Growth in expenditure on high cost drugs in Australia

7 Jan 2015

The paper provides an overview of the expenditure of high cost drugs in Australia and examines the average annual growth of these programs. The outlook for expenditure on high cost medicines and possible policy responses is also considered.

Executive summary

• Despite an overall slowing of growth in expenditure on the Pharmaceutical Benefits Scheme (PBS), the section 100 (s 100) program is showing rapid rates of growth.
• The s 100 program provides pharmaceuticals to those living in isolated areas and for the treatment of  complex conditions that require specialist monitoring.
• A number of programs make up the s 100 program.  Those with high growth rates include :
• Expenditure on the Efficient Funding of Chemotherapy  is the fastest growing s 100 program with an average annual growth rate of 62.61 % from 2009–10 to 2013–14 .
• The Highly Specialised Drugs Program grew at a rate of 6.38 % for the same period.
• Although not part of the PBS, the Life Saving Drugs Programme provides access to a limited number of expensive drugs for rare diseases. This programme  grew at a rate of 12.68 % from 2009–10 to 2013–14 .
• The s 100 and LSD P programs provide access to high cost drugs to treat a range of diseases including cancers, HIV /AIDS, Alzheimer’s diseases and a number of rare and life threatening conditions. Patients are protected  from the true cost of these drugs.
• Given predictions about  the  increasing rates  of diseases such as cancer and Alzheimer’s disease, it is likely  that expenditure on these medicines is likely to continue to rise as more people require treatment.  As a general rule, new drugs are usually more expensive than existing treatments.
• One of the objectives of the National Medicines Policy is timely access to medicines that Australians need,  and at cost the community and individuals can afford. Examination of  the expenditure on high cost drugs is warranted to ensure that this policy objective is met.

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