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Wednesday, 24 November 2010
Page: 2120

Senator BOYCE (5:24 PM) —I also would like to speak briefly on this report. As has been already pointed out by other members of the committee, the report was somewhat overtaken as a reference by the development of legislation by this government and by the signing of a memorandum of understanding between the innovative pharmaceuticals organisation Medicines Australia and the Department of Health and Ageing. We have legislation, as was said, which was passed this week; but, unfortunately, in the view of the coalition, other items definitely needed to be covered there.

The resolve of the committee in the end was to highlight the recommendations which we felt added new material and new ideas to the development of the PBS in the future. I would like to look at a couple of things that we did not highlight quite so much because we understood towards the end of this inquiry that there was a memorandum of understanding that would overtake and, hopefully, resolve some of the issues that were raised with us. One of those was the length of time that cabinet took to approve medicines. If the government takes up our recommendation on indexing from $10 million up to the necessary figure the value of the PBS high-cost medicines that need to go to cabinet then this will assist the scheme.

But it is not just about high-cost medicines; it is also about the time that this takes. I would like to point out to the Senate that Medicines Australia said that, in their view, the cabinet process generally added six to 12 months to the listing time. Given that Australians are already waiting three years for a medicine to appear on the PBS, that process needs to be looked at. This is a view that the coalition would very strongly support. Three to four years for a medication to be listed on the PBS is not reasonable if it is required medicine, yet this is exactly what is happening right now.

The other side of this was the memorandum of understanding itself, which overtook this report in some ways. Unfortunately, the memorandum of understanding was only between the government and Medicines Australia. We have strongly recommended that they need to involve the other stakeholders—the consumers, the wholesalers and the Generic Medicines Industry Association.

The Generic Medicines Industry Association has pointed out that one of the key consequences of PBS reform is the reduction of generic medicines prices. This is good for the PBS and good for the Australian taxpayer, but not if it means these industries go offshore. The generic medicines sector plays a crucial role, the GMiA informed us, in delivering affordable medicines to the Australian public after the market exclusivity period of originated medicines has expired. The commercial viability of the generic medicines sector is driven by volume. A government policy that reduces the PBS list price of generic medicines in the absence of volume drivers significantly risks undermining the viability of the generic medicines sector, the association told us.

Nothing has changed in that area; nothing that the government has done and nothing in the legislation that was unfortunately passed in this chamber this week will change that. We will be watching carefully to see whether the government can process applications more speedily through cabinet. We will also be watching for the unintended consequences, which I suspect are almost inevitable, for the generic medicines industry and its supply in Australia. I seek leave to continue my remarks later.

Leave granted; debate adjourned.