MINISTER FOR HEALTH AND AGED CARE, MARK BUTLER: Thanks for coming out this morning. The Labor Government was elected on a promise last year to make medicines cheaper, and already, we’ve delivered three tranches of cheaper medicines policy. The third tranche of course, being on 1 January, we delivered the biggest cut to the price of medicines in the 75-year history of the Pharmaceutical Benefits Scheme.
Today, I announce the next chapter of our cheaper medicines policy which will halve the cost of common medicines for 6 million Australians living with chronic disease. In doing this, we are acting on the very clear advice of the Pharmaceutical Benefits Advisory Committee, this is a legislated body which, for many years has had the important role of advising Commonwealth governments on medicines policy, so which medicines to list on the PBS, and the manner in which those medicines will be dispensed around the country.
The advice from the Advisory Committee is that more than 300 medicines - 325 common medicines - be approved for two or even three months' supply to patients. The current rule is that only 30 days' supply of medicine is able to be supplied to patients. This means, given that general practitioners are able to issue a script with five repeats, this means that patients with chronic disease at the very least need to make two visits to a GP every year and 12 visits to a pharmacist every year to get their medicines, making co-payments to the pharmacist on every single one of those visits. Accepting the advice of the Pharmaceutical Benefits Advisory Committee for two months' supply of medicine, which is what the government is doing, will halve that number of visits, so patients who are very stable in their condition and have been on these medicines for some time, will be able to get a supply of their medicines with only one visit to the GP per year instead of two, and only six visits to the pharmacist instead of 12. This will obviously involve much less inconvenience for patients, it will reduce pressure which we know is substantial on general practice and, importantly, it will halve the cost of those medicines for six million patients.
The government has decided to accept this advice from the Pharmaceutical Benefits Advisory Committee and provide that these 325 medicines will be available for two months' supply instead of just one month. This new policy will be phased in over three different tranches. The first tranche operating from 1 September this year, the second from 1 March next year and the third tranche from 1 September in 2024. Each tranche will involve around 100 medicines, so about a third of the 325 will be included in each of those tranches and the exact division of medicines between those tranches will be available on the Pharmaceutical Benefits Scheme or PBS website over the course of today.
I am also publishing the advice of the Advisory Committee on the PBS website today for people to look through but, essentially, the Pharmaceutical Benefits Advisory Committee assessed the safety profile of each of those medicines very carefully. Remember, this is the Advisory Committee made up of clinical experts with responsibility for a safe, effective medicines policy in this country and has taken that role very seriously for many decades. The advisory committee also recommended clinical criteria for two months' supply and, in particular, recommended that the patient's condition must be stable and must be suitable for two months' supply rather than just 30 days. It is important to stress that this will ultimately be a decision for a patient's treating doctor to be confident that providing two months supply of medicines is appropriate given the stability of their condition. In many cases these patients will have been on these medicines for many, many years.
I talked to someone yesterday in their 40s, who has been on the same medicine since they were 15, and at the moment has to go to a GP every six months and a pharmacist every month, paying co-payments each time they make that visit for a medicine that they have been receiving in pretty much exactly the same way, not just for years but for decades. This is the sort of patient who will be provided with the opportunity of much more convenience at half the cost.
It is important to stress that this is not unusual. This policy is not unusual across the countries to which we usually compare ourselves. In fact, the current policy restricting these common medicines for chronic disease to only one months’ supply is quite unusual. Two or three months' supply of medicines operates now in the UK, in New Zealand, in Canada, in France, Germany, many parts of the US and a number of other countries besides. This is a very common practice across the world.
I want to stress also this is not new advice. The former government was provided with this advice from the Pharmaceutical Benefits Advisory Committee, admittedly for a smaller tranche of medicines, only about 130 different medicines but they were provided with this advice back in 2018, five years ago, and faced with a choice between providing patients with a substantial cut to the cost of their medicines, or doing nothing, the former government chose to do nothing. As a result, over the past five years, patients with chronic disease have literally shelled out hundreds of millions of dollars in co-payments that they didn't need to shell out. We are going to put an end to that.
This will halve the cost of medicines for we think six million patients living with chronic disease, at a time of enormous cost of living pressure. We think six million will reap these saving. It is also important to stress that cheaper medicines is not just good for the patient's hip pocket, it’s good for their health. I have said a number of times that the Bureau of Statistics says that as many as almost one million Australians go without a medicine or defer getting a script filled because of cost. Dropping the price of medicines is better for patients' compliance with their medicines that their doctor has prescribed as important for their health. We also know from overseas evidence having a larger supply for the medicines improves compliance by 20 per cent. People go off their medicines often when they come to the end of a script because they have trouble getting their script filled, getting into a GP, because of a busy life or they run out of their supply and find it difficult to get to a pharmacist. This will be good for cost of living for the six million Australians, we are confident it will be good for their health and improve medication compliance as well.
I want to stress that the savings that the Commonwealth Government will make from this measure, which are significant and amount to about $1.2 billion over the forward estimates, will be entirely reinvested back into community pharmacy. Every single dollar we save from this measure will be reinvested into programs and services, delivered by community pharmacy to Australian patients. In particular, I want to see pharmacists delivering more services, more health programs, using all of their vast skills and training as health professionals for the benefit of their customers and their patients. I value the work of pharmacy very highly. There is much more that well-trained pharmacists can do to support the health of their community. I want them doing more than just dispensing and processing repeat scripts. They can be doing more, if we are able to get them out from behind the counter, working directly with patients on their health needs. Further details of these measures will be released over coming days. I can indicate in particular that we will be providing additional support to pharmacies in rural agencies, rural communities by doubling the rural maintenance allowance provided to pharmacies in rural areas, given the particular circumstances that we know health services in those parts of Australia face. I do want to reiterate, every dollar that the Commonwealth will save from this measure will be reinvested back into new spending on community pharmacy programs.
In addition, I want to announce a change to a program that we inherited that was announced in the latter part of the former government's tenure to improve medication compliance and medication reviews in residential aged care facilities. The policy announced by the former government would have had that program delivered through aged care facilities themselves. I am announcing today a change to that policy, so that the $350 million allocated in the Budget for that measure will instead be delivered by and through community pharmacies, again, giving those pharmacists an opportunity to show the value that they can provide to the community in delivering services rather than just processing repeat scripts.
This next phase of the government's cheaper medicines policy is safe, it's good for the health of six million Australians and it will halve their costs at a time of unprecedented cost of living pressure. I would have liked to have the opportunity to see the Opposition support this important cost of living measure that's good for hip pockets and good for the Australians' health. I see already Peter Dutton has come out in opposition to this measure, even before the details of the measure have been announced. Perhaps no-one will be surprised that Mr Dutton, given the choice between backing patients or backing profit, has yet again decided to leave patients out in the cold. That is all consistent with his time as Health Minister and with the record of the former government, when having been provided with this advice that could halve the cost of medicines for millions of patients with chronic disease, decided to do nothing and have those patients continue to shell out hundreds of millions of dollars unnecessarily. Happy to take questions.
JOURNALIST: Mr Butler, the Pharmacy Guild is saying that of the 300 medicines that are part of the changes, about 40 per cent have shortages at the moment and that it is all well and good to have double the amount of prescriptions for patients, but double of nothing is still nothing. What is being done to ensure that these medicines that are part of the changes have adequate supplies there, and also particularly for regional and rural pharmacies where their supplies might not be as much as say, the city counterparts?
BUTLER: Firstly, I advise people to take advice around medicine supply and medicine shortages from our medicines authorities rather than the pharmacy lobby group. The actual truth is of the 325 medicines that I have announced today, only 7 of them are experiencing supply shortages. Shortages which are reflected right across the world and are a product of the impact of COVID supply lines. We are obviously taking that very seriously but 7 out of the 325, I just ask people to think about this for more than a few minutes. This is not going to change the number of tablets dispensed in a given period of time. It is simply going to mean that people can get two boxes at a time, instead of having to get one box and come back twice as often. We have very strong arrangements for supply from wholesalers in this country, wholesalers are funded by taxpayers to ensure that any pharmacist that is dealing with supply shortages will have that supply delivered within 24 hours anywhere in this country, whether you are a pharmacy in the city or a pharmacy in regional and rural Australia. I really would caution against some of the scare campaigns being put by the pharmacy lobby group. Very, very few of these 325 very common medicines, for heart disease, for blood pressure, for cholesterol, a range of other diseases, very few - only 7 out of the 325 - have any supply challenge here in Australia and they are being dealt with very consciously by the TGA and other authorities.
JOURNALIST: Can you guarantee no person will go without medicine because of this plan and can you guarantee no pharmacy will have to close because of this plan?
BUTLER: This will not impact the supply and demand of these 300 medicines over a period of time. We have deliberately decided to phase in these arrangements over the course of this year and next year so pharmacists are able to change their itinerary arrangements. It is important to stress that not every patient on these medicines is going to rock up to their pharmacy with a new 60-day script at the same time. Patients will come off their existing scripts at different times. They will have to consult with their GPs about whether they qualify for the 60-day dispensing arrangements and, as I say, there are very strong arrangements we have in place; we pay wholesalers to have in place to ensure every pharmacist can have supply delivered to them within 24 hours. I caution people against taking advice from the pharmacy lobby group about supply arrangements that are monitored very closely by our medicines authorities. As to your second question, I want to reiterate again the Commonwealth is making no savings from this measure. Every single dollar recouped by the Commonwealth Government from pharmacists not having to spend their time processing repeat scripts will be reinvested into programs, health services programs delivered by community pharmacy. I don't pretend this is going to be easy for community pharmacy. I value the work that they do enormously and that is why we have phased this in over this year and next year. But I have to say, when the Advisory Committee for Pharmaceutical Benefits presents government with a choice between halving the cost of medicines for six million Australians with chronic disease, who pay for medicines every single month, year after year, what government can simply look past that advice and say: well, it is all too hard, we will make patients continue to shell out money for their medicines every month, when the medicines authority for five years now has said that is completely unnecessary.
JOURNALIST: Just on aged care, there is growing concern among the sector that facilities are going to have to close under Labor's 24/7 nursing requirement. Do you accept this and are you looking at expanding the exemption criteria to metropolitan facilities?
BUTLER: The first thing I will say about this is we make no apology for taking a strong view about the importance of nursing in nursing homes. When I talk to members of the public and point out to them there is no legal requirement for our nursing homes to have a nurse in it 24/7, people are shocked. We saw a lot of evidence about the decline in clinical governance in aged care facilities through the Royal Commission. We are committed to this policy and the vast bulk of aged care facilities will be able to comply, or already have an arrangement in place to have a registered nurse 24/7. Some of the sector will have difficulty doing this and we will take a risk-based approach to this. We won't be heavy-handed about it. We want to see all these facilities come through this wave of reforms that are designed to improve the care provided to our most vulnerable Australians well. We want to see them come through in shipshape. We are providing substantial additional funds to facilities to be able to provide additional wages for RNs. There are exemption arrangements for small facilities particularly in rural areas that will have difficulty attracting nurses and for those others, that small group of other facilities will take a risk-based approach to it.
JOURNALIST: You said PBAC recommended for some medicines three months’ supply, why hasn't the government gone with that advice? Secondly, you said the Commonwealth is making no savings from this measure, but we have heard that the government needs to find savings in the Budget and the health system is one of the areas that is growing fastest. Would this money be better redirected either in savings or to the broader health system?
BUTLER: The government considered the advice from the Advisory Committee, which essentially provided two options with no particular emphasis on one or the other. Two months' supply or three months' supply of the same group of medicines. And as I said, many other countries around the world provide three months' supply as their dispensing maximum. We have decided to go with two months. We think that is the right balance between the interests of patients and support for a strong community pharmacy sector. As to your second question, if you look at the PBS over recent years, really over a number of years, and the projections in spending on the PBS, there is not particularly strong growth in that, there are good arrangements to contain growth in the PBS, particularly through pricing reforms that have been place within the last 15 years or so. We think as a government where we are making this change which is a very sensible change for the benefit of six million patients, it is proper to reinvest those savings into pharmacists doing more. Pharmacists and their lobby group have been saying to me for a long, long time they want to deliver more services. They want to be recognised as highly trained, highly qualified health professionals rather than just dispensers of medicines through repeat scripts, and we are going to support them in that. We will be providing more funding for them to deliver high quality health services to patients, patients want that. They saw that through the COVID pandemic when the doors of pharmacists remained open. They were often the most accessible health service in their community, and I hear from patients that they want to get more from their pharmacist, rather than just the dispensing of repeat scripts. That is why we think it is important to make this change that will deliver a real cost saving to patients but reinvest all of the savings made by government into broadening and deepening the work that pharmacists can deliver to their community.
JOURNALIST: Do you think that the Pharmacy Guild is working against the best interests of Australians financial and medical needs when they are receiving basically the same amount back in services and even more in the reviews of medications being done in the pharmacies, and you mentioned a couple of months ago now that you want doctors and pharmacists working together, we’re definitely not seeing that now, would you agree with that?
BUTLER: The first thing that I recognise is that the job of the pharmacy lobby group is to support the profitability of pharmacies, and I understand that, we all understand that’s what they get paid to do. My job is to support the interests of patients and I think what was shocking to me is that when the former government was provided with this advice five years ago and had a choice about backing patients, or backing profits, they chose to leave patients out in the cold for five long years. Now, we’re not going to do that, we’re going to back the interests of patients, halve the cost of their medicines at a time of real cost of living pressure. As to the importance of different health groups working together, the very strong message from the Strengthening Medicare Taskforce which delivered a report that we’ll be responding to in Budget, was the importance of different health groups working together, particularly for the patients we’re talking about today who have more complex, chronic disease, who require wraparound care from health teams, and we’re committed to making that a future.
JOURNALIST: Minister, can I ask you about the issue of state and territory governments imposing payroll tax on GP clinics in large centres, do you agree that it’s a problem and that it could further add pressure to the bulk billing system?
BUTLER: Obviously any new, additional cost to general practice is going to be a concern for them, and for me, I’m very worried about the viability of general practice. The payroll tax arrangements that different states have are obviously a matter for states, and I’m not going to get involved in a debate about the particular thresholds or the particular legal operations of their different payroll tac regimes. I’m focused, laser-like focus, on making sure general practice has a strong, sustainable future for all Australians. Because I think we all know, that without general practice, which really is the backbone of our health system, you’re going to see reverberations right through the system.
JOURNALIST: Minister, you have repeatedly criticised your predecessors for not acting on advice they had since 2018, yet you’ve had, the government’s had this updated advice from PBAC for some months now, why are you only acting today?
BUTLER: We received this advice a few months ago, and it is a very substantial measure that impacts the Budget, and as I’m sure you would understand, has been considered in the context of Budget preparation measures. This is a measure that has gone through long deliberation though the Expenditure Review Committee, as would ordinarly be the case, considered as a measure for the 2023-24 Budget, that’s how it’s been treated. I’m announcing it ahead of the Budget, but the treatment of this advice has been quite standard. As I say, we only received it late last year, we obviously had to do a lot of work modelling it, and testing it, and having it run through the Expenditure Review Committee as part of the Budget process and I think that’s pretty standard.
JOURNALIST: The government is saying this will cost $1.2 billion, the Pharmacy Guild is saying $3.5 billion. Do you understand the big difference in cost point that’s coming from?
BUTLER: There’s obviously a saving to the government in the sense that taxpayers won’t be having to pay a dispensing and handling fee every time a patient has to have a script filled on a monthly basis, they’ll be paying it only on a two monthly basis for patients who are identified as appropriate for this by their doctor. But also, there will be a saving to patients. So there’s a saving to the Commonwealth Government, that will be entirely reinvested into community pharmacy programs, but there’s obviously also a saving to patients who won’t be having to shell out money every single month, they will be making a co-payment every two months rather than every month. In addition to that, there will be a saving, frankly, from GP visits. We haven’t costed that, we haven’t modelled that in particular, but we know there will be millions fewer GP visits to get repeat scripts, because instead of having to go every six months, these patients will be able to get their script, plus their five repeats, every 12 months instead of six. Very substantial savings to consumers, obviously much less inconvenience to patients in having to do those fewer visits, and relieved pressure on general practice.