Pharmaceutical Benefits Scheme (PBS) Scorecard - The Guild

Medicines Partnership of Australia
Government spending on PBS remains under control
Pharmaceutical Benefits Scheme (PBS) Scorecard
November 2011
Figure 1 – Recent PBS data shows growth remains low and is continuing to trend downwards
Growth in government expenditure on the PBS in the year ended 30 September 2011 was 5.7%. After adjusting for
inflation, this represents growth of approximately 2% in real terms. This is a sustainable level of growth, and existing
arrangements such as price disclosure will ensure expenditure remains well under control. Further price reductions,
unrelated to PBS Reforms, take effect from 1 December 2011 and a major round of PBS Reform price reductions is
due to take effect on 1 April 2012. The April reductions will average 23% across more than 200 drugs.
Figure 1: PBS Growth - prescriptions and Government expenditure (Moving Annual Total , MAT)
PBS growth - prescriptions and government expenditure
(Moving Annual Total,MAT)
25%
20%
15%
21% increase in patient
co-payment
12.5% price policy
New listings
pre-election
PBS Reforms
price reduction
GFC and
Global
economic
downturn
Unemployment
rises by 21% in
the year to Dec
2009
Unemployment
drops by 8.6% in
the year to June
2010
% change
10%
Change to seniors
healthcare card
eligibility
Further PBS
reforms
price reduction
5%
5.7%
3.3%
0%
-5%
Mar-03
Jun-03
Sep-03
Dec-03
Mar-04
Jun-04
Sep-04
Dec-04
Mar-05
Jun-05
Sep-05
Dec-05
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Expenditure
Prescription
Source: Medicare Australia. Excludes expenditure on s100 drugs including highly specialised drugs (HSD) used in public hospitals.
November 2011

Medicines Partnership of Australia
Government spending on PBS remains under control
Pharmaceutical Benefits Scheme (PBS) Scorecard
Figure 2 - PBS growth is declining decade on decade
The ten year average growth in PBS in the last decade (2000-2010) was one of the lowest since the 1980’s. The
Department of Health and Ageing Annual Report 2010-11 reported that in the year to 30 September 2011, PBS
expenditure grew by 5.7%. The current growth rate reaffirms that the long term downward trend is continuing.
Figure 2: Ten year average expenditure growth (1960-2011)
Source: Department of Health and Ageing, Annual reports , various years.
November 2011

Medicines Partnership of Australia
Government spending on PBS remains under control
Pharmaceutical Benefits Scheme (PBS) Scorecard
Figure 3 - PBS as a % of GDP remains stable
Over the last decade, PBS expenditure as a proportion of GDP has remained steady at between 0.6% and 0.65%.
Figure 3: PBS expenditure as a proportion of Australian GDP
0.60%
0.63% 0.64% 0.65%
0.62%
0.59% 0.59% 0.61%
0.64% 0.63%
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Source:PBS expenditure-DoHA Annual Reports, Department of Health and Ageing, Various Years.
GDP-Australian Bureau of Statistics, catalogue 5206.0 - Australian National Accounts: National Income, Expenditure and Product, various years
November 2011

Medicines Partnership of Australia
Government spending on PBS remains under control
Pharmaceutical Benefits Scheme (PBS) Scorecard
Figure 4: PBS as a proportion of GDP – Actual vs Projected
Australia’s 2010 Intergenerational Report predicted that expenditure on the PBS will remain steady at 0.7% of
GDP through to 2020. Already, actual expenditure in 2009-10 and 2010-11 was below the 0.7% of GDP forecast in
Intergenerational Report 2010.
Figure 4: PBS on track and sustainable
PBS as a proportion of Australia GDP - Projected vs Actual
0.7%
0.7% 0.7%
0.6% 0.6%
2009-10 (IGR 2010) 2009-10 (Actual) 2010-11(Actual) 2014-15 (IGR 2010) 2019-20 (IGR 2010)
Projected
The Medicines Partnership of Australia (MPA) is an alliance of peak industry associations representing key members in
the supply chain that deliver medicines and pharmacy expertise to Australian consumers. Its members include Medicines
Australia, the Australian Self Medication Industry, the National Pharmaceutical Services Association, the Pharmacy
Guild of Australia, the Pharmaceutical Society of Australia and the Generic Medicines Industry Association.
November 2011