The Pharmaceutical Benefits Scheme (PBS) has been in the headlines a lot recently — and not just because of That Ad Campaign, featuring white-haired celebrity medico Dr James Wright. That campaign, which cost the taxpayer a cool $26 million, was launched in July to increase public awareness of the PBS and to “make sure that we don’t waste our medications, to make sure the PBS is sustainable into the future,” according to the then health minister, Kay Patterson.
But there are plenty of players out there who believe that a great deal more than consumer vigilance will be needed to ensure that Australia’s world-renowned national medicines scheme is supported politically and financially for a sustainable future.
The Pharmaceutical Benefits Scheme was initiated in the 1940s, prompted by the discovery of penicillin. Its aim was to ensure Australians had universal access to safe prescription medicines.
While the first PBS benefits were paid against 139 lifesaving and disease preventing medicines, today the PBS supports about 140 million prescriptions a year for about 2500 different brands and formulation of prescription medicine.
Included in the list of drugs covered by the PBS is a group of drugs, called Section 100 drugs, which are highly specialised or very expensive medicines for life-threatening diseases or conditions. All HIV antiretrovirals are funded under this part of the scheme, as are specialist medications for cancer, hepatitis and some other medical conditions.
Section 100 drugs can only be prescribed by practitioners who have undergone special training or satisfied other requirements, for patients who meet the strict criteria laid down for the drugs.
Although the Section 100 drugs are the most expensive on the PBS in terms of price per script, they do not account for the bulk of money spent on PBS drugs. This is because they are prescribed in comparatively low numbers, as they are to treat highly specific and relatively uncommon diseases and medical conditions.
In the financial year 2001-02, HIV antiretrovirals listed on the PBS cost the government $68.9 million — about 1.6 percent of the total PBS cost of $4.2 billion.
The drugs which cost the PBS the most money overall are those which are both relatively expensive and widely prescribed, particularly in an ageing population. These include lipid lowering and cholesterol reducing drugs given to people at risk of heart disease, drugs to treat mental illness, gastrointestinal drugs for stomach ulcers, and asthma medications.
The PBS is, of course, subsidised by taxpayers, but the annual money doesn’t come out of general revenue, but a specific pot of money called a special appropriation, which, unlike other health care expenditure, is not allocated as part of the budget. A convergence of circumstances has led to the PBS becoming, over the last few years, increasingly under the scrutiny of politicians, media, the community and the pharmaceutical industry.
Roughly, it goes like this: In 1990-91, the PBS cost the government a little over $1 billion. In 2002-03, the total cost of the scheme had increased to more than $5 billion. And there is plenty of evidence that the cost is likely to continue to increase, although the rate of that increase may not always be so sharp.
There are a number of reasons for the increase in cost, and they are complex — which is why some critics have suggested that That Ad Campaign, which focuses almost entirely on the consumer role, is misguided, if not mischievous.
All of this is happening in the context of a growing and ageing Australian population, and the older people get, the more prescription medicines they tend to need. Secondly, there is a trend toward what might be called ‘pre-emptive’ medicine, where for example a doctor might prescribe a cholesterol-lowering drug in an older man with a family history of heart disease.
But the third, and most significant, factor is to do with new medications themselves. New generations of pharmaceutical medication, particularly those involving highly specific molecular targeting or with complex medical structures, may exert pressure on the PBS because they are better (and so may be more safely used by more people) — and because they may also be very expensive to produce.
This last factor is believed by some analysts to be behind recent steep increases in the annual cost of the PBS, with several expensive drugs like the quit-smoking drug Zyban and the anti-arthritis drug Celebrex being singled out as accounting for dramatic cost increases.
Section 100 drugs have not been quarantined from the drama. Expensive new drugs like Herceptin, for breast cancer, and Glivec, which represents a great advance in treatment for chronic myeloid leukaemia, a notoriously devastating and difficult-to-treat disease, have generated controversy.
Glivec, in particular, has been at the centre of a harrowing tussle between policymakers, bureaucrats, government advisers, Cabinet and the community. As new evidence has come to light that the drug may also provide a real treatment option for particular types of gastrointestinal tumour, the stakes have been dramatically raised, because the cost of Glivec to government is roughly $50,000 per patient per year.
It is on such confronting terms that debate founders. To a person seeking any treatment which may offer hope in staving off a painful or certain death from a tumour, or keeping his or her HIV infection under control, debates about the cost of these medications are likely to seem only insulting and callous. Few people, after all, see their own lives or those of their families, friends or lovers as part of some grand abstract graph drawn up in a faraway office by a health economist.
The pharmaceutical industry — frequently the target of accusation and anger about the prices of medications — points out, with some justification, that highly targeted and effective medicines are developed only at an enormous cost, and that if the developers can’t obtain reasonable prices, it will not be viable to continue to bring new drugs to market. Part of the problem is that drugs may be developed with an eye to the unregulated and inflated prices which companies may demand in the US — but which may be unrealistic for the Australian PBS.
This is a situation likely to affect the listing and subsidy of HIV medications currently in development, and to do so sooner rather than later. There is considerable concern over the likely cost of T-20, the first of a new generation of highly specialised HIV entry inhibitors, which has attracted a much higher price in Europe and the US than previous HIV drugs.
As the stakes heighten, so too, does the rhetoric. In some quarters, the debate has been less than helpful, such as when commentator Bettina Arndt recently delivered a broadside at cancer advocacy groups who, she claimed, were “victims’ groups who use the media to make a special case for subsidising medication which fails to gain PBAC approval on cost-efficiency grounds” — apparently failing to grasp that “the Australian community cannot subside every drug available for every condition to do so would bankrupt the health care budget.”
In expecting their drugs to be funded, in other words, they were threatening the future of the PBS for all of us. Hardly helpful or uniting stuff, but it does perversely serve to underscore the vast differences in emphasis between the economic and the human elements, which fire the passion and anger of this debate.
Underpinning all of this discussion is an assumption largely unquestioned by the media, and certainly perpetuated by the government and some sectors of the pharmaceutical industry and the community: that the system is in crisis, and things cannot continue the way they are.
One solution proposed by Government, and overwhelmingly endorsed by the captains of industry has been proposed increases to the co-payments which consumers make for drugs prescribed on the PBS. A proposal last year to increase this amount has been rejected by the Senate — but at a recent meeting in Sydney on the future of the PBS, the then health minister, Kay Patterson, made it clear that she believed increases in co-payments were at least part of the answer, and that the pharmaceutical industry could help the government by lobbying minority Senators to change their view.
The Australian Consumers’ Association (ACA), however, has released figures which show that increased co-payments would do little to ease the PBS bottom line, while impacting heavily on the affordability of prescriptions for cash-strapped patients. In contrast to the government’s claims that increased co-payments are essential to the future of the PBS, “the reality is that the measure would have almost no impact on the long-term sustainability of the scheme,” according to ACA health spokesman Martyn Goddard.
With little evidence to suggest that increased co-payments would generate enough extra income to combat the rising real cost of the PBS, several critics have argued this is likely to represent the first symbolic step on the rocky road to a two-tiered health care system, since co-payments are likely to mostly affect those on lower or middle incomes but who already may have high health care costs. Families and people with chronic illness are more likely to fall into this group.
Alternatives do exist. Prescribing patterns and habits, particularly the uptake of new drugs, have come under the spotlight, and have been the subject of some welcome educational intervention and vigilance. Welcome, too, have been initiatives to address problems such as ‘doctor-shopping’ and even fraud. Many consumer and welfare groups, however, believe that the government needs to turn its attention to the tax system as a means of further supporting the PBS without cutting back on the benefits it offers.
But increasing taxes remains a touchy area in Australian politics. When Kim Beazley floated the idea of increasing the Medicare Levy in a speech in Perth late last month, Labor leader Simon Crean quickly ruled the idea out.
“It’s not a live option. I’ve ruled that out, and I’ve said we don’t need to do it,” Mr Crean told ABC Television, insisting that the funds needed to support and maintain Medicare and the PBS could be found by “reorganising the Budget.”
Meanwhile, the squabbling continues in the background — though rather like That Ad Campaign, just how much it all adds to a meaningful debate about the value of health care in our community is somewhat less than clear.
*Kirsty Machon* is NAPWA’s Health Policy Analyst.
