Senator RYAN (Victoria) (16:31): I present the report of the Finance and Public Administration References Committee on the administration of the Pharmaceutical Benefits Scheme, together with the Hansard record of proceedings and documents presented to the committee.
Ordered that the report be printed.
Senator RYAN: I move:
That the Senate take note of the report.
This report outlines one of the great debacles in our Commonwealth health system for many years. This report outlines a government that has exhibited a profound misunderstanding or a profound lack of understanding of the role and importance of the Pharmaceutical Benefits Scheme. For years the Labor Party has attempted to hold itself up as the great saviour of Australia’s public health system but in February this year what the Australian people discovered was that was nothing but a sham. Just like everything else that comes out of this government when it claims to have credibility on the economy, on education or on health policy, it was nothing more than empty rhetoric. I say that because in February this year this government made a major U-turn on how medicines are subsidised for Australians. It made that major U-turn when it decided to defer, rather than consider, the listing of new medicines that had been approved by the Pharmaceutical Benefits Advisory Committee. No obfuscation, no excuse, no amount of spin or rhetoric can actually excuse this, because it did represent a profound change. That is outlined in great detail by the overwhelming response that this committee inquiry received from patient groups, from the pharmaceutical industry and from a rare agreement between the generic pharmaceutical industry and the originator companies of the pharmaceutical industry. But, most importantly, I refer to the overwhelming response of the patient groups who outlined exactly where this government had got it wrong.
This government came out with a number of excuses that explained why it was going to defer consideration of medicines. It did not want to say no. It thought, in typical Labor government style, that might get it into a bit of trouble but it did not want to say yes either. One of the reasons it gave, and this is outlined in the committee report, was ‘there are existing or alternative treatments that are already available or there is no additional clinical benefit’. They were the words of the minister when she put out her statement in February this year stating that these medicines would not be listed, despite the fact that one of the medicines, Botox, for hyperhidrosis, had no alternative treatment available on the PBS that achieved the same outcomes. But if we put that to one side for a second, and I would like to return to that, the patients of Australia and the patient groups that represent them were outraged because this profound misunderstanding can be expressed very simply: there might be eight or 10 different ACE inhibitors on the market and there might be four or five statins on the market and, on a population level when we are looking at samples of 10,000 people, the health outcomes of those may actually be the same but that does not mean they are going to work in 10,000 individuals in the same way. That does not mean that each individual patient is going to have the same response or deliver the same health outcome.
This is at the core of the government’s misunderstanding: the idea that population health assessments mean it is the same for an individual patient. What doctors do, Madam Acting Deputy President, is actually treat you with a different ACE inhibitor or a different statin because different people actually react in very different ways. Yet the government said, for some reason, ‘Oh, there’s another treatment there. It doesn’t matter if we don’t list this other medicine.’ They were not caring at all about the fact that for individual patients this actually meant some of them were not going to get the medicine they needed. This goes to the core of one of the two principles that we have when we are listing new medicines. There is the cost-effectiveness test, as outlined by the Pharmaceutical Benefits Advisory Committee and used in Australia for nearly 20 years. Quite frankly, it is a world-leading example of how to list new medicines. But we also have a cost-minimisation model that allows a company to say, ‘If this medicine B is as good as medicine A for treating blood pressure’—or for treating high cholesterol—’then we can actually list that new medicine as well.’ There is no cost if patients are actually substituting one medicine for another that works better. There may be an additional cost because of the point that I raised earlier, that some patients now have access to a medicine that works. These might all be in the same class of medicines and they might all be very similar but they are very different if they work for you but they do not work for someone else, particularly if you are that person for whom they do not work and now you have the chance of a better health outcome. Ithink I can speak on behalf of the entire committee about what we heard from a particularly brave young woman, Chey-Anne Ellsum from Gippsland in Victoria. I said that I wanted to return to those who suffer from hyperhidrosis. We can disagree on some of the politics of this in the sense of whether it is fair that this medicine was not listed, but I think we will all agree that it was particularly brave of this young woman to put on the record her experience. It impressed the committee and the majority of the committee found her evidence to be particularly persuasive.
The recommendations of the majority of this committee are quite simple. It is that the government retract its statement of February this year when it implied that there had to be cost savings to list new medicines and that it recommit to the memorandum of understanding and really consider the listing of medicines. Only in the world of the modern Labor Party is the deferral of a decision a decision. Only this Labor Party would say that a deferral of a decision constituted a decision. But we will let them live with that, because this is something that needs to be addressed.
Finally, we have also asked that what is known as the $10 million rule be reinstated. The $10 million rule has been very unpopular with the pharmaceutical industry and many industry players. The minister for health had the capacity to list new medicines, without reference to cabinet, as long as the medicines did not cost more than $10 million in any given year. What we have in Australia increasingly now is a lot of smaller population medicines that treat very small numbers of people and that do not actually provide a huge commercial return. This rule provided those industry participants with certainty. It meant that patients with very small numbers of fellow patients suffering the same condition could get access to medicines because, once the PBAC approved it, the minister had the capacity to list it. We are not saying that cabinet should not be able to consider the more expensive medications but that when the cost of a medicine is less than $10 million and the government—a government for which we can simply add up the tens of billions of dollars that have been wasted in a budget that has gone from $260 million to $350 billion in only four years and billions were wasted on pink batts and school halls—tries to tie the denial of access to new medicines to the idea of fiscal rectitude, this not only shows its profound inability to handle Commonwealth finances but also its lack of prioritisation of what really matters to the Australian people.
I will comment briefly on a couple of comments made in the dissenting report of the ALP members of the committee. In paragraph 1.14 they claim that this has been done before when the previous government refused to list Viagra. To all those people who are suffering hyperhidrosis and to all those people who have conditions for which there is no available treatment, I urge them to hold Labor to that statement that somehow this is actually comparable to not listing Viagra. I am not trying to dismiss any particular medical condition but a decision was made at that point that we had to prioritise the treatment of conditions. What Labor has done with this decision is prioritise the treatment of individual patients. What really matters now is whether or not you are lucky enough to have one of the medicines that is currently listed and that works.
The government members are disingenuous in paragraph 1.15 where they say that previous PBAC recommendations had not been followed. Those recommendations did not deny access to medicines; they were pricing decisions. Those recommendations did not actually mean that a patient could not get access to a medical treatment. They were simply about the administration of the PBS. It is misleading to try and compare that decision to this one. This represents, in the words of a number of the stakeholders that came before the committee, a profound change in the administration of pharmaceutical benefits in Australia.
I urge people who are interested in this area of policy to read the report. It is quite extensive. I would like to conclude by thanking, as always, the exceptional work of the committee secretariat. We would not be as effective in our jobs without their ongoing and tireless support.