Pharmaceutical Benefits Scheme
Safety nets were introduced in 2000 and expanded in 2004, limiting the total out-of-pocket expense singles or families would pay per year for health care in Australia.
In 1944, the Curtin Labor government passed the Pharmaceutical Benefits Act 1944[1][2] as part of a wider plan to create a British-style National Health Service.
[3] However, the Australian Branch of the British Medical Association (BMA) challenged the Act and the High Court of Australia in Attorney-General (Vic) ex rel Dale v Commonwealth.
However, ongoing resistance by the medical profession forced amendments to provisions that required practitioners to use Commonwealth prescription forms or face a fine.
In November 1947, under Section 15 of the 1947 Act, the Commonwealth made arrangements to supply free products for immunisation against diphtheria and whooping cough.
[6] Finally, the High Court in October 1949 ruled that the PBS was constitutional in British Medical Association v Commonwealth (1949).
[7] With the election of the Menzies Liberal government in December 1949, the comprehensive scheme proposed under the 1947 Act was altered to limit the PBS list to 139 'life saving and disease preventing drugs'.
[6] The scheme was appealing to policy makers because it required no major capital works program and could be implemented immediately without lengthy consultation with the medical profession.
Pharmacies purchase PBS-listed drugs from the wholesaler or supplier, and claim the difference between the dispensed price and the patient co-payment contribution from Medicare Australia.
Changes in patient contributions and the safety net over the years are as follows:[10] PBS subsidised medications are also available to foreign visitors whose countries have entered into a Reciprocal Health Care Agreement with Australia.
These countries are the United Kingdom, Ireland, New Zealand, Malta, Italy, Sweden, the Netherlands, Finland, Norway, Belgium and Slovenia.
This reduced the price of some medicines to below the PBS general copayment amount resulting in cost savings for Australians.
Through the term that the Liberal party held office, copayment prices steadily increased to be $42.50 and $6.80 general and concession respectively by 2022.
Academic opinion is divided about the value of these changes and the extent to which they arose from industry lobbying drawing strength from Annex 2C of the AUSFTA.
A new technology whose incremental health benefit justifies its additional expense is deemed to be cost-effective and thus reimbursed by PBAC.
Medicare Australia places the onus of policing restricted benefits on the prescribers themselves and the pharmacists dispensing (unless the listing is also 'Authority Required').
For example, the COX-2 inhibitor celecoxib is listed on the PBS as a restricted benefit for the symptomatic treatment of osteoarthritis and rheumatoid arthritis.
Authority may be obtained by telephone to Medicare Australia (known as "phone approval") or in writing from an authorised delegate of the Minister for Health.
For a written Authority however, evidence of diagnosis and patient eligibility criteria such a pathology test results are usually required.
In 2016, 17 types of medication were removed from the PBS, including Panadol Osteo, aspirin, iron/folic supplements, electrolytes, and laxatives.
[citation needed] The comparative cost-effectiveness processes of the PBS nonetheless ensure it provides Australian citizens with more equitable access to medicines than in many other developed nations and for many the issue of sustainability of the PBS as a key component of the egalitarian architecture of Australian society is equivalent to asking whether that nation's education system or defence forces are sustainable.
[citation needed] Former federal Treasurer Peter Costello and the Liberal Party attempted to raise the patient co-payment of PBS medicines by up to 30 per cent in the 2002 Federal Budget, however this measure was blocked in the Senate in which various minor parties held the balance of power.
New Zealand, which has capped its budget and appointed independent experts to make decisions through the Pharmaceutical Management Agency (Pharmac), pays a sixth as much as the PBS for the same drugs.
In one extreme example the report states that "The price of one drug, Olanzapine, is 64 times higher on the PBS than in Western Australian public hospitals".
[28] An anonymised 10% sample of all people eligible for medicines subsidised by the Pharmaceutical Benefits Scheme (PBS) are made available for research purposes.
