Healthy Skepticism Library item: 1712

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Metherell M.
Patients face drug rations
Sydney Morning Herald 2002 Mar 9

Full text:

The Federal Government is considering a crackdown on prescription drugs worth up to $1 billion in this year’s Budget, and the Prime Minister yesterday gave his strongest warning yet on the surging cost of subsidised drugs.

John Howard said the Government had to ensure “proper constraints and proper disciplines because the cost of prescribing these drugs on the so-called free list can grow exponentially if we’re not careful”.

The Finance Department is understood to be pressing the Health Department to introduce measures over four years to slash yearly spending on the Pharmaceutical Benefits Scheme (PBS) by $1 billion a year by 2006.

This would amount to an effective freeze on PBS spending, which last year grew by 20 per cent to more than $4 billion. The scheme is under continual strain because of the growth in new drugs costing thousands of dollars a year per patient.

Among measures likely to be considered – which will provoke fresh protests from patient groups and doctors – are:

Tighter restrictions on approval of expensive new drugs for subsidies, other than those with unique life-saving properties.
Dropping subsidies for older, superseded drugs.
More screening of the way in which doctors prescribe drugs and tougher controls on when they can write scripts for some expensive drugs.

Mr Howard acknowledged that the Government was looking at budgetary “restraints” when he was asked about the $1.1 billion cost of Australia’s part in the war against terrorism.

He played down the suggestion that cuts were needed to prescription drugs, saying it was rather “making sure that we don’t incur any additional expenditures that aren’t absolutely essential”.

Mr Howard said the Government “won’t be punishing anybody” on the issue of pharmaceutical benefits.

“But obviously, with something as generous as the PBS scheme, we have to make sure that there are proper constraints and proper disciplines because the cost of prescribing these drugs on the so-called free list can grow exponentially if we’re not careful,” he told Melbourne radio.

“It’s quite reasonable to put some kind of disciplines on their use. We don’t want a situation where a drug is prescribed as something of first resort.”

Mr Howard’s comments came a day after a forum called by patient groups urged a wide-ranging review of drug subsidies and expressed concern about the difficulties in securing subsidies for effective new drugs.

A report prepared for the forum by Canberra University said there was a widespread view that Australia had been “very successful” in securing low prices for its prescribed drugs.

The Opposition’s health spokesman, Stephen Smith, said that if the Government had not “gambled away” $4 billion to $5 billion on foreign exchange trading it would not have to be looking now “at crude cost cutting measures for the PBS”.

The Australian Medical Association said the increase in pharmaceutical costs was a worldwide trend and would continue. “But Australia still rates well against countries such as the United Kingdom, the United States and Japan,” the national president, Dr Kerryn Phelps, said.

The Government is likely to face heavy pressure from the pharmaceutical industry over any cuts.