Budget 2018: Greg Hunt to deliver millions for medicines
Hundreds of millions of dollars in funding for vital medicines will be shaken loose in the budget, with the Turnbull government expected to improve patient access to high-cost drugs, support cash-strapped pharmacies and still have money left over for new subsidies.
As part of its long-awaited response to the King review, the government will overhaul complicated payment processes for high-cost medicines that some community pharmacies cannot afford to stock.
When the new hepatitis medicine Sovaldi was listed on the Pharmaceutical Benefits Scheme in 2016, it came with an upfront cost to pharmacies of more than $20,000. Numerous other medicines cost more than $1000.
It is anticipated some pharmaceutical companies will be required to reduce the wholesale costs of certain medicines and the government will redirect its contributions to better support pharmacies.
The new arrangements will initially be subject to a trial.
It is understood the bonus for the government will be on the balance sheet, with hundreds of millions of dollars normally caught up in the supply chain able to be used for new listings on the PBS. This funding will be detailed in next week’s budget, expected to be the last before the next election.
The Coalition has a commitment to list on the PBS any new drugs recommended by the Pharmaceutical Benefits Advisory Committee and may now be able to do so sooner, without affecting the overall cost of the PBS.
An independent review, headed by market economist Stephen King, heard 22 per cent of community pharmacies were unable to stock high-cost medicines because of the impact on their cash flow.
There was also the risk associated with holding products that might cost them tens of thousands of dollars upfront, for only a small ultimate profit.
Health Minister Greg Hunt is expected to release the final report of the review at the Australian Pharmacy Professional Conference today. Some recommendations will require further work.
Last night, Mr Hunt confirmed the government would overhaul the arrangements for high-cost medicines, which he said compelled some pharmacies to take out overdrafts in order to stock the shelves. “Our hope is that a significant proportion of those 22 per cent of pharmacies will be able to carry high-cost medicines as a result of the changes,” he said. “It’s a decision for individual pharmacies, but this has been the biggest impediment to them doing so.”
While Mr Hunt would not be drawn on industry speculation the changes would free up hundreds of millions of dollars for the government to reinvest in the PBS, he acknowledged there would be “a very significant provision” for new listings.
It remains to be seen whether the government will act on other anticipated recommendations, such as forcing pharmacies to separate complementary medicines and pharmaceutical medicines in store layouts and stop selling osteopathic products.
Mr Hunt has taken a tougher line on evidence-based medicine than his predecessors, restricting the ability of health insurers to cover natural therapies.
Mr Hunt and Rural Health Minister Bridget McKenzie will next week sign a compact with the Australian College of Rural and Remote Medicine. This signals a budget commitment to address workforce maldistribution.