dispensing and handling fees that I talked about. 

BREEN: Yeah. 

BUTLER: That will be substantially reduced. They'll be halved as well. 

BREEN: But not for Marjorie, because Marjorie's drugs are going to cost you more? 

BUTLER: Over the course of this program rolling out, there is a clear save to the taxpayer in addition to the substantial saving to consumers, the big reduction in inconvenience and having to return to the pharmacy in many cases, not just for years, but for decades, to get exactly the same medicine. And one thing we haven't accounted for, but will undoubtedly occur as well, is there will be potentially millions fewer GP consults because people will only have to go back half as often to their GP to get a repeat script, often for a medicine they’ve been on for a very, very long period of time. 

BREEN: Yeah, I understand that. Look, I have to go once a year because I have to take a drug called Crestor for a hereditary cholesterol problem. And this is why I'm asking this question. I'm just trying to clear this up for the listeners, because there's a saving to customers and a saving to the government. But I can't see how both work because that drug that I take costs about $13 a month. And because it's not over $30, I pay the dispensing fee, that's correct, I pay the dispensing fee. So I'll make a saving of $7.80 every two months because I'll pay one dispensing fee every two months. And when I add that with what Marjorie has to do, you know, the fact that the second $60 box she gets every two months will now be fully paid for by the federal government, I can't find the $1.2 billion? 

BUTLER: I'm happy to come on and set it out for you in greater detail, but I can tell you, we've had the Treasury and the Finance Department working on this for the last few months through the Budget process. And I'm very confident in the numbers. And as you say, there's a whole range of different scenarios here. 

BREEN: There are. I can see that. 

BUTLER: Depending on the cost of medicines, many of these medicines cost less than the co-payment anyway. So, the taxpayer is not having to pay anything towards the cost of the medicines that is all paid for by the patient, all that the taxpayer ends up paying is the dispensing and handling fee. But you're right, in some cases, these medicines do cost more than the maximum co-payment -  $30 for a general patient or $7 for a pensioner - and the taxpayer foots the bill for the rest. But there's 325 medicines, there’s that many different permutations and combinations to all of this. All I can assure your listeners about is that is that our numbers people in the Finance and Treasury Department have worked very hard on these numbers and we're very confident that there will be a save to the Commonwealth taxpayer, but importantly for pharmacy that will all be reinvested back in the pharmacy operations. 

BREEN: And there's definitely going to be a saving for customers because I know from my own circumstance and I can see from the thing, all the documents you've put out, the customers will definitely save. 

Now, Minister, the pharmacists are howling mad. Now of course they don't want say to Neil Breen you only pay one dispensing fee every two months. They'd like him to pay once a month, so it adds to their cash flow. They'd also like their customers in the pharmacy once a month, and one of the big arguments they're making is that the care they can give their regular customers will fall down. What's your response to that? 

BUTLER: Let's just step back a quick second and set some context here. Pretty much every country we compare ourselves to has these arrangements in place and have had for many years - the UK, New Zealand, Canada and vast parts of the US, France, Germany, many others besides. So, it's very, very common around the world that where there are these medicines that people are on for extended periods of time, often for decades, maybe in your case, Neil, it's been that long? 

BREEN: That's correct. It's nearly two decades. 

BUTLER: At the end of the day, this is not a particularly sophisticated operation. The GP knows you're on the medicine, the medicine doesn't change, but you've got to go back at least twice a year for most of them to get a script and repeats to the GP. And then you have to front up to the pharmacy every single month and pay a fee every single month. Now in most of those countries I talked about for years, you've been able to get two or usually three months' supply of medicines. And five years ago, our own medicines authority, a body called the Pharmaceutical Benefits Advisory Committee, a group of experts that oversee the operations of the PBS, give us all the advice about what medicines should be listed on them and what conditions they should all have. They advised the former government to do exactly the same here, but they sat on that advice, they didn't do anything about it. 

Now I'm acting on it because I think it is important to give cost of living relief to 6 million Australians, we think, who will be able to move to two monthly scripts. People with chronic disease, often on low incomes, a lot of them will be pensioners, this will be a very substantial cost of living relief for them, it will halve the cost of their medicines. Importantly, though, it's also much more convenient for them. They don't have to continue to make GP appointments to get repeat scripts at the rate they have in the past. The last thing let me say, Neil, is that evidence from overseas tells us that where these arrangements are put in place, medication compliance can improve by as much as 20 per cent. You’ll know, your listeners will know, often when people go off their tablets or off their medicines, is at the end of a script when they run out of tablets, they can't get back in to see a GP, we all know it's hard to get into a GP right now, or because with busy lives you just don't get around to getting to the chemist. We also know that hundreds of thousands of Australians are going without medicines because they can't afford them. So cheaper medicines is not just good for the hip pocket, it's also good for people's health and for medication compliance. 

BREEN: And just before I let you go, and I totally understand all those points and I know I've kept a bit of your time this afternoon. Pharmacists around the country are crunching the numbers, I've spoken to several myself today. Some of them say their turnover will be down 1$30,000, $110,000 $180,000, depending on the size of the pharmacy. And they say the first thing they'll do is they'll let go One of the pharmacists who work for them, and possibly one of the assistants who work there as well. It’s going to cost jobs. Is the government - in the situation we're in in Australia at the moment with cost of living - comfortable with the fact this is going to cost jobs? 

BUTLER: Of course we're not. We're going to monitor this very closely. We're phasing this arrangement in over the course of this year and next year to try and mitigate that impact on pharmacies and make sure the arrangements change in a smooth manner. But also, just to give some context, the revenue reported by pharmacies is around $25 billion a year and that's been growing very fast. It's grown 30 per cent over the last four years. So, over the next four years you can expect that pharmacy revenue will be at least $100 billion, at least $100 billion over those four years, and the consumer savings amount to about $1.6 billion. This is in the order of 1 to 1.5 per cent of revenue, which is not nothing I certainly acknowledge that. But it's also not as much as I've heard some of the pharmacy group lobby suggest that it's going to be. We're going to monitor it very closely, we'll want to stay in contact. No one wants a thriving community pharmacy sector more than I do as the Health Minister. It's a critical part of our health system. But I have to say, Neil, this advice has been on the table for Commonwealth Governments for five years now. It will deliver massive cost of living relief to some of our most vulnerable Australians with chronic disease, it will improve their health, their medications compliance, and I don't think I, as Health Minister, in good conscience, could continue to walk past that advice as the former government had done. 

BREEN: Federal Health Minister Mark Butler, thanks so much for your time this afternoon on Brisbane Live.  

BUTLER: Thanks Neil. 


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