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Wednesday, 20 June 2012
Page: 3959


Senator FIERRAVANTI-WELLS (New South Wales) (18:48): The National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2012 seeks to improve the operation of pricing and price disclosure for medicines supplied under the Pharmaceutical Benefits Scheme, to commence 1 October 2012. The bill also makes some modifications to the way medicines are listed for supply for doctors' emergency bags. As it is under the current legislation, the price of a medicine can be expressed in different ways for different functions. This bill removes the approved price to pharmacists and replaces it with an ex-manufacturer price as the core PBS price in the act. The bill provides transitional provisions and includes a method for converting current PBS prices to an ex-manufacturer amount. The bill requires that only one approved ex-manufacturer price be agreed or determined for a pharmaceutical item.

However, the minister has advised that there will be around 40 pharmaceutical items for which the conversion calculations will result in different prices and some negotiations will be required on a case-by-case basis. Where negotiations are not successful, a default price will be applied which is the lowest of the converted ex-manufacturer prices for the item. The bill, as we understand, will also enable price functions to operate uniformly at ex-manufacturer level across the PBS, including where the same item is listed under different PBS programs and mechanisms of supply. Provisions for premium brand pricing will continue.

This bill will ensure that medicines can be captured for the purposes of price disclosure and such pricing issues, as far as the coalition is concerned, ought to have been more properly addressed at the time that the government originally legislated its changes, namely in the National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2010. The government has failed to honour agreements with the sector in the past and the deferral agreement in this case is only valid until October 2012.

The government has introduced uncertainty in the process of PBS approvals which may result in delays in timely access to new medicines. I take the opportunity to make some pertinent points in relation to this very point about uncertainty with PBS approvals. Labor signed a memorandum of understanding with Medicines Australia in May 2010 to provide policy certainty to the sector in return for additional savings of $1.9 billion over five years. But within months of having entered into the agreement, the government made an unprecedented change—surprise, surprise!—to the convention on how governments list medicines on the PBS, in direct contradiction of the spirit of the memorandum of understanding. So in February 2011 we saw the Gillard Labor government refuse to list on the PBS a number of medicines that had been recommended by the independent Pharmaceutical Benefits Advisory Com­mittee, blaming its 'fiscal circumstances'. Of course, the indefinite deferral of the listing of seven new medicines and a vaccine recommended by the independent Pharma­ceutical Benefits Advisory Committee had some very grave consequences—and I will come to those—which were analysed by the Senate Finance and Public Administration Committee. Unfortunately, this move denied patients timely access to new medicines that had been independently assessed by the PBAC as safe, efficacious and cost effective. As I indicated, there was a Senate inquiry and, after substantial political pressure and the Senate inquiry initiated by the coalition, the government agreed to list the deferred medicines in December 2011 and entered into another agreement with key stakeholders. Having said that, when they did make the announcement, on 30 September 2011, the announcement was that there would be further deferrals in the future for new medicines being subsidised on the PBS. In that announcement the government committed only to not deferring drugs that cost under $10 million a year for the coming year. Of course this was a token gesture and it has done absolutely nothing to restore confidence in the PBS.

That backdown by the Gillard government on the February deferrals was certainly welcome news for the patients and families who had been denied access to those medicines, but the uncertainty has continued. What is really sad in this circumstance is that a transparent evidence based system for listing new medicines which received bipartisan support over many years and was very widely respected was trashed by this government because of its financial mismanagement of the economy. People desperately in need of drugs that had been approved by this transparent system were suddenly held up because the government had wasted so much money, and people's lives were put at stake. Yes, the government had signed the memorandum of understanding that was supposed to provide policy certainty for the future in return for savings. Yet, typical of this government, only months after this agreement was signed, in an unprecedented policy U-turn, the government totally changed its mind—of course, that reflects more on the then minister, Minister Roxon, and the fact that she really could not be trusted—and again promises about health were broken. Therefore, any indication from this government of working with stakeholders has to be taken with a grain of salt because, as we have seen, if they are prepared to play with the health of people in relation to life-saving drugs they are prepared to do anything. We know that patients in the future are going to be denied access to their medicines, but we do not know the grounds upon which that is going to happen. In September we were looking at, for example, the fact that drugs that prevent strokes, which could benefit up to 300,000 patients, had not been listed, despite having been recommended for six months and having been found to be safe, efficacious and cost effective. Continuing policy uncertainty means that companies will reconsider the costly process of listing new medicines into the future.

I want to take the opportunity to look at some of the matters that were raised at a hearing of the Senate Finance and Public Administration References Committee under the chairmanship of my colleague Senator Ryan. When you look at the evidence, none was more graphic than the evidence given in relation to Botox, just one of the drugs registered for the treatment of severe primary hyperhidrosis, which is, basically, severe sweating. For those members who participated in that hearing, the evidence given by Ms Ellsum was very powerful. In her case, the initial treatment cost was just under $1,900, a cost that for many people was prohibitive. Had Ms Ellsum's grand­parents not been able to assist with the payments, it would have been very difficult. Her evidence provided the committee with a rare insight into how living with the disease has affected her life and the difference it has made to be able to access this treatment. She said:

I have had it since I was three, but it got really bad in puberty. That was when I was in high school, so I was like the magnet for bullying; everyone went at me, because they did not understand, and no-one understands. It caused my depression. There were days when I did not want to get out of bed because it is so controlling. I blamed myself lots of the times when I had it; I thought it was just me who had it. It draws people back; it stops people from doing things. It deprived me of most of my youth; I did not do the things I wanted to do because it was so controlling and conflicting with my life. I could not do my deb this year because I was afraid of what people would think, and that really made me sad.

With the Botox, it has been amazing. It is the biggest improvement that I have ever heard about, and it has worked. I am planning to do my deb next year—

and she went on about how, amazingly, this had changed her life. This was just one insight that we had into the human cost of this government's total mismanagement. They said it was because of fiscal circumstances, but we still do not know about this arbitrary new decision-making process to defer drugs that have been approved by the PBAC. I do not have the time this evening—because the guillotine is going to be applied shortly—to canvass fully the very pertinent issues as to how small amounts of very vital drugs are being cut because of this government's mismanagement. We will restore policy stability and confidence in the PBS. (Time expired)

Question agreed to.

Bill read a second time.