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Questions to

Mr. Peter Slipper
Federal Member for Fisher, Federal Government.

Could you answer a few questions in respect to the P.B.S. Scheme
and the Free Trade Agreement with the U.S.A.?

(Sent  04.01.06)

1.    What changes were made to the purchase of medications through the P.B.S. by way of the introduction of the Free Trade Agreement with the U.S.A?

A.   The Australian Government has through its negotiations quarantined the PBS from the USA Free Trade Agreement.    Therefore, the price of prescription medicines will not increase as a result of AUSFTA. Access by Australians to affordable medicines and the long term sustainability of the PBS will not be affected by the Agreement.

2.    With the amendments made as a result of Federal Labour amendment what circumstances changed to those arrangements?

A.   Labor suggested amendments to the AUSFTA that prevent large pharmaceutical firms taking out court action with the purpose of preventing cheaper alternatives from entering the market.    The Government did not believe that these amendments were necessary as Australian law already ensures that cheaper generic drugs can enter the market.    That said, the amendments will not be reconsidered unless and until the pharmaceutical industry is able to produce evidence that the changers are operating in a detrimental fashion. 

3.    How are those changes expected to show up to the individual Australian in the future?

A.   It is not expected to have any adverse effect on Australians.    The Australian Government will consider any concerns from the industry about the AUSFTA should they arise.

4.    With the coming review what further changes are expected to be made to those arrangements?

A.   There is no review of the PBS under the AUSFTA, however, the AUSFTA does include provisions for independent review of decisions by the Pharmaceutical Benefits Advisory Committee (PBAC) where it has declined to recommend the listing of a drug on the PBS.    An internal review of these arrangements is planned to take place in 2007.

It is noted in the media that changes are wanted by the Multinational Drug Companies as a result of that review.    It is also noted that the Federal Health Department states that those changes will make no difference to the costs of those medications.

5. In that case why is it that the drug companies are strongly arguing for changes to be made to the present system?

6. How can we guarantee forever that the individual Australian would not be disadvantaged by any further changes to the system?

A.   In answer to questions 5 and 6, the PBS remains a fundamental plank of Australian Health policy and any changes that are made will be based on domestic policy considerations – i.e. what is in the interests of Australians and their health.    Once again, the integrity of the PBS is preserved by the AUSFTA.

7.    How can the Health Funds continue to justify the increase in costs, above that of inflation of the Health Insurance scheme.

A.   The cost of health care is increasing across the healthcare system, largely due to the cost of medical services, wages for health professionals including nurses, the increase in the usage of prostheses and technology costs.    Private health insurance premiums increased by an average 4.52% in 2007.    The average increase is the lowest since 2001 - 18 of the 37 funds had increases less than CPI (3.9%).

To assist and encourage those with private cover, the Australian Government introduced a 30% rebate on private health insurance premiums in 1999, and a Higher Rebate for Older Australians from April 2005.     The cost of the rebates is estimated to be around $3.6 billion in 2007-08 (including $3,464 million delivered through the portfolio of Health & Ageing and $178 million delivered through the Australian Taxation Office).

8.    What is the Federal Health Department doing to ensure that each dollar is well spent on medical health as distinct from bureaucracy?

Since 1995-96, annual spending on health and aged care by the Australian Government has more than doubled, from $19.5 billion in 1995-96 to an expected $51.8 billion in 2007-08. In 2007-08,    Australian Government expenditure on health and aged care will be 22.0% of total Australian Government expenditure compared to 14.8% in 1995-96.

Health and aged care spending as a proportion of total government spending remains steady at 22.0% over the four years to 2010-11 (when AHCAs and PHI funds allocated to the Contingency Reserve for those years are included).

In 2007-08, the Australian Government’s health and aged care expenditure of $51.8 billion will be spent on the Medicare Benefits Scheme ($12.5 billion); supporting state and territory public hospitals ($9.3 billion); subsidising prescription medicines ($7.5 billion); assisting Australians with the cost of private health insurance ($3.6 billion); veterans’ health care ($3.6 billion excluding departmental funding), and aged and community care ($8.7 billion, including DVA component).     These figures incorporate ongoing programs and new initiatives from the 2007 Budget.

The Australian Government is committed to the provision of health services that are efficient and effective.

Mr. Peter Slipper
Federal Member for Fisher

Maroochydore Office:

Location:  The Dolphin Centre
118 Aerodrome Road
Maroochydore BC Qld 4558

Peter.Slipper.MP@aph.gov.au
Phone  07 5443 3555.
Fax: (07) 5443 7270.

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