Over the 10 years to 2004–05, the cost of the PBS grew by nearly 13 per cent each year. The increased cost relates to several factors, including newly-developed expensive medicines, over prescribing, an ageing population and increased patient awareness and expectations.
Spending on the PBS may reduce the cost of the wider health system by helping to prevent serious conditions developing thereby reducing hospital stays and other demands on hospitals and other health services.
Listing every medicine on the PBS would quickly make the scheme unsustainable. For example, listing a very expensive new medicine which only provides a marginal benefit over existing alternatives may not be ‘cost effective’.
Although the Government manages the price of each medicine on the PBS, the total cost of the PBS remains uncapped and therefore the overall cost of the Scheme increases as new drugs are added and as need increases. A number of strategies help ensure that the PBS remains affordable for the community while providing access to affordable necessary medicines and helping maintain a viable pharmaceutical industry. These affect all the stakeholders in the system:
- Consumers
- Prescribers
- Dispensers
- Wholesalers
- The Pharmaceutical Industry.