A Stable, Sustainable and Strong PBS:

Needed now more than ever in a

rapidly changing healthcare landscape

The Future of Medicare

13 August 2014

Elizabeth De Somer

Director, Policy & Advocacy

Medicines Australia

1

PBS role in healthcare

• The PBS has been a key driver in increasing Australians’ life

expectancy over the past 65 years

2

The PBS is sustainable

3

• PBS spending fell by 3.5%, or $356M in 2012-13

• Another drop of $537M is estimated for 2013-14

The PBS is sustainable

4

• PBS spending as a percentage of the Health

budget is in long-term decline

There have been repeated downward revisions of PBS expenditure over recent years

PBS expenditure in decline

5

The PBS is sustainable

6

• Australia is behind the OECD in medicines spending

Reasons for Reform

Where Australia ranks

7

Country Innovation profile (NCEs launched vs. Market Share achieved)

EU average 2.3%

NCEs=82

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

NC

Es (

2008

-12)

Mark

et

Sh

are

of

To

tal R

X m

ark

et

Number of NCEs (2008-12) launched

New Zealand

Australia UK

Switzerland

SwedenSpain

Slovenia

Slovakia

Romania

Portugal

Poland

Netherlands

Luxembourg

LithuaniaLatvia

Italy

Ireland

Hungary

Greece

Germany

France Finland

Estonia

Czech R.

Bulgaria

Belgium

Austria

Norway

EU average n46

Paths of reform

8

Reasons for Reform

9

Source: M Wonder, Development of Industry

Relevant Key Performance Indicators for the

Pharmaceutical Benefits Scheme (2010-2013)

Report prepared for Medicines Australia, May

2014

Reasons for Reform

10

Source: Cheema, P. 2010 “International variability in the reimbursement of cancer drugs by publically funded drug programs”, Medical Oncology, v. 19, n. 3, http://www.current-oncology.com/index.php/oncology/article/view/946/924 (accessed 4/10/2013 )

International access to cancer medicines

Reasons for reform

• Australian medicines exports dropped 13.5% last year

11

12

Risks facing Australian patients

0

5

10

15

20

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Nu

mb

er

of

Med

icin

es lis

ted

in

Au

str

alia

Reimbursed in Aus and NZ Medicines that are reimbursed in Aus but not NZ

Source: PBS (Australia), PHARMAC (NZ)

Additional medicines listed for reimbursement in Australia

vs medicines not reimbursed in NZ

The right road of reform

• All access proposals on the table and examined properly

• Innovation rewarded and protected

• Red tape reduction

• Health technology assessment processes improved

• Consider options to diversify medicines funding

13