New figures confirm PBS spending barely growing

December 15, 2005

Spending on the Pharmaceutical Benefits Scheme has plummeted to a level well below the inflation rate, the Federal Government's Mid-Year Economic and Fiscal Outlook document confirmed today.

The forecast for PBS spending growth in 2005-06 in last year's Budget was 7.4 percent, but this has been radically altered by Treasury today to below 2.2 percent.

The new figures verified by Treasury should put to rest any suggestion that the PBS was growing "out of control", the Chief Executive Officer of Medicines Australia, Kieran Schneemann, said today.

It is now clear that the 1 January increase in co-payments - which will cut the issuing of scripts by 15 million over the next five years - and the 12.5 percent price cut decision which took effect on 1 August, have had a significant effect.

That effect is likely to become greater over time, with other forecasts suggesting PBS spending may actually be heading downwards for the first time since records were kept.

"We are concerned how the community might be affected by reduced Government spending on critical medicines, especially if the Government goes ahead with new reforms as has been suggested in the media recently," Mr Schneemann said.

"As the Opposition spokeswoman for health, Julia Gillard, said today, it is vitally important that the worth of the PBS and any reduction in spending must be considered in line with the impact on the overall health system and the ability of patients to afford their needed medicines."

According to the Budget, the estimate of PBS spending for 2005-06 was $5.774 billion. This was a predicted increase of 7.4 percent on the estimate of 2004-05 spending of $5.375 billion.

Treasury's Mid-Year Economic and Fiscal Outlook revises down that estimate of PBS spending in 2005-06 by $283 million (page 31), suggesting that the new expected figure for this financial year is $5,491 million.

By comparing the Budget estimate with the MYEFO estimate, Treasury now believes that PBS spending will grow by only 2.16 percent.
-end-


Research Australia

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