Dissenting Report from the Australian Labor Party
Labor Senators do not
see merit in this bill and oppose it in its entirety without amendment.
The increased cost of
medicines and changes to the Pharmaceutical Benefits Scheme (PBS) Safety Net
will see reduced adherence to medicine regimes.
The Bill has the
potential to negatively impact on patients’ health and result in significant
additional costs to the health system.
This position is
supported by the Community Affairs References Committee’s inquiry into
Out-of-pocket costs in Australian healthcare with its report recommending that
the Government not proceed with further co-payments.
The Community Affairs
References Committee also recommended that ‘the Government review the impact and
effectiveness of existing safety nets to ensure that current safeguards provide
adequate protection of the most vulnerable in the community’.
The Government should
not pursue changes to the PBS Safety Net that will make it more difficult to
access and add to the healthcare costs of vulnerable Australians.
Taken with the
pressure from additional out-of-pocket expenses resulting from Medical Benefits
Schedule (MBS) co-payments and changes to that safety net, as well as changes
to income support, the changes proposed in this Bill will have a deleterious
effect on the health of vulnerable patients, especially the aged and
individuals and families on low and middle incomes.
Labor Senators note
the Parliamentary Joint Committee on Human Rights' concern that the Bill may
result in retrogressive consequences, especially for people accessing or reliant
upon social security payments.
Labor Senators are
extremely concerned that the Department of Health was unable to provide a
submission to the Committee before its public hearing and note this limited the
ability of Senators to question the Department on its evidence. Labor Senators
are concerned by the trend developing in this respect and hope it will not
develop as a long-term issue.
The bill unnecessarily targets pensioners
and low and middle income earners
The Consumers Health
Forum provided the Committee with evidence of more patients not filling their
prescriptions due to cost. The CHF cited ABS data that 9 per cent of adults
delay or do not collect their prescriptions due to cost. Particularly, CHF
There is also a growing body
of evidence from Australia and other countries that a number of groups in the
community are particularly vulnerable to the impact of rising out-of-pocket
costs, including: people with chronic illness; people on low incomes; people
living in rural and remote areas; young families; and older Australians.
The CEO of the Public
Health Association Australia stated that the measures are inequitable and will
affect society’s most vulnerable members. Mr Moore stated:
The people to whom this is
most important are the vulnerable, such as Aboriginals and Torres Straight
Islanders, people from low socio-economic backgrounds or from non-English
speaking backgrounds and the elderly.
The Pharmacy Guild of
Increases to PBS co-payments
and safety nets may discourage patients from purchasing their prescribed
medicines, leading to non-adherence to a medication regime... Any increase in
price signals should be accompanied by a greater commitment to the funding of
well-targeted medication management and support services, focused on those
patients in greatest clinical need who have the highest risk of non-adherence
to their medicines.
Society of Australia provided the Committee with evidence that it:
is concerned that patient
co-payments, even before the increases proposed in this Bill take effect, have
reached such a high level that there is a danger of patients foregoing some of
their necessary medications due to cost...
Coupled with the proposed MBS
co-payment for GP visits, out-of-hospital pathology and diagnostic imaging
services, vulnerable patients may be forced into a situation where they need to
make a financial decision about seeking medical attention or continuing with
their medications instead of focusing on their health.
This evidence is
supported by evidence from COTA that:
Not filling a prescription is
only part of the story. For a number of years the COTAs ran a peer education
program on the Quality Use of Medicines. Anecdotal evidence from the peer
educators showed that many older people were not able to afford all their
medications, even at the concessional rate, and so they developed a range of
strategies to manage the costs. These included reducing the dosage of
medications e.g. only taking a medicine every other day instead of daily,
dropping some completely, and sharing medications with other people.
The proposed increases in
co-payments will probably increase the numbers of people who do not fill
prescriptions. Whilst that may give the Government the short-term savings it is
looking for on the PBS expenditures, it has the potential to drive up other
health costs in the longer term.
The Grattan Institute
provided supplementary information that further demonstrated clear evidence of
demand for pharmaceuticals declining when the price increases and cited
numerous academic analyses that ‘confirm that the conclusion we reached, that
price increases would be likely to increase the number of unfilled
The changes do nothing to contribute to the sustainability of the PBS
When a PBS co-payment of $2.50 was
introduced for pensioners in 1990 a Pharmaceutical Allowance of $2.50 per week
was introduced concurrently. The Pharmaceutical Allowance increased in line
with increases to the PBS co-payment and in effect this meant pensioners had
the cost of one prescription per week offset. This nexus was broken in 1997 by
the Howard Government when the PBS co-payment increased with no concurrent
increase to the Pharmaceutical Allowance. The Pharmaceutical Allowance is
presently $6.20 per fortnight for individuals and $3.10 per fortnight each for
There is no additional compensation for
pensioners and other vulnerable Australians contained in this Bill, nor are
there any other Bills being considered, that would deliver this compensation.
The increase in the safety net to 68
scripts per year for concessional patients should be considered in the context
of other health cuts and additional out of pocket costs, as well as evidence of
non-adherence to medicines under current safety net arrangements.
COTA provided evidence to the Committee
Many people living only on the
age pension actually live from pension day to pension day, as do people who are
on the much lower Newstart allowance and other payments there is not much left
over at the end of a fortnight, particularly if you are single and particularly
if you are not a homeowner. If you are a single, older woman living in private
rental accommodation you really have not got very much discretionary income. If
something goes up by 80c it seems like nothing to us, but they might have to
get four or five scripts in that week and each one of them will cost them an
extra 80c until they get up to the safety net threshold. If you are looking at
four or five scripts then you are looking at $5. That is a significant amount
of a pensioner's income. It is at that point, the evidence shows us, that people
do not fill them all; that they do not take the action. They might delay going
to the doctor, particularly if they have to pay the $7 co-payment before they
then get asked to pay an extra co-payment for any medications that that doctor
prescribes for them.
people do things like taking
their medication half as many times as they should, sharing medications, not
getting rid of medications that are out of date because they do not want to pay
for the next one and generally, just as we have heard, not getting a script
filled when they should.
The proposal to increase the general
safety net from $1421 by 10 per cent plus the consumer price index over the
next four years will take it out of reach for the majority of Australians.
The Grattan Institute argued the
threshold for general patients would rise by nearly half over four years and
the threshold for concessional patients by 15 per cent. Under these changes
the Grattan Institute pointed to significantly reduced support for sicker
people who need more drugs.
Changes made by the previous Labor
Government through expanded and accelerated simplified price disclosure have
resulted in significant savings and more funding being available for the
listing of new medicines.
These savings undermine the Government’s
argument that the PBS is not sustainable.
The Parliamentary Budget Office
demonstrated that PBS expenditure is projected to slow from its historical real
growth of 2.4 per cent annually to 0.3 per cent annually over the medium term, further
demonstrating the sustainability of the PBS.
The Chief Executive Officer of the
Pharmacy Guild of Australia, Mr David Quilty told the Committee the Guild
estimated the savings from price disclosure to 2020 are about $20 billion.
In its submission the Department of
Health noted that between 2010-11 and 2011-12 there was a reduction in PBS
expenditure of 2.1 per cent.
Mr Richard Bartlett, an Acting Deputy
Secretary with the Department of Health noted the savings from simplified price
disclosure are expected to be over $9 billion by 2016-17, and that these
reforms have contributed directly to making medicines cheaper for consumers.
The Pharmaceutical Society of Australia
noted in its submission that outlays under the PBS are projected to remain stable
at around 0.07 per cent of GDP over the period to 2020.
The $1.3 billion proposed to be realised
through this Bill will not be invested back into the PBS but into the medical
research future fund. This does nothing to contribute to the sustainability of
Labor Senators do not concur with the
Department and committee’s conclusion that the proposed increases in costs for
consumers are reasonable, necessary or proportionate.
Senators recommend that the Senate reject the National Health Amendment
(Pharmaceutical Benefits) Bill 2014.
|Senator Carol Brown
Nova Peris OAM
|Senator the Hon Jan McLucas
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