Caution needed: Blunt PBS cost savings may do more harm than good

Tuesday, May 12, 2015

Caution needed: Blunt PBS cost savings may do more harm than good

Announcements regarding the Pharmaceutical Benefits Schedule (PBS) in the 2015-16 Budget mark a departure from the National Medicines Policy, and its aim to improve positive health outcomes for all Australians through their access to and wise use of medicines.

While the Australian Healthcare and Hospitals Association (AHHA) recognises the need for PBS reform to build sustainability into the Australian healthcare system, these initiatives have a short-term focus.

“The Government’s commitment to fiscal repair is recognised, however it is imperative that short-term measures do not have long-reaching adverse consequences for the health of Australians,” said Alison Verhoeven, Chief Executive of the AHHA.

“The universality of the PBS is impacted by these budget measures. An optional $1 discount will offer benefits to some patients, and will assist in reducing PBS expenditure. However, as Minister Ley has acknowledged, community pharmacies in many rural, regional and less privileged areas will not be in a position to pass on the discount, and patients in these areas are likely to be disadvantaged.

“Budget measures to remove over-the-counter medicines from the PBS may appear a simple way to save money. However there appears to have been insufficient consideration of the potential impact on concession card holders and patients with chronic conditions.

“98% of paracetamol is prescribed for patients with a concession card. 85% of paracetamol subsidised under the PBS is reported to be slow-release paracetamol for patients with persistent pain from osteoarthritis. These patients require paracetamol regularly and on a daily basis, and need to be under the regular care of health professionals. These are not quantities used by people with just a headache. For these patients, it is an expense that has already been assessed as cost-effective by the Pharmaceutical Benefits Advisory Committee. Consideration must be given to retaining slow-release paracetamol and other formulations that are available only from pharmacies on the PBS.

“Further, the cost of these medicines now won’t contribute to the safety net for these patients. Once again, we are seeing the shifting of costs to the patients who are most vulnerable.

“There are a range of measures to achieve efficiency within the PBS, without impacting on quality of care. For example, as research and development in pharmaceutical ‘technology’ continues to advance, a review of existing PBS products for their continued appropriateness and efficient cost is needed, not just a blanket cut of over-the-counter medicines.

“We call on Government to investigate measures to support the sustainability of the PBS, and the broader health system in Australia, with a focus on patient equity, system efficiency and quality of patient care, not just blunt cost savings,” says Ms Verhoeven.


The AHHA represents Australia’s largest group of health care providers in public hospitals, community and primary health sectors and advocates for universal high quality healthcare to benefit the whole community.

Media enquiries:

Alison Verhoeven, Chief Executive, 0403 282 501