Issue #1498      20 April 2011

Editorial

False economies drive cuts to PBS

The government has sneaked through cuts to the Pharmaceutical Benefits Scheme (PBS), a scheme designed to make medications affordable to all Australians. The cuts could have a serious impact on the health and well being of thousands of people. The cuts make no sense economically, nor do they fit with all the hype about Labor’s “health reforms” from Prime Minister Julia Gillard and her Health Minister Nicola Roxon.

The government has quietly changed the procedures for approving the listing of new medications on the PBS list of government-subsidised prescriptions. Governments used to automatically approve the listing of medications recommended by its independent Pharmaceutical Benefits Advisory Committee (PBAC). The Howard government introduced a ruling that any medication recommended by the PBAC that was expected to cost more than $10 million per year go to Cabinet for approval. This effectively politicised the process and was applied to socially contentious products. It also meant that politicians with no medical or pharmaceutical expertise were making decisions – sometimes life and death ones. Now, under Gillard, almost all new PBS listings must be approved by Cabinet.

Under the PBS, pharmaceuticals are subjected to an extensive examination by PBAC members who are experts in their field. They consider such things as medical benefits, whether there are other cheaper medications that are just as effective, their cost-effectiveness, etc. The government negotiates cheaper prices with the pharmaceutical companies for listed products. The aim is to make medicines affordable to all who need them.

Gillard hopes to save $30 million in next month’s budget by deferring new listings. “These medications will be reconsidered for listing when circumstances permit,” Gillard said. Hopes of many patients seeking relief or prolongation of life have been dashed. The medications already on hold include treatment for leukaemia, prostate enlargement, immunisation of infants against pneumococcal disease and a new anti-psychotic medication which would assist with the management of schizophrenia.

This deferral of listing recommended medications flies in the face of a memorandum of understanding signed with Medicines Australia, the body representing pharmaceutical companies. The companies agreed to $198 million of savings for the government during 2011-12 in return for certain guarantees regarding new listings. The result is that consumer organisations have been joined by Medicines Australia – an unholy alliance – in the fight to defend PBS processes!

The PBS plays a key role in keeping down the prices of prescriptions and making available cheaper generic medications. The pharmaceutical companies would dearly love to destroy it, as it places some limitations on their already astronomic profit-gouging. The Howard government tried to appoint representatives of Big Pharma onto the PBAC to sabotage its independence. Now it is under attack from a Labor government, albeit a less overt attack. The non-inclusion of medications serves to deregulate pricing and ultimately denies people access. It amounts to the destruction of the PBS by stealth.

Opposition leader Tony Abbott got stuck into Gillard. “There’s an established process in place,” he intoned, singing the praises of the PBAC and the “sophisticated” methods used in making recommendations.

This is Tony Abbott, Howard’s Health Minister who set the precedent of sending PBAC recommendations to Cabinet. The Tony Abbot who tried to push up the cost of PBS scripts by 30 percent in 2002. Who politicised the PBS by trying to put the “morning-after pill” onto the PBS listing as a prescription-only drug. Who as Health Minister opposed the inclusion of the medication Altima on the PBS for use by mesothelioma sufferers who contracted the painful and terminal disease through exposure to asbestos in their workplace. A six-month course of Alimta cost around $20,000.

There is absolutely no logic in the PBS cuts – they are political and ideological – straight out of the neo-liberal stable. They will result in preventable illness and suffering, shorten lives and increase pressure on medical services. Apart from the human cost, they will cost more in dollars than they save. The only people who stand to gain are to be found in the private health industry. Those who make their profits through the hospitalisation and medical procedures required by the victims of Gillard’s cuts. And those who seek to make super profits out of medications.  

Next article – Research funding crucial – Letter to the Prime Minister from Universities Australia

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