Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services
Outcome2
Access to Pharmaceutical Services
Access to cost-effective medicines, including through the Pharmaceutical Benefits Scheme and related subsidies, and assistance for medication management through industry partnerships
Outcome Strategy
The Australian Government, through Outcome 2, provides reliable, timely and affordable access to costeffective, sustainable and high quality medicines and pharmaceutical services. The Government does this through subsidising the cost of medicines through the Pharmaceutical Benefits Scheme (PBS), by providing free access to expensive and ‘life-saving’ drugs, and by supporting the provision of aids and appliances. The Government also provides advice and support to health professionals and consumers on the quality use of medicines, and works with the pharmaceutical industry to ensure the supply of medicines through the PBS.
TheNational Medicines Policy provides an overarching framework for the activities in Outcome 2. There are four central objectives of the policy:timely access to medicines at an affordable cost to individuals and the community; medicines should meet quality, safety and efficacy standards; quality use of medicines; and maintaining a responsible and viable medicines industry.
Under the National Medicines Policy, the Australian Government provides advice and support to health professionals and consumers on the quality use of medicines, along with programs aimed at improving the use of medicines in the community, improving health outcomes for patients and increasing the sustainability of the PBS.
Through the Fifth Community Pharmacy Agreement (the FifthAgreement), theGovernment will provide funding and support to around 5,000 pharmacies tocontinue dispensing PBS medicines. The Government collaborates with community pharmacies, peak bodies and consumers to implement the FifthAgreement.
Ensuring the sustainability of this system and access to innovative treatments for Australian consumers is of the utmost importance to the Government.
The 2010 PBS reforms and Price Disclosure continue to be a highly effective mechanism for ensuring the sustainability of the PBS and making head room for new medicines.
For example the expanded and accelerated price disclosure reforms of 2010 continue to deliver price cuts of between 10% and 87% whilst following the market rather than setting it.
These reforms continue to reduce the price of medicines for the consumer as well as Government. In its first year of operation the 2010 reforms delivered $1.9 billion of price cuts to the PBS. The price changes that have occurred or will occur in 2013 and beyond will reduce the forward estimates by a further $2billion, around $4billion in savings, since these reforms commenced.
The Government will continue to implement and monitor pricing reforms and other initiatives agreed to under the Memorandum of Understanding with Medicines Australia, such as the Managed Entry Scheme and Parallel Processing. Consumers and key stakeholder groups such as Medicines Australia, the Generics Medicines Industry Association and the Consumers Health Forum, continue to be consulted through this process.
Outcome 2 is the responsibility of Pharmaceutical Benefits Division.
Programs Contributing to Outcome 2
Program 2.1: Community pharmacy and pharmaceutical awareness
Program 2.2: Pharmaceuticals and pharmaceutical services
Program 2.3: Targeted assistance – pharmaceuticals
Program 2.4: Targeted assistance – aids and appliances
Outcome 2Budgeted Expenses and Resources
Table 2.1 provides an overview of the total expenses for Outcome 2 by program.
Table 2.1: Budgeted Expenses and Resources for Outcome 2
2012-13Estimated
actual
$'000 / 2013-14
Estimated
expenses
$'000
Program 2.1: Community pharmacy and pharmaceutical awareness
Administered expenses
Ordinary annual services (Appropriation Bill No. 1) / 333,854 / 367,130
Departmental expenses
Departmental appropriation1 / 6,784 / 6,274
Expenses not requiring appropriation in the budget year2 / 157 / 212
Total for Program 2.1 / 340,795 / 373,616
Program 2.2: Pharmaceuticals and pharmaceutical services
Administered expenses
Ordinary annual services (Appropriation Bill No. 1) / 190,182 / 193,135
Special appropriations
National Health Act 1953 - pharmaceutical benefits / 9,466,358 / 9,878,169
Departmental expenses
Departmental appropriation1 / 36,521 / 35,730
Expenses not requiring appropriation in the budget year2 / 1,191 / 1,482
Total for Program 2.2 / 9,694,252 / 10,108,516
Program 2.3: Targeted assistance - pharmaceuticals
Administered expenses
Ordinary annual services (Appropriation Bill No. 1) / 151,016 / 153,336
Departmental expenses
Departmental appropriation1 / 3,292 / 3,045
Expenses not requiring appropriation in the budget year2 / 76 / 103
Total for Program 2.3 / 154,384 / 156,484
Program 2.4: Targeted assistance - aids and appliances
Administered expenses
Ordinary annual services (Appropriation Bill No. 1) / 745 / 681
Special appropriations
National Health Act 1953 - aids and appliances / 284,592 / 304,915
Departmental expenses
Departmental appropriation1 / 3,292 / 3,045
Expenses not requiring appropriation in the budget year2 / 76 / 103
Total for Program 2.4 / 288,705 / 308,744
Table 2.1: Budgeted Expenses and Resources for Outcome 2 (cont.)
2012-13Estimated
actual1
$'000 / 2013-14
Estimated
expenses1
$'000
Outcome 2 totals by appropriation type
Administered expenses
Ordinary annual services (Appropriation Bill No. 1) / 675,797 / 714,282
Special appropriations / 9,750,950 / 10,183,084
Departmental expenses
Departmental appropriation1 / 49,889 / 48,094
Expenses not requiring appropriation in the budget year2 / 1,500 / 1,900
Total expenses for Outcome 2 / 10,478,136 / 10,947,360
2012-13 / 2013-14
Average staffing level (number) / 230 / 214
1 Departmental appropriation combines “Ordinary annual services (Appropriation Bill No 1)” and “Revenue from independent sources (s31)’.
2“Expenses not requiring appropriation in the Budget year” is made up of depreciation expense amortisation expense, makegood expense and audit fees.
Program2.1: Community pharmacy and pharmaceutical awareness
Program Objectives
Support timely access to medicines and pharmacy services through the Fifth Community Pharmacy Agreement
The Australian Government will ensure all eligible Australians continue tohave timely access to PBS medicines and other professional services through theFifth Agreement. The Fifth Agreement provides funding over five years, from2010-11 to 2014-15, to remunerate pharmacists for dispensing PBS medicines and provide a range of professional programs and servicesthat aim to improve consumer health outcomes. These include services to support medication management, programs to assist the pharmacy workforce, activities to support improved service quality, and ongoing research and development work to inform future service delivery models.
In 2013-14, the Department will continue over 20 programs to support the delivery of pharmaceutical services and quality use of medicines through community pharmacies. These initiatives include the Electronic Recording and Reporting of Controlled Drugs Supply (which aims to collect and report real time data relating to controlled drugs to help address problems of forgery, abuse and prescription shopping), and PBS Claiming from a Medication Chart in Residential Aged Care Facilities (which aims to improve medication safety for residents, and decrease the duplication of paperwork and administrative burden) andContinued Dispensing of PBS Medicines in Defined Circumstances(which aims to maintain patient adherence to therapy by preventing treatment interruption due to the inability to obtain a timely prescription renewal).
The Department will support the sustainability of community pharmacies in rural and remote Australia through a range of targeted programs. These programs will address challenges specific to rural pharmacists including continuing professional education, locum services and undergraduate support.
The Department will continue to support the Medication Management Review (MMR) programs which aim to improve the quality use of medicines and reduce medication misadventure among peopleusing multiple medicines. The MMRprograms will be supported by the ongoing roll out of the MedsCheck and Diabetes MedsCheck program which assists services that focus on improving consumer education and management of their medicines.
The Department willcontinue to work with the Pharmacy Guild of Australia to ensure all Fifth Agreement programs are sustainable within the available Fifth Agreement allocation by re-prioritising funding between programs to ensurethat services continue tomeet consumer expectations and needs and overall expenditure is not exceeded. The effectiveness of these programs will be reviewed in the context of the Fifth Agreement Evaluation Framework.Programs with a medication management focus will be specifically reviewed under the Combined Review of Fifth Agreement Medication Management Programs. The progress and reports of all the reviews will be made available on the Department’s website.
Program 2.1 is linked as follows:
- The Department of Human Services (Services to the Community – Program1.1) administer payments under various professional programs and services contained within the Fifth Community Pharmacy Agreement. This includes payments to claiming pharmacists for Medication Management Programs, and payments to pharmacies that participate in the Pharmacy Practice Incentive Program.
Program 2.1: Expenses
Table 2.2: Program Expenses
2012-13Estimated
actual
$'000 / 2013-14
Budget
$'000 / 2014-15
Forward
year 1
$'000 / 2015-16
Forward
year 2
$'000 / 2016-17
Forward
year 3
$'000
Annual administered expenses
Ordinary annual services / 333,854 / 367,130 / 400,900 / 400,920 / 400,942
Program support / 6,941 / 6,486 / 6,440 / 6,479 / 6,586
Total Program 2.1 expenses / 340,795 / 373,616 / 407,340 / 407,399 / 407,528
Program 2.1: Deliverables
Qualitative Deliverables for Program 2.1
Support timely access to medicines and pharmacy services through the Fifth Community Pharmacy Agreement
Qualitative Deliverables / 2013-14 Reference Point or TargetPhased roll out of measure: Electronic Recording and Reporting of Controlled Drugs / Continue measure phase in, for completion during the first half of 2013-14, including working with jurisdictions to facilitate the delivery of this measure[1]
Phased roll out of measure: Supply and PBS Claiming from a Medication Chart in Residential Aged Care Facilities / Continue measure phase in, for completion during 2013-14, including evaluation of the National Residential Medication Chart in pilot sites prior to consideration of a national rollout
Phased roll out of measure: Continued Dispensing of PBS Medicines in Defined Circumstances / Continue measure phase in, for completion during 2013-14, dependent on state and territory enabling legislation being introduced to facilitate the delivery of this measure
QuantitativeDeliverable for Program 2.1
Support timely access to medicines and pharmacy services through the Fifth Community Pharmacy Agreement
Quantitative Deliverable / 2012-13 Revised Budget / 2013-14 BudgetTarget / 2014-15 Forward
Year1 / 2015-16 Forward
Year2 / 2016-17 Forward
Year3
Number of medication management services provided under the Fifth Agreement / 63,000 / 64,500 / 66,000 / 67,500 / 69,000
Program 2.1: Key Performance Indicators
QuantitativeKey Performance Indicators for Program 2.1
Support timely access to medicines and pharmacy services through the Fifth Community Pharmacy Agreement
QuantitativeIndicators / 2012-13 Revised Budget / 2013-14 Budget
Target / 2014-15 Forward
Year 1 / 2015-16 Forward
Year 2 / 2016-17 Forward
Year 3
Percentage of rural community pharmacies accessing targeted rural programs to support the sustainability of community pharmacy in rural and remote Australia[2] / 70% / 75% / 80% / 80% / 81%
Percentage of community pharmacies participating in the Pharmacy Practice Incentives Program[3] / 45% / 90% / 91% / 91% / 92%
Program 2.2: Pharmaceuticals and pharmaceutical services
Program Objectives
List cost-effective, innovative, clinically effective medicines on the PBS
The PBS is the primary means through which the Australian Government ensures Australians have timely and affordable access to pharmaceuticals. In 2012-13, the PBS is expected to cost $9.5 billion, increasing to $9.9 billion in 2013-14.
The listing of medicines on the PBS is based on the advice of the Pharmaceutical Benefits Advisory Committee (PBAC), an independent, expert advisory body comprising doctors, other health professionals and a consumer representative. ThePBAC assesses the safety, therapeutic benefits and cost-effectiveness of the medicine for the intended use, in comparison with other available treatments. Since the Mid Year Economic and Fiscal Outlook in October 2012, the Government has approved a number of new or amended PBS listings, at an overall net cost of $692million over five years,including the listing of pregabalin (Lyrica®) for the treatment of chronic pain on 1 March 2013, and the listing of two new innovative medicines, boceprevir (Victrelis®) and telaprevir (Incivo®), to treat Hepatitis C.
Increase the sustainability of the PBS
The Government ensures that the PBS is managed in a fiscally responsible and sustainable way, so that the Australian community will continue to have access to affordable medicines into the future.
Further PBS reforms not only deliver savings to taxpayers but also deliver savings direct to consumers’ pockets. For example by the end of 2013 treatments for gastrointestinal conditions, blood pressure, depression and cholesterol are expected to be up to almost $16 a packet cheaper for consumers compared to what they were paying in 2011, as a result of the price cuts under the 2010 PBS reforms.
Price Disclosure is expected to achieve a further saving of $2 billion through price reductions occurring in 2013 and beyond. These reforms use market prices to achieve ongoing savings to the PBS providing the Government the ability to list new and innovative medicines as they become available.
Price disclosure is one of the primary means through which the Government will continue to reduce the costs of PBS subsidised drugs. It requires suppliers of medicines to disclose the prices they charge to pharmacies, allowing prices paid under the PBS to be revised to reflect the weighted average prices actually charged in the market. Price disclosure now applies to more than 300drugs.Further reductions are scheduled for 1 August 2013, 1 December 2013 and 1April 2014.
The Department will also work with the pharmaceutical industry to balance the need to promote competition in the industry through the use of generic medicines without discouraging investment in pharmaceutical research and innovation.
Post Market Surveillance
In 2013-14, the Government will continue to progress several reviews of medicines in use, focusing on the appropriate and quality use of medicines to help improve health outcomes for patients and ensure continued value for money for taxpayers.
Quality Use of Medicines
In 2013-14, the Department will continue to apply the National Medicines Policy through collaboration with National Medicines Policy partners to improve the quality use of medicines in the community, including considering issues such as antimicrobial resistance and health literacy.
Increased funding for chemotherapy services
In 2013-14, the Department will undertake a comprehensive review of funding arrangements for chemotherapy services. From 1 July 2013 to 31 December 2013, additional funding of $60 per infusion will ensure the ongoing viability of chemotherapy services. The review of chemotherapy arrangements will report to the Minister for Health by October 2013 with recommendations on a longer-term sustainable approach to funding chemotherapy services.
Program 2.2 is linked as follows:
- The Department of Human Services (Services to the Community – Program1.1) to administer the PBS, including payment of script benefits, authority approvals, new and other PBS items.
Program 2.2: Expenses
Table 2.3: Program Expenses
2012-13Estimatedactual
$'000 / 2013-14
Budget
$'000 / 2014-15
Forward
year 1
$'000 / 2015-16
Forward
year 2
$'000 / 2016-17
Forward
year 3
$'000
Annual administered expenses
Ordinary annual services / 190,182 / 193,135 / 196,316 / 199,528 / 199,468
Special appropriations
National Health Act 1953 - / 9,466,358 / 9,878,169 / 10,374,106 / 10,811,795 / 11,284,504
pharmaceutical benefits
Program support / 37,712 / 37,212 / 36,478 / 35,365 / 35,845
Total Program 2.2 expenses / 9,694,252 / 10,108,516 / 10,606,900 / 11,046,688 / 11,519,817
Program 2.2: Deliverables
Qualitative Deliverables for Program 2.2
List cost-effective, innovative, clinically effective medicines on the PBS
Qualitative Deliverables / 2013-14 Reference Point or TargetThe PBAC meets at least three times a year and provides recommendations to the Minister on new listings for the PBS / The PBAC recommendations for listing on the PBS are based on the clinical effectiveness and cost-effectiveness of new medicines, and provided in a timely manner
Price negotiations with sponsors and conditions for listing finalised, and quality and availability checks undertaken for new PBS listings / All negotiations and listing activity completed in a timely manner
Post Market Surveillance
Qualitative Deliverable / 2013-14 Reference Point or TargetUndertake reviews of medicines in use, focussing on the appropriate and quality use of medicines / Complete two reviews in 2013-14: medicines used to treat asthma in children and medicines and products used to manage diabetes
QuantitativeDeliverable for Program 2.2
List cost-effective, innovative, clinically effective medicines on the PBS
Quantitative Deliverable / 2012-13 Revised Budget / 2013-14 BudgetTarget / 2014-15 Forward
Year1 / 2015-16 Forward
Year2 / 2016-17 Forward
Year3
Percentage of the community’s (public) comments included for consideration at each Pharmaceutical Benefits Advisory Committee meeting / 100% / 100% / 100% / 100% / 100%
Program 2.2: Key Performance Indicators
QuantitativeKey Performance Indicators for Program 2.2
List cost-effective, innovative, clinically effective medicines on the PBS
QuantitativeIndicators / 2012-13 Revised Budget / 2013-14 Budget
Target / 2014-15 Forward
Year 1 / 2015-16 Forward
Year 2 / 2016-17 Forward
Year 3
Number of prescriptions subsidised through the PBS[4] / 199m / 212m / 219m / 227m / 235m
Revenue received from the cost recovery of the PBS listing process / $14.1m / $14.1m / $14.1m / $14.1m / $14.1m
Increase the sustainability of the PBS
QuantitativeIndicator / 2012-13 Revised Budget / 2013-14 Budget
Target / 2014-15 Forward
Year 1 / 2015-16 Forward
Year 2 / 2016-17 Forward
Year 3
Estimated savings to Government from the price disclosure program per annum / $121.0m / $296.0m / $578.0m / $855.0m / $1,117.0m
Program 2.3: Targeted assistance – pharmaceuticals
Program Objectives
Improve access to new and existing medicines for patients with life threatening conditions
The Australian Government will continue to provide fully subsidised access for eligible patients to expensive and life-saving drugs for rare and life threatening medical conditions through the Life Saving Drugs Program.
Ten drugs are currently funded through the program to treat seven serious and very rare medical conditions. These conditions are: Fabry, Gaucher, Mucopolysaccharidosis Types I, II and VI, Infantile Pompe disease and Paroxysmal Nocturnal Haemoglobinuria. Each condition has separate treatment guidelines, developed and administered using the advice of an expert disease advisory committee.
In 2013-14, the Department will continue to facilitate and monitor access for new and continuing patients to these medicines.
Program 2.3: Expenses
Table 2.4: Program Expenses
2012-13Estimated
actual
$'000 / 2013-14
Budget
$'000 / 2014-15
Forward
year 1
$'000 / 2015-16
Forward
year 2
$'000 / 2016-17
Forward
year 3
$'000
Annual administered expenses
Ordinary annual services / 151,016 / 153,336 / 158,692 / 160,277 / 161,887
Program support / 3,368 / 3,148 / 3,127 / 3,146 / 3,198
Total Program 2.3 expenses / 154,384 / 156,484 / 161,819 / 163,423 / 165,085
Program 2.3: Deliverables
Qualitative Deliverable for Program 2.3
Improve access to new and existing medicines for patients with life threatening conditions
Qualitative Deliverable / 2013-14 Reference Point or TargetReview program guidelines to ensure they remain current and relevant / Program guidelines reviewed within agreed timeframes
QuantitativeDeliverable for Program 2.3
Improve access to new and existing medicines for patients with life threatening conditions