Senator MASON (Parliamentary Secretary to the Minister for Health and Ageing) (11:41 AM) —This notion that there is some link between this bill and the United States-Australia Free Trade Agreement is nonsense. There is no conspiracy; indeed, there is no link. The Australia-United States Free Trade Agreement does not impact on the ability of the government to set domestic policy on the pricing and listing processes of the PBS; that is a fact. The changes to the PBS effected through PBS reform are clearly a matter of domestic policy and were designed to create budgetary headroom for the listing of new medicines and to increase the transparency of the marketing arrangements used by companies when medicines are subject to competition. I was listening to the second reading debate earlier today. Labor Party senators all agreed that this bill was necessary. Why? Because it actually strengthens the PBS system and allows budgetary headroom for more drugs to be listed.

Senator McLucas —We hope.

Senator MASON —That is the policy intention of this bill. Australia’s obligations under the free trade agreement in relation to the PBS are limited to ways to improve the transparency of the processes undertaken by the Pharmaceutical Benefits Advisory Committee in assessing submissions by companies for the listing of drugs on the PBS. These obligations have been fully implemented through public hearings before the PBAC, the release of public summary documents and the establishment of a process of independent review for certain PBAC decisions. The fundamental architecture of the PBS has not been changed by the free trade agreement. There will not be any changes to the fundamentals of the way in which the PBAC undertakes its work as a result of the PBS reform. The aspects of PBS reform that relate to the pharmaceuticals industry were negotiated with domestic stakeholders, as government always negotiates and discusses with industry stakeholders. No negotiations were undertaken with the US government or industry on the reform package.

I know that certain sums were mentioned this morning and in evidence to the Senate Standing Committee on Community Affairs. The savings to the taxpayer of $580 million over four years and $3 billion over 10 years, which Senator Brown mentioned before, will strengthen and enable more drugs to be listed on the PBS. This is not some sort of conspiracy. This will in fact assist this great scheme to develop and it will give budgetary headroom for the listing of even more drugs and a more comprehensive medical system.