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Thursday, 5 December 2013
Page: 1765


Mr VAN MANEN (Forde) (12:25): I rise to speak on the National Health Amendment (Simplified Price Disclosure) Bill 2013. I thank the member for Ballarat for her contribution, but I will just reflect on a little bit of history around price disclosure. It was something that was originally introduced by the Howard government in 2007. At that time it was a significant reform to place the PBS system—which is, arguably, the best system in the world—on a sustainable footing. It aims to ensure that the price at which government subsidises medicines more closely reflects the market price. This provides us with more funds to provide funding for additional medicines as they come up.

Under price disclosure, the drug companies are required to report data on sales to wholesalers, pharmacies and other suppliers. That data is used to calculate a weighted average price at which the PBS medicines are actually sold in the marketplace. The weighted average price is compared to the PBS price to determine whether a price reduction will apply. Under the current arrangements, price disclosure cycles take around 18 months to complete. The changes provided in this bill will shorten the period to 12 months.

The bill amends the National Health Act 1953 to improve the operation of the Pharmaceutical Benefits Scheme by seeking to achieve better value for medicines that are subject to competition in the marketplace. We all know that, as a result of the financial mess we have been left by those opposite, these savings are going to be very important going forward.

The PBS provides Australians with timely, reliable and affordable access to necessary and cost-effective medicines. The price disclosure arrangements seek to ensure that the price at which the government subsidises multiple brand medicines more closely reflects market prices.

It is interesting that the member for Ballarat talked about Labor's decision to make this change, but, as usual with Labor's attempts at making any changes, it was just announced, with no consultation whatsoever with the industry. That is despite the clause in the Fifth Community Pharmacy Agreement which requires the Commonwealth to consult in good faith on any budget initiative which has a significant and sustained impact on the viability of community pharmacies.

This simplified price disclosure will streamline the operation of the price disclosure arrangements and allow price reductions to occur sooner and more frequently after medicines become subject to market competition, and all medicines will be merged into one ongoing cycle rather than having several different cycles over the year. The length of each price disclosure cycle, as I said earlier, will be reduced, from 18 to 12 months. The first reduction will occur on 1 October 2014.

The simplified price disclosure measure was, as I just touched on, announced by the former government as part of its economic statement in August 2013. Based on their estimates, it will deliver some $835 million in budget savings. These savings have already been factored into the forward estimates for the PBS and the RPBS, and not implementing the simplified price disclosure policy would require the government to find savings in other programs. This simplified price disclosure will streamline the operation of the current price disclosure arrangements. That is one of the key things the coalition took to the electorate. It is about reducing red tape and regulation and making it easier for businesses to operate. The changes will also result in savings to consumers because they will pay less for some PBS medicines.

The simplified price disclosure will be achieved by amending the act and regulations, and the amendments to the act will expressly provide for 1 April or 1 October to be the price disclosure reduction days. Other days will continue to be prescribed by regulations to ensure that the existing PBS price for a medicine is not reduced by a price disclosure reduction unless the weighted average market price is 10 per cent less than the PBS price on the day the 10 per cent test is applied. The bill also contains an appropriate application provision to manage the existing disclosure cycles. Schedule 1 of the bill relates to the amendment to the existing PBS price for a medicine not being reduced unless the price is less than 10 per cent. The amendment would move the relevant day from the end of the period, in respect of which the weighted average disclosed price for a listed brand is determined, to the next day. The practical effect of moving the 10 per cent test forward by one day is to preserve the 10 per cent buffer afforded in the existing arrangements to enable companies to respond to market forces.

Prior to the election, the Minister for Health said that the coalition would have liked to have consulted with the pharmacy industry rather than it being just dropped on them with no consultation. But, as we are now in government and fully understand the true extent of the mess and shambles that those opposite have left us, we need to continue to pursue a direction that will assist us to deliver a sustainable PBS into the future and to provide funding for new medicines that are coming on. I thank the Minister for Health for the time he took last week to come to my electorate of Forde and meet with some of my local pharmacists and hear their concerns.

One of the issues with these changes is that it does not take into account in any way the changes that have occurred to the business model for our community pharmacists. It does not take into account the fact that, for some of our community pharmacists, rents have increased by 40 per cent over the past few years. There is no compensation for pharmacists for the loss of expensive medicines that are past their use-by date. One of our local community pharmacies, the local Amcal pharmacist in the Logan Hyperdome, is doing a tremendous amount of work with our local community to try to prevent people from getting ill in the first place. They charge just $20 for a health assessment which for some people could take several hours to complete.

Our pharmacists are keen to work on preventative health measures because they fully understand that preventative health is one of the best ways to achieve significant savings in our health budget costs and it provides enormous cost benefits for the community and the health system. Our constituents highly value their local pharmacies not only for the advice and the supply of medications but for blood pressure checks and many other things that our constituents go into their pharmacies for. Sometimes they go in just for a chat because of the relationship that they have built up with the pharmacist over many, many years. I was heartened with the comments made by the Minister for Health that we will continue to work with our community pharmacies to see how we can utilise their skills, talents and capabilities, not only to allow them to continue to build and grow their businesses but also to use those skills to provide additional services that can further help our local communities.

As I touched on earlier, we are in this position because we face a situation where those opposite have left a legacy of debt and deficit. The coalition are seeking to clean up the mess that they have left. In contrast to those opposite, we will work with our community organisations, we will work with our community pharmacies, to ensure that we continue to support them and we will work with them to make the changes that we need to ensure that our pharmaceutical benefits system, and our health system more broadly, is sustainable for the long-term future of everybody in this country.