01.Getting a bad deal
Shopping for pharmaceutical
products to be dispensed to consumers
at subsidised rates as part of the Pharmaceutical Benefits Scheme
cost the federal government more than
$7.5bn last year. With much media
attention focused on this spending,
we decided to take a look at the murky
issues surrounding PBS spending.
Of particular concern is the high price
Australians pay for medicines compared
with other countries, possibly the result
of a likely conflict of interest within
the Pharmaceutical Benefits Pricing Authority (PBPA).
This key concern, put forward by
Stephen Duckett, health program
director at the Grattan Institute,
highlights the government’s poor
shopping skills. According to Australia’s bad drug deal, a report released by the
institute in March this year, government
spending on pharmaceutical products is
far from savvy. Duckett suggests the
government is paying at least $1.3bn a
year more than it needs to – amounting
to 14% of the entire PBS spend.
At present, the government buys all
PBS drugs at a price it negotiates with
individual pharmaceutical companies.
Consumers without a health care
concession card pay up to $36.10 for
a prescription, with the government
topping up any further cost from its
own coffers. However, the Grattan
report suggests changes to the
way the government does business
that could bring the cost of many
pharmaceuticals below the $36.10
co-payment. It is unlikely that the
changes would make much difference
for those with a health care card who
pay a reduced co-payment of $5.90.