COTA submission on the PBS

COTA submission on the PBS

Council on the Ageing (Australia)

Submission to the

Interdepartmental Committee review of the

Pharmaceutical Benefits Scheme (PBS)

Council on the Ageing (Australia)
Level 2, 3 Bowen Crescent
Melbourne Victoria 3004
Phone: 03 9820 2655 Fax: 03 9820 9886,
Email: cota@cota.org.au
www.cota.org.au

July 2002

The Federal Government, in its 2002-03 Budget, included a number of changes that it felt would secure the future of the Pharmaceutical Benefits Scheme (PBS) and would further promote the quality use of medicines. An Interdepartmental Committee (IDC) is examining the overall effectiveness of the Scheme. The IDC is reviewing how the PBS can continue to achieve its objectives of providing timely, reliable and affordable access for the community to necessary medicines.

Council on the Ageing (COTA) in its 2001 pre-election guide "21^st Century Ageing: a plan for Government 2002 – 2004" stated: "Australia has a Pharmaceutical Benefits Scheme of which we can be proud. It provides affordable medication. But the scheme's integrity is under threat.

Access to pharmaceuticals is a critical part of the health and aged care system. Management of the costs of pharmaceuticals both to the Government and to the consumer ensures that people can continue to obtain the drugs they need to improve quality of life.

Older people are major users of prescribed and over the counter (OTC) medicines as a result of managing a number of chronic conditions. Access to affordable medicines is a major issue as access to and appropriate use of medicines underpins living independently in the community.

The growth in outlays in prescribed medicines has led to delisting of some drugs from the PBS and older people have suffered as a result. Intensive lobbying by drug companies has resulted in certain medications being delisted in favour of other drugs. COTA has also been very concerned about the intensive selling of pharmaceutical products to general practitioners by pharmaceutical companies.

Doctors, consumers and pharmacists need better education on drugs through the National Prescribing Service."

Our pre-election guide sought a commitment from political parties for:

"New strict controls on the direct and indirect advertising and selling of pharmaceuticals.

Stronger price negotiation with pharmaceutical companies particularly where sales have exceeded estimates.

Greater transparency for the reasons for delisting drugs from the PBS, including consumer impact statements.

More resources for information and education about prescribed medicines for older people."

COTA was disappointed at the 2002 budget proposal for a substantially increased consumer contribution to pharmaceuticals prescribed through the PBS.

COTA is aware that 59% of Australians are taking prescribed medicines and this figure rises to 86% for those over 65 years. 79% of PBS expenditure is for concessional patients. (ABS 1995 National Health Survey Use of Medications Australia 29 January 1999). COTA is aware of the rise in cost of the PBS.

What is the debate about?

More conditions are now manageable with drugs. The language of the 2002 federal budget focused on budget expenditure control rather than the contribution pharmaceuticals can make to better health. COTA believes the current debate needs to encompass whether prescribed pharmaceuticals are contributing to improved health outcomes that reduce public and private health expenditure.

Academic detailing

Doctors are subject to considerable sale pressure from pharmaceutical manufacturers. Once a drug is listed, the pharmaceutical industry launches massive selling campaigns to doctors. This precedes independent advice to medical practitioners, often by many months. The growth in the PBS of 19% last year has been seized upon by the Government as a reason to impose restraints at the point of consumption. A substantial proportion of last year's increased expenditure was due to huge sales of the two new drugs Zyban and Celebrex. The sales have since leveled out. It would have been interesting to know if sales would have accelerated as they did if academic detailing had been available to prescribers on the release of both medications. Note for instance the British Medical Journal editorial of 1 June 2002. "Are selective COX2 inhibitors superior to traditional non-steroidal anti-inflammatory drugs? Adequate analysis of the CLASS trial indicates this may not be the case". This information was not available to prescribers in the first 6 months following the listing of Celebrex.

Direct Marketing

Pharmaceutical manufacturers are increasingly subverting the intention of Government that prescribed pharmaceuticals not be advertised directly to the community. It is hard to take seriously the supposed code of ethics of the Australian Pharmaceutical Manufacturers Association that is as readable to the public as Beowulf is in its original old English.

Consumer Knowledge

Consumer education is severely under resourced. There have been sporadic investments in consumer quality use of medicines. These have been characterized by low investment and inadequate evaluation. COTA is convinced through its peer education programmes that consumer education will lead to quality use of medicines and will play a part in reducing Government expenditure. The 2001 budget community education initiative is still a long way from delivering any outcomes. Consumers are unaware of the cost to Government of individual pharmaceuticals. Generic alternatives are not widely promoted. COTA receives consistent feedback from older people that they are unaware of the availability of generic pharmaceuticals. They notice that scripts are endorsed with a no substitution requirement but are rarely offered an explanation by their medical practitioner.

Co-contribution

The rationale for the proposed increase in the co-contribution by patients for PBS drugs is not well documented. If it is a move to reduce budget expenditure, has the impact on health outcomes been estimated? If the intent is to reduce consumption, is there evidence that price signals will reduce consumption of non-essential medication?

Canadian studies have shown that the impact of increased co-payments on social assistance recipients caused an increase in hospitalizations/institutionalizations (14%) doctor visits (22%) and emergency department visits (106%).

A Quebec study reported in "A National Pharmacare Plan: Combining Efficiency and Equity by Joel Lexchin March 2001) showed increased co-payments resulted in increases in hospitalization (35%) doctors visits (13%) and emergency department visits (50%).

Price Volume Agreements

Government and the community cannot afford to allow pharmaceutical manufacturers to reap massive profits from the PBS. It is well reported that the pharmaceutical manufacturing industry is the most profitable global industry. It resources campaigns to influence Government that the PBS does not provide a reasonable profit to the manufacturers. Evidence is scant that the pharmaceutical manufacturers cannot make a profit in Australia. If information exists it certainly is not available to consumer groups. An area of potential savings is the imposition of price/volume arrangements on all subsidised drugs.

Targeting

The Government extended access to concession status in the 2001 budget through expanding Commonwealth Seniors' Health Care eligibility. It is perplexing to observe such a give away to people with incomes as high as $80,000 in one year and then the next year see people on $10,500 basic pension being hit with an additional co-payment well in excess of any inflation index.

Delisting Drugs

Delisting drugs has caused hardship in the past. Largely, the delistings have been drugs used by older people. The price has risen through the delisted drugs being sold as over the counter drugs. To compound the problem, consumers are largely unaware that unlisted drugs will have a price differential between pharmacies.

Non-government organizations and the Australian Consumers Association through its publication Choice could educate consumers and survey the prices of generic pharmaceuticals and over the counter drugs.

What directions should Australia take in providing timely, reliable and affordable access to pharmaceuticals?

Recognize that the PBS and its associated structures for the approval and setting of drug prices are basically sound.

Provide more research funding for the analysis of the contribution of prescribed pharmaceuticals to the improvement of health outcomes and thus impact on health expenditure.

Academic detailing be available at the time of the listing of a new drug on the PBS.

Stop pharmaceutical manufacturers from advertising their products either overtly or covertly to consumers.

Increase funding for consumer education and measure impact to determine successful methods for consumers to improve their quality use of medicines.

Have all prescribed medicines labeled with the actual price to Government and make consumers aware of cheaper alternatives with the same therapeutic outcome.

Undertake regular campaigns to inform consumers of the price advantages of generic pharmaceuticals and encourage consumers to discuss generic substitution with their medical practitioner.

Investigate the impact of price signals on pharmaceutical use and any subsequent change in health outcomes.

Negotiate price/volume agreements with manufacturers for all medications listed on the PBS.

Wind back concessions to high-income retirees.

Delist pharmaceuticals from the PBS only after a public consumer impact investigation is completed that determines there will not be negative impact on health outcomes.

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Council on the Ageing (Australia)
Level 2, 3 Bowen Crescent, Melbourne Vic 3004
Tel (03) 9820 2655 Fax (03) 9820 9886
email cota@cota.org.au
www.cota.org.au