The Cost Of Medicine Consumption In Australia: An Analysis Of The Pharmaceutical Benefits Scheme

The Scenario of the Cost of Medicine Consumption in Australia

Highest consumption rates of medicines occurs mostly in Australia in comparison to the other countries round the world. The Pharmaceutical Benefits Scheme (PBS) scheme is designed to fund the medical costing of the general community. The scheme is thought to be helpful because it provides the general race of the Australian population to get an easy access of the commonly prescribed medicines which are widely available in the market, affordable and at the same time have acceptable standards. However, the cost of the PBS that has been exclusively designed to help the ex-service men women in Australia is increasing each year (Duckett et al., 2013). The following essay sheds lights on the cost of the medicine consumption in Australia via detailed analysis of the PBS scheme. The essay also tries to elucidate the shortcomings of the PBS and the possible recommendation.

In order to speak about the cost of the medicine consumption in Australia, the first thing which comes into consideration is PBS. The Pharmaceutical Benefit Scheme (PBS) is one of the major schemes that define the various aspects of the Australian health care system. The Government of Australia have subsidised the cost of the broad range of the prescript medications for all the residents of Australia who possess the Medical cards (Blanch, Pearson & Haber, 2014). The consumers in the country only pays a set form of price that are been protected from the high costs by the arrangements of the safety nets. The major part of the medicines are that comes under the Pharmaceutical Benefit Scheme are generally dispensed through the pharmacies of the community. However, some of the medicines does not comes under PBS, are only available at the country hospitals.

The government with all its persuasions have been observing the growth of the Pharmaceutical Benefits Scheme (PBS).  In past ten years between 1994 to 1995 and 2004 to 2005, the costs of the PBS have grown nearly about 13 percent every year. The growths have also slowed down and the average annual growth rates have fallen down by 4.86 percent from the year 2005 -06 to the year 2013-14 (Chrysant, 2016). The more recent form of the expenditure has revised its expenditure and it has slowed down in the recent years. The Parliament Budget office has predicted that the rise in the growth will be around 4 to 5 percent annually for the longer term. The slower form of growth in the expenditure of PBS have been attributed in the parts that have the impacts on the discrete policies of pricing and the co payments and the safety nets that have been introduced in the year 2005.

Despite having the overall trend towards the huge form of contractions in the growth of Pharmaceutical Benefits Scheme, there is several number of programs of the Pharmaceutical Benefits Scheme that have been showing the average rates of the growth (Chrysant, 2016). Most importantly, the efficient funding for Chemotherapy has an annual growth rate about 62.61%. Moreover, the highly specialized forms of the drug program have an increased form of the growth of about 6.38% annually (Lal et al., 2017). This form of the increase has been noted in the recent form of the reports that have been trending on the increase in the growth by the department of the Health and by Medicines, Australia. This report has suggested that these programs have been largely unaffected by the vast amount of the changes of the co payments that have been introduced in the year 2005.

Prescribed and Non-Prescribed Medicines Consumed in Australia

The drugs that are been listed under the Pharmaceutical Benefits scheme should be clinically very much cost effective. However, some of the drugs are used for the treatments of the rare form of the diseases that does not meet all of these criteria (Lal et al., 2017). However, it has been observed that the medicines are clinically very effective, they are expensive at a prohibitive rate and rarely very much cost effective. The Life Saving Drugs Program (LSDP) provides financial assistance to patients who require expensive and ‘life saving’ drugs not listed on the PBS. 

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Figure 2: The table shows the US and the Europe Drug company trackers

Name of the Drug	Primary Function	Secondary Function	Type
Chlorhexidine	Metabolism and Alimentary Tract	Anti-infective And Antisepticsr for Oral Treatment (local infection)	Prescribed
Amphotericin	Metabolism and Alimentary Tract	Anti-infective And Antisepticsr for Oral Treatment (local infection)	Prescribed
Nystatin	Metabolism and Alimentary Tract	Anti-infective And Antisepticsr for Oral Treatment (local infection)	Prescribed
Thymol	Metabolism and Alimentary Tract	Anti-infective And Antisepticsr for Oral Treatment (local infection)	Prescribed
Benzydamine Hydrochloride	Metabolism and Alimentary Tract	Other Agents For Local Oral Treatment	Prescribed
Saliva Substitute	Metabolism and Alimentary Tract	Other Agents For Local Oral Treatment	Non-Prescribed
Hypromellose Oral Gel	Metabolism and Alimentary Tract	Other Agents For Local Oral Treatment	Non-Prescribed
Magnesium Trisilicate	Metabolism and Alimentary Tract	Magnesium Compounds	Prescribed
Magnesium Trisilicate With Belladonna	Metabolism and Alimentary Tract	Magnesium Compounds	Prescribed
Calcium Carbonate With Glycine	Metabolism and Alimentary Tract	Calcium Compounds	Prescribed
Aluminium Hydroxide With Magnesium Hydroxide	Metabolism and Alimentary Tract	Complex Combination Of Aluminium, Calcium And Magnesium Compounds	Prescribed
Aluminium Hydroxide With Magnesium Trisilicate And Magnesium Hydroxide	Metabolism and Alimentary Tract	Complex Combination Of Aluminium, Calcium And Magnesium Compounds	Prescribed
Aluminium Hydroxide With Magnesium Hydroxide With Simethicone	Metabolism and Alimentary Tract	Complex Combination Of Aluminium, Calcium And Magnesium Compounds	Prescribed
Cimetidine	Metabolism and Alimentary Tract	H2-Receptor Antagonists	Prescribed
Ranitidine Hydrochloride	Metabolism and Alimentary Tract	H2-Receptor Antagonists	Prescribed
Famotidine	Metabolism and Alimentary Tract	H2-Receptor Antagonists	Prescribed
Nizatidine	Metabolism and Alimentary Tract	H2-Receptor Antagonists	Prescribed
Omeprazole	Metabolism and Alimentary Tract	Proton Pump Inhibitors	Prescribed/Non-Prescribed
Pantoprazole	Metabolism and Alimentary Tract	Proton Pump Inhibitors	Prescribed/non-Prescribed
Lansoprazole	Metabolism and Alimentary Tract	Proton Pump Inhibitors	Prescribed/non-Prescribed
Rabeprazole	Metabolism and Alimentary Tract	Proton Pump Inhibitors	Prescribed/non-Prescribed
Esomeprazole	Metabolism and Alimentary Tract	Proton Pump Inhibitors	Prescribed/non-Prescribed
Esomeprazole Amoxicilan And Clarithromycin	Metabolism and Alimentary Tract	Effective against Helicobacter pylori	Prescribed
Sucralfate	Metabolism and Alimentary Tract	Used For Peptic Ulcer And Gastro-Oesophageal Reflux Disease	Prescribed
Sodium Alginate With Calcium Carbonate And Sodium Bicarbonate	Metabolism and Alimentary Tract	Used For Peptic Ulcer And Gastro-Oesophageal Reflux Disease	Prescribed
Mebeverine Hydrochloride	Metabolism and Alimentary Tract	Synthetic Anticholinergics, Esters With Tertiary Amino Group	Prescribed
Propantheline	Metabolism and Alimentary Tract	Synthetic Anticholinergics, Quaternary Ammonium Compounds	Prescribed
Atropine	Metabolism and Alimentary Tract	Belladonna Alkaloids, Tertiary Amines	Prescribed
Butylscopolamine	Metabolism and Alimentary Tract	Belladonna Alkaloids, Semisynthetic, Quaternary Ammonium Compounds	Prescribed
Butylscopolamine	Metabolism and Alimentary Tract	Belladonna Alkaloids, Semisynthetic, Quaternary Ammonium Compounds	Prescribed
Butylscopolamine	Metabolism and Alimentary Tract	Belladonna Alkaloids, Semisynthetic, Quaternary Ammonium Compounds	Prescribed
Metoclopramide Hydrochloride	Metabolism and Alimentary Tract	Propulsives	Prescribed
Domperidone	Metabolism and Alimentary Tract	Propulsives	Prescribed
Ondansetron	Metabolism and Alimentary Tract	Serotonin (5ht3) Antagonists	Prescribed
Granisetron	Metabolism and Alimentary Tract	Serotonin (5ht3) Antagonists	Prescribed
Tropisetron	Metabolism and Alimentary Tract	Serotonin (5ht3) Antagonists	Prescribed
Palonosetron	Metabolism and Alimentary Tract	Serotonin (5ht3) Antagonists	Prescribed
Aprepitant	Metabolism and Alimentary Tract	Other Antiemetics	Prescribed
Ursodeoxycholic Acid	Metabolism and Alimentary Tract	Bile Acid Preparations	Prescribed
Docusate Sodium	Metabolism and Alimentary Tract	Softeners, Emollients	Non-Prescribed
Bisacodyl	Metabolism and Alimentary Tract	Contact Laxatives	Non-Prescribed
Senna Standardised	Metabolism and Alimentary Tract	Contact Laxatives	Non-Prescribed
Docusate Sodium With Senna	Metabolism and Alimentary Tract	Contact Laxatives	Non-Prescribed
Docusate With Sennoside B	Metabolism and Alimentary Tract	Contact Laxatives	Non-Prescribed
Psyllium Hydrophilic Mucilloid	Metabolism and Alimentary Tract	Bulk-Forming Laxatives	Non-Prescribed
Sterculia With Frangula Bark	Metabolism and Alimentary Tract	Bulk-Forming Laxatives	Non-Prescribed
Sterculia, Combinations	Metabolism and Alimentary Tract	Bulk-Forming Laxatives	Non-Prescribed
Lactulose	Metabolism and Alimentary Tract	Osmotically Acting Laxatives	Non-Prescribed
Macrogol	Metabolism and Alimentary Tract	Osmotically Acting Laxatives	Non-Prescribed

Table 1

(Source: Australian Statistics on Medicines, 2017)

In the Australian sub-continent, the community prescription or private prescription that are dispensed from the non-public hospitals are either funded by the patients or by the private health insurer under which the patient’s health scheme is being covered. Sometimes the cost of these medicines prescribed in such private prescriptions is also funded by the two subsidised schemes funded exclusively by the Australian government— the Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme (RPBS). PBS scheme is designed to fund the medical costing of the general community and RPBS scheme is designed exclusively by for retired servicemen and women. The schemes are thought to be helpful because it provides the general race of the Australian population to get an easy access of the commonly prescribed medicines which are widely available in the market, affordable and at the same time have acceptable standards.

Australia records highest incidence of cancer in the world (Gleeson, Tienhaara & Faunce, 2012; Torre et al., 2012). The cost of More than 100 cancer medicines are been subsidised under the PBS of Australia. Moreover, the Community Affairs Reference Committee is constantly examining the list of the cancer drugs in order to keep these life saving medicines affordable and available to patients in the face of the escalating cost to the government. It is due to the PBS scheme that Australia has some of the best cancer survival outcomes in the world. Timely and affordable access to the new and innovative cancer drugs via the subsidisation provided by the government is the key to this success (Scheme, 2014).

The according to a report published by The Guardian on 18^th September 2015, “Cancer medicines account for one in every six dollars expended through the Scheme, up from one in eight dollars in 2012-13”. However, questions have been raised against the process that is being implemented by the Pharmaceutical Benefits Advisory Committee (PBAC) in drafting the medicine subsidy recommendations in the scheme. According to the recent report published by committee, a thorough review of the cancer medicine data is an urgent requirement. Moreover, they also stated that PBAC must publicly make this cancer drug submission so that the community who is actually hiring this subsidised benefits can provided their reviews and join into a discussion centring real benefits, harm and the cost of these life saving drugs.

In holding such discussion , the real challenge is explaining or finding the actual yet acceptable reason behind the escalating cost of these life saving cancer drugs and how or what basis of calculations their cost is being subsidised.  The PBS scheme subsidise the medicine on the basis of their cost however, they did not take into account the efficacy of the medicines. Under the efficacy of the medicines there lies two principal factors; one is how often the medicine is being used (demand in the market) and what outcome it is providing to the patient and its side-effects (the success rate of the medicine). In short, the PBS must align the prices if the cancer medicine as per the patient’s outcome. There has been a huge transformation in the field of the cancer research with the advent of new yet effective medicines in recent years. Now if the thought process of PBS is aligned on the financial rewards associated with the medicines, overlooking the efficacy, then there is a risk to innovation (Blanch, Pearson & Haber, 2014; Vitry & Roughead, 2014)

PBS scheme in order to cover more and more cancer drugs under the subsidised schemes, they must excluded the painkillers and antacids form the subsidised charts. However, painkillers and antacids are too required in a high rate by the general community but these are different varieties of these medicines available in the market and are quite affordable. On the other hand, the cancer drugs are life savings, there are only single variety and are always on affordable by the general community, ex-servicemen and women. Thus the committee members, working under the PBs scheme must work together to make the system more equitable. The government must also come forward and examine all the available pathways inn order t accelerate the registration and listing of the newly discovered cancer drugs for this they must cite the assessments performed by the other overseas regulators (Davey, 2017; Clarke, 2012).

Reference List

Australian Statistics on Medicines 2015. (2017) (1st ed., pp. 1,2). Australia. Retrieved from

https://www.pbs.gov.au/statistics/asm/2015/australian-statistics-on-medicines-2015.pdf

Blanch, B., Pearson, S. A., & Haber, P. S. (2014). An overview of the patterns of prescription opioid use, costs and related harms in Australia. British journal of clinical pharmacology, 78(5), 1159-1166.

Chrysant, S. G. (2016). The clinical significance and costs of herbs and food supplements used by complementary and alternative medicine for the treatment of cardiovascular diseases and hypertension. Journal of human hypertension, 30(1), 1.

Clarke, P. M. (2012). Challenges and opportunities for the Pharmaceutical Benefits Scheme. The Medical journal of Australia, 196(3), 153-154.

Davey, M. (2017). Pharmaceutical Benefits Scheme becoming unsustainable, says Senate committee. the Guardian. Retrieved 1 September 2017, from

https://www.theguardian.com/society/2015/sep/18/pharmaceutical-benefits-scheme-becoming-unsustainable-says-senate-committee

Duckett, S. J., Breadon, P., Ginnivan, L., & Venkataraman, P. (2013). Australia’s bad drug deal: high pharmaceutical prices. Melbourne: Grattan Institute.

Gleeson, D., Tienhaara, K., & Faunce, T. (2012). Challenges to Australia’s national health policy from trade and investment agreements.

Iyengar, S., Tay-Teo, K., Vogler, S., Beyer, P., Wiktor, S., de Joncheere, K., & Hill, S. (2016). Prices, costs, and affordability of new medicines for hepatitis C in 30 countries: an economic analysis. PLoS Medicine, 13(5), e1002032.

Lal, A., Mantilla-Herrera, A. M., Veerman, L., Backholer, K., Sacks, G., Moodie, M., … & Peeters, A. (2017). Modelled health benefits of a sugar-sweetened beverage tax across different socioeconomic groups in Australia: A cost-effectiveness and equity analysis. PLoS medicine, 14(6), e1002326.

Scheme, P. B. (2014). Australian Government.

Torre, L. A., Bray, F., Siegel, R. L., Ferlay, J., Lortet?Tieulent, J., & Jemal, A. (2015). Global cancer statistics, 2012. CA: a cancer journal for clinicians, 65(2), 87-108.

Vitry, A., & Roughead, E. (2014). Managed entry agreements for pharmaceuticals in Australia. Health Policy, 117(3), 345-352.