Healthy Skepticism Library item: 1510

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Publication type: Journal Article

Frenkel J, Harvey M, McManus G.
$800m boost for cheaper medicine
The Herald Sun 2005 May 9;

Full text:

A HI-TECH plan to boost the use of cheaper generic drugs underpins an $800 million Budget assault on runaway costs of the Pharmaceutical Benefits Scheme.

New computer software to be installed in doctors’ surgeries will automatically select the cheaper medicine — not expensive brand name drugs — when GPs give prescriptions.
Treasurer Peter Costello confirmed yesterday tomorrow’s Budget would include new measures to contain taxpayer-funded subsidies for vital medicines.

Mr Costello will apply the finishing touches today to a budget primarily designed to pay for the Coalition’s big-spending election promises.

A big surplus — possibly as high as $10 billion — is expected in a bid to persuade the Reserve Bank not to lift interest rate rises.

The Budget is expected to:

OVERHAUL welfare rules to allow recipients to earn more from work before they start losing benefits.

MAINTAIN political pressure on Premier Steve Bracks by dangling $560 million for the Scoresby Freeway — only if tolls are removed.

PROVIDE relief for 640,000 high income earners via reductions to the unpopular superannuation surcharge.

SHELVE plans to restrict the number of subsidised IVF treatments for older women.

The $800 million Budget attack on expensive brand medicines comes amid concern at the surging $5.6 billion cost of the PBS.

In addition to replacing GPs’ software, the Government will cut the amount it pays for generics by 12 per cent to slash more than $740 million from the scheme over the next four years.

Funding for a new glaucoma treatment is also expected to generate PBS savings of about $20,000 a year when patients switch from the older, more expensive product.

More than $100 million will be pumped into after-hours GP services in a bid to deflect criticism of increases to Medicare safety net budget.

Most of the money will be swallowed up in pay incentives for doctors, with $10 bonuses for treating patients between 8pm and 8am on weeknights.

Ten new after-hours clinics located at public hospitals will receive grants of up to $200,000, while existing after-hours services will also be subsidised.

One clinic will built at the Royal Children’s Hospital, while Sunshine, Geelong and Williamstown Hospitals could also receive funding, the Herald Sun has learned.

On the welfare front, single parents will have to start looking for part-time work once their children reach school age.

Single parents now only have to seek work once their youngest child turns 13 and benefits cut out altogether when they turn 16.

Mr Costello also confirmed yesterday that low income earners would be allowed to earn more from employment before losing welfare benefits.

There will also be suspension of the dole for those who do not turn up to interviews.

The Treasurer warned the days of single mothers surviving a decade or more on benefits alone were over.

“The idea that you couldn’t work until your youngest child turned 16 is outdated and outmoded,” Mr Costello said.

But Mr Costello said the Budget would provide more out-of-school hours child care — as many as 80,000 places — to make it easier for single parents to work.