Yesterday’s Budget contained some major health measures – good for some, not so good for others.  Media commentators have hailed it as everything from ‘sensible’ and ‘weird,’ to ‘brave,’ and ‘dignified.’ Whichever way you look at it, it’s a budget from a Government which is highly unlikely to remain in power beyond the September 2013 election and as such, wants to leave a legacy of sorts.

Nonetheless there were some health measures worth taking note of. DisabilityCare was clearly a big winner as Treasurer Wayne Swan announced $1 billion to support the first stage of a National Disability Insurance Scheme (NDIS), with full implementation to be achieved by 2019.

Health Minister Tanya Plibersek announced a $226.4 million World Leading Cancer Care package aimed at reinforcing Australia’s position as a world-leader in cancer research, prevention and treatment.

However a planned freeze on indexation of MBS rebates, garnering a $644.4 million saving over four years has angered doctor and patient groups, who say it may lead to a drop in bulk billing and higher costs for patients.

Still on doctors, the Government will tighten Medicare item claiming by preventing duplication where GPs may claim a Medicare rebate for a GP standard consultation item and a GP Chronic Disease Management item for the same patient on the same day, effective from November 1, 2014 – saving $119.6 million over four years.

The Government will increase the Extended Medicare Safety Net (EMSN) threshold to $2,000, a saving of $105.6 million over four years. They will also spend $10 million over two years on a campaign to inform Australians about the benefits of Medicare services, rebates, safety nets and Medicare Locals.

Impact on Pharma

While the impact of this Budget on the pharmaceutical industry will not be groundbreaking, there was a pledge by Health Minister Tanya Plibersek for further investment in the Pharmaceutical Benefits Scheme, (PBS) “to ensure that Australians have timely and affordable access to cost effective, high quality medicines at an affordable cost.”

The Government has also agreed to a number of new and amended listings on the Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme (RPBS) at a cost of $686.7 million over five years. (See the details here)

There will be a number of price increases for certain medicines currently listed on the Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme (RPBS), at a cost of $3.8 million over five years.

The Government has negotiated reduced prices for the Alzheimers Disease medicines donepezil, rivastigmine, galantamine and memantine from April 1, 2013, and simplified access from May 1, 2013.

The Government will also contribute $1.4 million over two years towards research into the development of a vaccine to prevent acute rheumatic fever.

Medicines Australia Chief Executive, Dr Brendan Shaw has welcomed the Government’s recognition in the Budget that the Memorandum of Understanding (MoU) with Medicines Australia continues to keep the PBS sustainable.

Dr Shaw said the Budget reflected the Government’s commitment to the MoU, which agrees to no further price-related savings measures for the life of the agreement.

Other Health Budget Measures:

  • Continued funding of the National Perinatal Depression Initiative – spend of $37.4 million over four years
  • Investing $1.3 billion over the next four years in additional funding for Australians to visit a GP. An additional 14.1 million GP services will be funded through the universal health care system over the next four years
  • Early detection of breast cancer through expansion of the target age range for women invited to participate in BreastScreen Australia program from 50–69 years of age to 50–74 years of age – $55.7 million over four years as part of a wider $266 million Cancer Care package
  • Allocating $14.9 billion for public hospitals in 2013-14, an increase of $871 million on last year
  • Closing the Gap in Indigenous Health Outcomes – $777 million spend over three years
  • Continued funding for General Practice Rural Incentives Program (GPRIP) – $33.8 million over next 12 months.

While Treasurer Wayne Swan’s hands were effectively tied by revenue write-downs and a high dollar, the budget that was supposed to deliver a surplus in 2012-13, has now turned into an expected deficit of AU$19.4 billion – with an A$18 billion deficit to follow in 2013-14.