Healthy Skepticism Library item: 504

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Publication type: news

Allen L.
Gillard's $1bn plan for drugs
Australian Financial Review 2004 Aug 25

Full text:

A federal Labor government would re-educate doctors to prescribe cheaper drugs in a move that could shave up to $1 billion a year off the $6 billion cost of the pharmaceutical benefits scheme.

Labor would push for better prescribing practices and more training, opposition health spokesman Julia Gillard told a medical conference in Sydney yesterday.

She said there were concerns about “leakage” in the PBS when clinicians prescribed costlier new drugs over older drugs which were often just as effective, cheaper and subsidised by the PBS.

“If you look at the current PBS system . . . there are concerns already about leakage factors . . . which can be addressed and generate savings which can be used to moderate [patient] co-payments,” she said.

Academics believe better prescribing practices on health grounds could also cut PBS costs.

Ms Gillard said patient education was also a practical way to save money and that Labor would invest in quality use of medical programs to ensure people were taking and storing medication appropriately.

The chairman of the Pharmaceutical Benefits Advisory Committee, Lloyd Sansom, said yesterday some commentators believed the problem of leakage could cost the government as much as 25 per cent or $1 billion a year.

Professor Sansom said increased transparency of the PBS would help doctors make better-informed decisions when they prescribed drugs.

Health Minister Tony Abbott, also speaking at the conference, said the increasing cost of the PBS was a concern.

“But if Australia keeps up its strong economic performance over the past decade, whatever cost increases we face as a result of the increasing cost of drugs to our community we would be able to manage it,” he said.

“Our system is far from perfect, but it is, for all its faults, the best health system in the world and the way to make it even better is not to turn it upside down, not to reform it out of existence, not to revolutionise it, but to build on its strengths.”

Mr Abbott said he did not know what Ms Gillard was talking about in terms of “leakage”.

“[But] In terms of fraud in our health system, the estimates are that it’s less than 1 per cent.”