Pharmaceutical Benefit Scheme (PBS) In Australia: Issues And Solutions

The Pharmaceutical Benefit Scheme in Australia

Discuss about the Chronic Myeloid Leukemia in Reflection.

The World Health Organization recently carried out the second review related to the global production, research, development, international trade and global consumption rates of pharmaceutical products (WHO, 2018). This survey was named as the “World Drug Situation” of which, the first report was published in 1988. According to this report Australia is one of the highest consumers of medicinal products and is one of biggest pharmaceutical market in the context of sales throughout the world. Despite of these facts the cost of pharmaceutical products are increasing every year in Australia. To control the medicinal cost effectiveness and to provide each citizen with right to avail good quality medicines in the year 1948 the Pharmaceutical Benefit Scheme (PBS) with the aim to provide people in need with medicines (PBS, 2018). However, The PBS in recent situation is unable to control the increasing cost of medicine sin Australia. In this assignment, this issue of PBS will be discussed in details. Further, the reasons of higher costs in Australia will be mentioned, with clear demonstration of type of medicines (prescribed and non-prescribed). Finally the issues related to PBS system will be mentioned.

The Pharmaceutical benefit scheme or PBS is formed by the federal structure of the Australian government and it was created to provide concession related to medicine to the senior section, deprived section and low income communities of the societies. The consumers had to pay up to $36 for any high cost medicine and the rest is paid by the government (PBS, 2018). However, the system was unable to include most of the high cost drugs as those did not match the criteria of drug inclusion. Therefore the aim remains incomplete. Further the Australian Government formed a statutory committee that determines the pricing of the medicines. However, the committee decided prices depending on the usage, rather than the importance of that drug in the society. The assessment of therapeutic quality, safety and efficacy as well as the cost effectiveness and clinical relevancy are the factors that are considered for the pricing of the drugs that leads to increased prices of highest used medicines in Australia (Duckett et al., 2013).

After the development of PBS system, the Australian government formed a committee to determine the pricing of drug throughout the country. This decision was taken on the basis of a budget that is opaque and unrealistic as their focus in not decreasing the price of medicines, on the other hand they increases the price of drugs that are used frequently by the common citizens (Experts in Chronic Myeloid Leukemia, 2013). Further the listing of drugs in the PBS concession scheme is also a major concern. According to this criteria, if the yearly consumption of the drug is below 10 million, then it will be included in the PBS list otherwise the production company will determine the price with a 6 membered committee of which, 2 members are from pharmaceutical industry. Therefore, the non-statutory body having industrialists decides the price of medicines in Australia. The pricing pattern of drug in Australia is mentioned below (Price et al., 2014).

There are several reasons for the higher costs of life saving drugs in Australia. The Grattan Institute conducted a survey to determine the higher cost of medicine in Australia and compared the pharmaceutical market, policy making and implementation of Australia with that of New Zealand and Canada. The survey determines that the primary reason for drug price hike in Australia is due to the fault in fundamental policy of one nation multiple costs. According to the data of the survey, the cost or expenditure of medicine is increasing by 6% in 2010-2011 and from then the cost is increasing every year (Duckett et al., 2013).

Reasons for Increasing Medicine Cost in Australia

This above graph determines the increasing cost of medicines and the contributing factors in the hike. In this context it should be mentioned that high amount of research related costs, patent related costs and governmental taxation can be another reason for the hike in pharmaceutical costs in Australia (Grattan Institute, 2018). It is evident from the fact that in 2001, when the report of productivity commission released, the cost of medicines were low. However, after that the government increased different taxation scales that might contribute in the higher price of medicines in Australia. The recent report of Health economics London-based report determined the presence of Australia among higher consumer and higher medicinal expenditure countries (Duckett et al., 2013) (Figure 2).

According to the reports of OECD, Australia is one of the leading country in the use of anti-depressant, cholesterol lowering drugs and cancer related drugs (Scott et al., 2015). The rank of Australia is second in the consumption of anti-depressant. It should be mentioned that the rate of depression affected people is higher in Australia. The country uses wide variety of antidepressant and the parameter of defined daily dose is higher in Australian adults is double which is higher than others (OCED, 2018). The increase in dose can be understood from the fact that the DDD was 46 in 1000 people per day in the year 2000 that increases up to 96 per 1000 people in 2013 (figure 3). The consumers of cholesterol lowering drugs are also higher in Australia and the DDD is tripled from 42 dose per 1000 people to 145 dose per 1000 people (Figure 4). The primary reason for this can be understood from the fact that prevalence of obesity, prevalence of depression and higher amount of competitiveness are the primary reasons for the increase in the drug consumption (Vogler & Vitry, 2016).

Besides these drugs, Australian population also possess the highest rates of antibiotic consumption. This has increased the overuse or misuse of antibiotics and thus the risk of increasing microbial resistance is higher in Australian continent.

The drug use in Australia can be divided in two sections, such as prescribed drugs and non-prescribed drugs. The Anatomical Therapeutic Chemical (ATC) decides the drug utilization trend in Australia and depending on the defined daily dose or DDD, the consumption trend is prepared (Hartung et al., 2015). The following table determines the top 10 drugs that are being used by the Australian consumers.

Drug	PBS/RPBS (Subsidized prescription)	Under co payment prescriptions	Total
Amlodipine	30.54	10.81	41.35
Paracetamol	36.44	2.36	38.80
Esomeprazole	24.85	3.93	28.78
Telimisartan	18.74	10.84	29.58
Irbesartan	26.21	11.41	37.63
Candesartan	22.89	11.04	33.93
Perindopril	33.64	15.30	48.95
Atorvastatin	52.65	17.34	69.99
Rosuvastatin	36.13	11.23	47.36
Amlodipine	30.54	10.81	41.35

Drug Consumption Trend in Australia

Further depending on the type of prescription, the list of highly used medicines are:

ATC group	PBS/RPBS (2015)	Co-payment prescription (2015)
(A) Alimentary Tract	31,769,327	8,566,538
(B) Blood and blood forming	10,019,801	1,172,887
® Cardiovascular system	66,613,110	23,820,941
(D) Dermatologicals	3,079,839	1,584,135
(G) Genitourinary system	3,601,733	3,278,334
(H) Hormonal preparations	3,587,541	2,515,752
(J) Antiinfectives	14,173,359	14,682,142
(L) Antineoplastic	3,557,383	156,039
(M) Musculo-skeletal	7,850,114	3,543,861
(N) Nervous system	50,927,262	16,590,718
(P) Antiparasitic products	604,857	624,767
® Respiratory system	12,042,449	1,386,652
(S) Sensory Organs	8,620,689	2,079,557
(V) Various	596,042	11,699
Other	176,871	46,484
Total	217,220,377	80,060,506

Further, the top 10 drugs depending on the prescription count and the number of drug dispensed according to the subsidy and non-subsidy has been mentioned in the appendix section below.

The problems with PBS are its medicine reviewing process and the involvement of industrialists ibn the price determining committee. Further, in this context it should also be mentioned that the price of same drug is different in different states and provinces of Australia. The primary reason for this is the failure of government to implement one nation one price theory (OCED, 2018). Due to the higher cost of medicines, several private hospitals buy such high dose medicines from other countries in lower prices, instead of the PBS and government of Australia, therefore, they provide those medicines in lower price to their own patient, whereas, the government of Australia implements concession to lower the price. Therefore discrepancy in the pricing of medicinal products occurs (Grattan Institute, 2018).

Conclusion

While concluding, this should be mentioned that price hike of medicinal products is harmful for humanity as the world is still unable to eradicate poverty and in several countries the rate of poor people is higher. Therefore, it is the responsibility of the state to protect the human rights of those people. Australia, is suffering from higher costs of medicines and instead of the presence of a proper healthcare department, it is unable to control the price of medicines. This section deals with several issues related to the PBS system of Australia and price hike of medicines. Further a detailed analysis of highest consuming drugs were presented with the reason behind their consumption rate. Finally, the reason to price hike were also provided with proper evidences from several research articles.

References

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

Experts in Chronic Myeloid Leukemia. (2013). The price of drugs for chronic myeloid leukemia (CML) is a reflection of the unsustainable prices of cancer drugs: from the perspective of a large group of CML experts. Blood, 121(22), 4439-4442.

Grattan Institute. (2018). Australia’s bad drug deal | Grattan Institute. Grattan.edu.au. Retrieved 18 April 2018, from https://grattan.edu.au/report/australias-bad-drug-deal/

Hartung, D. M., Bourdette, D. N., Ahmed, S. M., & Whitham, R. H. (2015). The cost of multiple sclerosis drugs in the US and the pharmaceutical industry Too big to fail?. Neurology, 84(21), 2185-2192.

OCED. (2018). Health at a Glance 2015 How does Australia compare?. Oecd.org. Retrieved 19 April 2018, from https://www.oecd.org/australia/Health-at-a-Glance-2015-Key-Findings-AUSTRALIA.pdf

PBS. (2018). Pharmaceutical Benefits Scheme (PBS) | Australian Statistics on Medicines 2015. Pbs.gov.au. Retrieved 19 April 2018, from https://www.pbs.gov.au/info/statistics/asm/asm-2015#drug-utilisation-trends

Price, S. D., Holman, C. A. J., Sanfilippo, F. M., & Emery, J. D. (2014). Impact of specific Beers Criteria medications on associations between drug exposure and unplanned hospitalisation in elderly patients taking high-risk drugs: a case-time-control study in Western Australia. Drugs & aging, 31(4), 311-325.

Scott, N., Caulkins, J. P., Ritter, A., Quinn, C., & Dietze, P. (2015). High?frequency drug purity and price series as tools for explaining drug trends and harms in Victoria, Australia. Addiction, 110(1), 120-128.

Vogler, S., & Vitry, A. (2016). Cancer drugs in 16 European countries, Australia, and New Zealand: a cross-country price comparison study. The Lancet Oncology, 17(1), 39-47.

WHO. (2018). The World Medicines Situation: Chapter 4. World pharmaceutical sales and consumption. Apps.who.int. Retrieved 19 April 2018, from https://apps.who.int/medicinedocs/en/d/Js6160e/6.html