IDEAS home Printed from https://ideas.repec.org/p/her/chewps/2013-01.html
   My bibliography  Save this paper

Pharmaceutical policy in Australia. CHERE Working Paper 2013/01

Author

Listed:
  • Bonny Parkinson

    (CHERE, University of Technology, Sydney)

Abstract

The Commonwealth Government of Australia has subsidised access to drugs since 1948 via the Pharmaceutical Benefits Scheme (PBS). Through the PBS, the Commonwealth Government aims to provide affordable, timely and equitable access to necessary medicines at an affordable cost to the Government. The PBS is one of the three pillars of government funding of the Australian health system. The other two pillars are free treatment in public hospitals, funded jointly by the Commonwealth Government and State and Territory governments, and the Medicare Benefits Scheme (MBS) where the Commonwealth Government subsidises consultations with clinicians occurring out of hospital. Pharmaceutical policy today in Australia is complex as a result of multiple reforms implemented over a number of years. These reforms introduced or changed pre-existing mechanisms with the aim to control prices and manage demand, and thus control expenditure, while maintaining equitable access. However some policies conflict and some result in unintentional, and sometimes detrimental, incentives. Section 1 provides some historical background to the PBS and explains the avenues through which patients can access PBS-subsidised drugs. Section 2 discusses PBS expenditure in the context of total expenditure on drugs in Australia, the high rate of growth in PBS expenditure over time, and the key drivers of the high rate of growth. Section 3 describes the role of the Pharmaceutical Benefits Advisory Committee, focussing on the process used to evaluate the drug, the drivers of PBAC decisions, and issues faced when reviewing currently listed drugs. Section 4 lists several mechanisms that can be used to minimise uncertainty and reduce the risk of making an incorrect decision. Finally Section 5 describes the methods used by the Australian Department of Health and Ageing (DoHA) to manage the costs and demand for, and thus affect uptake of, drugs once listed on the PBS.

Suggested Citation

  • Bonny Parkinson, 2013. "Pharmaceutical policy in Australia. CHERE Working Paper 2013/01," Working Papers 2013/01, CHERE, University of Technology, Sydney.
    • Handle: RePEc:her:chewps:2013/01
    as

    Download full text from publisher

    File URL: http://www.chere.uts.edu.au/pdf/wp2013_01.pdf
    File Function: First version,
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Productivity Commission, 2005. "Impacts of Advances in Medical Technology in Australia," Research Reports, Productivity Commission, Government of Australia, number 17, July.
    2. Richard De Abreu Lourenco & Kim Foulds & Irenie Smoker & Jane Hall, 1999. "The Australian Health Care System, CHERE Discussion Paper No 38," Discussion Papers 38, CHERE, University of Technology, Sydney.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Frank R. Lichtenberg, 2014. "Has Medical Innovation Reduced Cancer Mortality?," CESifo Economic Studies, CESifo Group, vol. 60(1), pages 135-177.
    2. Wydra, Sven, 2015. "Challenges for technology diffusion policy to achieve socio-economic goals," Technology in Society, Elsevier, vol. 41(C), pages 76-90.
    3. Kamil Dybczak & Bartosz Przywara, 2010. "The role of technology in health care expenditure in the EU," European Economy - Economic Papers 2008 - 2015 400, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    4. Frank R. Lichtenberg & Billie Pettersson, 2014. "The impact of pharmaceutical innovation on longevity and medical expenditure in Sweden, 1997-2010: evidence from longitudinal, disease-level data," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(3), pages 239-273, April.
    5. Jennifer Whitty & Sharyn Rundle-Thiele & Paul Scuffham, 2012. "Insights from triangulation of two purchase choice elicitation methods to predict social decision making in healthcare," Applied Health Economics and Health Policy, Springer, vol. 10(2), pages 113-126, March.
    6. Terkel Christiansen & Kelly Dunham & Jørgen Lauridsen & Carl Hampus Lyttkens & Kathryn Mcdonald & Alistair Mcguire & Carine Milcent, 2009. "The influence of economic incentives and regulatory factors on the adoption of treatment technologies: a case study of technologies used to treat heart attacks," PSE-Ecole d'économie de Paris (Postprint) halshs-03168477, HAL.
    7. Vincenzo Atella & Joanna Kopinska, 2018. "New Technologies and Costs," CEIS Research Paper 442, Tor Vergata University, CEIS, revised 09 Aug 2018.
    8. Colombier, Carsten & Weber, Werner, 2009. "Projecting health-care expenditure for Switzerland: further evidence against the 'red-herring' hypothesis," MPRA Paper 26712, University Library of Munich, Germany, revised Jun 2010.
    9. Kees Gool & Gisselle Gallego & Marion Haas & Rosalie Viney & Jane Hall & Robyn Ward, 2007. "Economic Evidence at the Local Level," PharmacoEconomics, Springer, vol. 25(12), pages 1055-1062, December.
    10. Mickael Bech & Terkel Christiansen & Kelly Dunham & Jørgen Lauridsen & Carl Hampus Lyttkens & Kathryn McDonald & Alistair McGuire & and the TECH Investigators, 2009. "The influence of economic incentives and regulatory factors on the adoption of treatment technologies: a case study of technologies used to treat heart attacks," Health Economics, John Wiley & Sons, Ltd., vol. 18(10), pages 1114-1132, October.
    11. Frank R. Lichtenberg, 2014. "The Impact of Pharmaceutical Innovation on Disability Days and the Use of Medical Services in the United States, 1997-2010," Journal of Human Capital, University of Chicago Press, vol. 8(4), pages 432-480.
    12. Frank R. Lichtenberg, 2015. "Pharmaceutical Innovation, Longevity, and Medical Expenditure in Greece, 1995-2010," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 22(2), pages 277-299, July.
    13. Lichtenberg, Frank R. & Tatar, Mehtap & Çalışkan, Zafer, 2014. "The effect of pharmaceutical innovation on longevity, hospitalization and medical expenditure in Turkey, 1999–2010," Health Policy, Elsevier, vol. 117(3), pages 361-373.
    14. Bergh, Andreas, 2016. "The Future of Welfare Services: How Worried Should We Be about Wagner, Baumol and Ageing?," Working Paper Series 1109, Research Institute of Industrial Economics.
    15. Astolfi, Roberto & Lorenzoni, Luca & Oderkirk, Jillian, 2012. "Informing policy makers about future health spending: A comparative analysis of forecasting methods in OECD countries," Health Policy, Elsevier, vol. 107(1), pages 1-10.
    16. Colombier, Carsten, 2012. "Healthcare expenditure projections up to 2060," MPRA Paper 104919, University Library of Munich, Germany.
    17. Gallego, Gisselle & Taylor, Susan Joyce & Brien, Jo-anne Elizabeth, 2009. "Funding and access to high cost medicines in public hospitals in Australia: Decision-makers' perspectives," Health Policy, Elsevier, vol. 92(1), pages 27-34, September.
    18. Abelson, Julia & Giacomini, Mita & Lehoux, Pascale & Gauvin, Francois-Pierre, 2007. "Bringing `the public' into health technology assessment and coverage policy decisions: From principles to practice," Health Policy, Elsevier, vol. 82(1), pages 37-50, June.
    19. Jennifer Whitty & Emily Lancsar & Kylie Rixon & Xanthe Golenko & Julie Ratcliffe, 2014. "A Systematic Review of Stated Preference Studies Reporting Public Preferences for Healthcare Priority Setting," The Patient: Patient-Centered Outcomes Research, Springer;International Academy of Health Preference Research, vol. 7(4), pages 365-386, December.
    20. Lichtenberg, Frank R., 2014. "The impact of pharmaceutical innovation on longevity and medical expenditure in France, 2000–2009," Economics & Human Biology, Elsevier, vol. 13(C), pages 107-127.

    More about this item

    Keywords

    pharmaceuticals; Australia;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:her:chewps:2013/01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Liz Chinchen (email available below). General contact details of provider: https://edirc.repec.org/data/chusyau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.