Online version of the 2014-15 Department of Health Annual Report
- Provided patients with timely ongoing access to affordable and high quality medicines and pharmaceutical services. This was achieved by subsidising medicines through the Pharmaceutical Benefits Scheme (PBS) and associated programmes, including the Life Saving Drugs Programme (LSDP) and by supporting the provision of aids and appliances through programmes such as the National Diabetes Services Scheme and the Stoma Appliance Scheme.
- Signed five year agreements with the Generic Medicines industry Association (GMiA) and the Pharmacy Guild of Australia (the Guild) as part of a broader range of measures across the pharmaceutical supply chain. GMiA, the Guild, Medicines Australia, the Consumers Health Forum and over 20 other stakeholders were consulted as the Pharmaceutical Benefits Scheme Access and Sustainability Package was developed. The measures will deliver funding for community pharmacy through the Sixth Community Pharmacy Agreement (6CPA) and support access to new medicines by improving the operation of the PBS, while keeping it sustainable. Stakeholders are broadly supportive of the package.
- Approved 394 new and amended PBS listings (including 28 price changes), at an overall cost of $2.1 billion, to treat a range of illnesses. This equates to an average of 33 new and amended listings per month.
- Developing, implementing and integrating ‘ePBS’ tools inclusive of electronic prescribing, dispensing and claiming in a rapidly developing eHealth environment. The eHealth information landscape is rapidly evolving, creating real challenges for health care participants and providers developing and delivering ePBS tools across multiple and varied health care settings and jurisdictions.
- Substantially completing the post-market review of the LSDP, which is expected to report later in 2015. The review is examining important issues such as access and equity, value for money and the future administration of the programme.
- The expiry of agreements with both the pharmacy and pharmaceutical industries required the negotiation of new agreements. New agreements were achieved with the Guild and the GMiA. The Department will continue to work constructively with Medicines Australia outside of an agreement.
In 2015-16, the Department will continue to support the Government to introduce and implement a balanced range of measures to support the longer term access to, and sustainability of, the PBS in accordance with the PBS listing framework, including the listing of biosimilar medicines.
The Department will ensure the recommendations from the Australian National Audit Office Report No.25 Administration of the Fifth Community Pharmacy Agreement are addressed.
The Department will implement the 6CPA, and undertake a range of tenders to ensure value for money in its administration. Some pharmacy programmes and services will be reviewed for cost effectiveness, while reviews will also commence on pharmacy remuneration and the pharmacy location rules.
To further ensure Australians continue to have affordable and timely access to new medicines, the Department is undertaking a review of the Pharmaceutical Benefits Advisory Committee (PBAC) guidelines for preparing submissions.
Programmes Contributing to Outcome 2
- Programme 2.1: Community Pharmacy and Pharmaceutical Awareness
- Programme 2.2: Pharmaceuticals and Pharmaceutical Services
- Programme 2.3: Targeted Assistance – Pharmaceuticals
- Programme 2.4: Targeted Assistance – Aids and Appliances
Division Contributing to Outcome 2
In 2014-15, Outcome 2 was the responsibility of the Pharmaceutical Benefits Division.
In 2014-15, the Department worked to achieve this Outcome by managing initiatives under the following programmes.
Programme 2.1 aims to support timely access to medicines and pharmacy services through the Fifth Community Pharmacy Agreement (the Fifth Agreement).
Support timely access to medicines and pharmacy services through the Fifth Community Pharmacy Agreement
The Fifth Agreement, which ceased on 30 June 2015, remunerated pharmacists for dispensing PBS medicines and for providing a range of professional programmes and services that aimed at improving consumer health outcomes.
In 2014-15, the Government funded over 20 programmes to support the delivery of pharmaceutical services and quality use of medicines through community pharmacies and by pharmacists. In particular, as at June 2015, the Government spent over $17 million to support sustainability of community pharmacies in rural and remote Australia through the Rural Pharmacy Workforce Programme, the Rural Pharmacy Maintenance Allowance and other rural programmes. Further, more than $33 million was spent on the delivery of over 290,000 medication management services which aimed to improve the quality use of medicines, reduce medication misadventure among people using multiple medicines, as well as improve consumer education to optimise self-management of medicines. Additional information relating to Fifth Agreement programmes is available on the Department’s website.15
In 2014-15, the Department worked in consultation with the Australian Commission on Safety and Quality in Health Care and key stakeholders to develop a national standardised paper and electronic based PBS hospital medication chart for use in public and private hospitals, contributing to improved patient safety and a reduced PBS regulatory burden for health care providers.
|Qualitative Deliverable:||Phased roll out of measure: Supply and PBS Claiming from a Medication Chart in Residential Aged Care Facilities and public and private hospitals.|
|2014-15 Reference Point:||Continue measure phase in, as the Government is working to expand the supply and claiming of PBS medicines dispensed from medication charts to include all public and private hospitals.|
Paper-based trials of the PBS hospital medication chart for use in public and private hospitals have commenced. The trial and its evaluation will inform full implementation of the measure inclusive of electronic medication charts.
|Quantitative Deliverable:||Number of medication management services provided under the Fifth Agreement.|
In 2014-15, some 71,354 services were funded through the Home Medicines Review Programme, 91,672 services were funded through the Residential Medication Management Programme and 130,420 services were funded through the MedsCheck/Diabetes MedsCheck Programme.
|Qualitative KPI:||Medication Management Review Programmes are achieving individual programme objectives.|
|2014-15 Reference Point:||Finalisation of the Combined Review of Fifth Community Pharmacy Agreement Medication Management Programmes.|
The Combined Review of the Fifth Community Pharmacy Agreement Medication Management Programmes, which was undertaken by PricewaterhouseCoopers, commenced on 23 July 2013 and was completed on 15 January 2015. The results of this review will be considered as part of a cost effective review of pharmacy programmes and services.
|Quantitative KPI:||Percentage of rural community pharmacies accessing targeted rural programmes to support the sustainability of community pharmacy in rural and remote Australia.|
In 2014-15, 73% of rural community pharmacies (650 of 894) accessed one or more elements of targeted rural programmes.
|Quantitative KPI:||Percentage of community pharmacies participating in the Pharmacy Practice Incentives Programme.|
In 2014-15, 93% of community pharmacies participated in one or more components of the Pharmacy Practice Incentives Programme.
Programme 2.2 aims to ensure the sustainability of the PBS, and to provide access to clinically effective, innovative, cost-effective medicines to all Australians.
List cost-effective, innovative, clinically effective medicines on the PBS
The PBS aims to provide Australians with timely access to a wide range of affordable and cost-effective medicines. As at June 2015, under the PBS there were 793 medicines available in 2,066 forms and strengths, marketed as more than 5,300 differently branded items. In 2014-15, the PBS cost $9.1 billion. Over 211 million PBS prescriptions were processed in 2014-15 compared to 210 million in 2013-14.
|Qualitative Deliverable:||The PBAC provides recommendations to the Minister on new listings for the PBS, and the National Immunisation Program.|
|2014-15 Reference Point:||The PBAC recommendations for listing on the PBS are based on the clinical effectiveness and cost-effectiveness of new medicines, and provided in a timely manner.|
The PBAC met on five occasions during 2014-15, including two special meetings in December and April. The PBAC recommendations were provided to product sponsors and the Minister for Health, and made publicly available in timeframes consistent with long standing arrangements agreed with the pharmaceutical industry. All PBAC assessments are based on the clinical and cost-effectiveness of the medicine.
|Qualitative Deliverable:||Price negotiations with sponsors and conditions for listing finalised, and quality and availability checks undertaken for new PBS listings.|
|2014-15 Reference Point:||All negotiations and listing activity completed in a timely manner and consistent with PBAC outcomes.|
All negotiations with product sponsors and listing requirements for new and amended listings of medicines on the PBS were completed in a timely manner. The price of each drug listed on the PBS, by anatomical therapeutic chemical group, continued to be reviewed annually.
|Quantitative Deliverable:||Percentage of the community’s (public) comments included for consideration at each PBAC meeting.|
In 2014-15, there were 3,364 consumer submissions on matters before the PBAC, compared with 2,712 received in 2013-14 and 792 in
|Quantitative KPI:||Revenue received from the cost recovery of the PBS listing process.|
PBS cost recovery arrangements for the listing of new medicines or vaccines, or to vary the listing of existing products, were introduced from 1 January 2010. Revenue depends on external factors, such as the type and number of submissions, and the number of waivers and exemptions applicable. On average 1 in 4 submissions considered by the PBAC are not charged fees
Increase the sustainability of the PBS
The Government needs to ensure that the PBS is managed in a fiscally responsible and sustainable way. PBS policies need to strike a balance between providing access to new, innovative and often very expensive medicines, but at a cost patients and the community, including taxpayers, can afford.
From 1 July 2015, the Government will introduce and implement a balanced range of measures to support the longer term access to, and sustainability of, the PBS. These have been developed through extensive consultation with a range of PBS stakeholders including consumers, the pharmacy and pharmaceutical sectors, and other health professional groups, with negotiations being finalised after the 2015-16 Budget.
These measures are designed to help bring new and innovative medicines on to the PBS in a more timely manner, and ensure efficiency in the pharmaceutical supply chain.
The Department continues to recommend, for approval by the Minister for Health, listings for the PBS that are estimated to cost $20 million or less in each of the forward estimates years. Proposals that will cost more than $20 million in any one year will require approval by the Cabinet. This tiered approval process provides faster listing times for some medicines and improved patient access to important new treatments.
Following recommendations from the PBAC, in 2014-15, the Government approved 394 new and amended PBS listings (including 28 price increases), at an overall cost of $2.1 billion17,18 over the forward estimates, to treat a range of illnesses. This equates to an average of 33 new and amended listings per month.
This includes the listing of nab paclitaxel (Abraxane®) from 1 November 2014 for the treatment of advanced pancreatic cancer, at an overall cost of $119.5 million. More than 1,500 patients per year, who would otherwise have to pay an average of $16,000 for a course of treatment at an average cost of $1,300 per script, will benefit from this listing.
In addition, from 1 December 2014, a new treatment for Australians living with cystic fibrosis was listed on the PBS: ivacaftor (Kalydeco®). Ivacaftor is the first medicine to treat the underlying cause of cystic fibrosis in patients with the G551D mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene. Without government subsidy, eligible patients would pay more than $300,000 per year to access treatment.
Table 2.1: High cost medicines listed in 2014-15
Estimated number of patients per annum
Estimated expenditure – WoG 5 years (fiscal – excludes revenue)
|Ivacaftor (Kalydeco®)||Cystic fibrosis||1 December 2014||
|Eculizumab (Soliris®)||Atypical haemolytic-uraemic syndrome||1 December 2014||
|Nab paclitaxel (Abraxane®)||Advanced pancreatic cancer||1 November 2014||
|Botulinum toxin Type A (Botox®)||Urinary incontinence (idiopathic overactive bladder)||1 November 2014||
|Quantitative KPI:||Estimated savings to Government from PBS Reforms.|
PBS Reforms, including the Price Disclosure Programme, saved the Government $2,014.4 million in 2014-15. This is the savings achieved in 2014-15 only and includes all rounds of Price Disclosure prior to 30 June 2015; savings from the 2% and 5% reductions on
The Post-market Programme has been designed to improve patient safety, and quality use of medicines through a coordinated governance framework that draws on existing programmes and data sets to monitor the actual use of medicines in clinical practice. This programme ensures ongoing reviews of PBS listed items and associated programmes with a focus on improving health outcomes for patients and costs for taxpayers. This allows the earlier identification of quality use of medicines issues, improved prescribing and dispensing through an enhanced ability to target education and support, and improves the sustainability of the PBS through the assessment of medicines use in the real world, including cost-effectiveness reviews. The Department, in collaboration with industry, developed a revised post-market review framework in 2014-15, which was published on the PBS website in March 2015.
In July 2014, the PBAC considered the post-market review of PBS medicines used to treat asthma in children, and the Department is now implementing the PBAC’s recommendations. The reviews of insulin pumps and type 2 diabetes medicines were also completed, finalising the post-market review of products used for the management of diabetes. The Diabetes reports were published at the Pharmaceutical Benefits Scheme (PBS) website.
The post-market review of the Life Saving Drugs Programme (LSDP) was substantially completed and is expected to report later in 2015.
The Review of Authority requirements for PBS-listed medicines is being undertaken in three tranches. The PBAC has considered: injectable chemotherapy medicines (July 2014); Tranche 1 - cancer, multiple sclerosis and arthritis medicines (December 2014); Tranche 2 - eye, psychiatric and cardiovascular medicines (March 2015); and will consider Tranche 3 - palliative care and all remaining medicines later in 2015.
As part of the Authorities review, stakeholder forums were held on opioids and antibiotics in May 2015, to consult health professionals, researchers, industry and consumers on how to best reduce regulatory burden, while managing risks to the community from antimicrobial resistance and opioid misuse and diversion.
Changes to the PBS, when implemented, will reduce regulatory burden and allow health professionals more time for patient care.
The Department also initiated a review of the PBAC guidelines for preparing submissions during 2015-16.
|Qualitative Deliverable:||Undertake reviews of medicines in use, focusing on the appropriate and quality use of medicines.|
|2014-15 Reference Point:||Complete reviews of medicines used to treat asthma in children, medicines and products used to manage diabetes, the Life Saving Drugs Programme and phased outcomes from the PBS Authorities review.|
Reports for the review of medicines used to treat asthma in children, and medicines and products used to manage diabetes were finalised. The Authorities Review is substantially completed with recommendations made at the July 2014 PBAC meeting resulting in a change (by 1 February 2015) to the restrictions for 11 chemotherapy medicines, and from the December 2014 PBAC meeting change (by 1 May 2015) to the restrictions for 59 PBS listings (17 medicines), removing the requirement for a telephone authority prior to prescribing. The LSDP review was substantially completed and will report to the Minister for Health later in 2015.
Programme 2.3 aims to improve access to new and existing medicines for patients with life threatening conditions.
Provide access to new and existing medicines for patients with life threatening conditions
The LSDP provides patients with financial assistance to access expensive and life saving drugs not available on the PBS. In 2014-15, through the LSDP, the Government provided 278 eligible patients with access to ten fully subsidised medicines to treat seven very rare life threatening medical conditions. This compares to 257 eligible patients in 2013-14.
Ten drugs are currently funded through the programme to treat seven serious and very rare medical conditions. These conditions are: Fabry, Gaucher, Mucopolysaccharidosis Types I, II and VI, Pompe disease (Infantile- and Juvenile-onset), and Paroxysmal Nocturnal Haemoglobinuria. Treatment for Infantile-onset Pompe disease has been funded through the LSDP since February 2010, with treatment for Juvenile Late-onset Pompe disease funded since February 2015.
On 9 April 2014, the Minister for Health announced a post-market review of the Life Saving Drugs Programme (LSDP Review). The LSDP Review is providing the opportunity to review the current programme in order to ensure that Australians with very rare conditions continue to have subsidised access to much-needed, expensive medicines. The LSDP Review is examining important issues such as access and equity, value for money and the future administration of the programme.
In 2014-15, the Department continued to work with industry to finalise Deeds of Agreement for terms of supply for all medicines supplied through the LSDP, with risk share arrangements to effectively manage expenditure.
|Qualitative Deliverable:||Review programme guidelines to ensure they remain current and relevant.|
|2014-15 Reference Point:||Programme guidelines reviewed within agreed timeframes.|
All LSDP guidelines were reviewed, within agreed timeframes, to ensure currency with administrative processes.
|Quantitative Deliverable:||Number of patients assisted through the Life Saving Drugs Programme.|
Through the Department, the Government provided a total of 278 patients with access to fully subsidised medicines for the treatment of their very rare life threatening medical conditions. Eighteen more patients than anticipated were provided with assistance due to the demand driven nature of the programme. This compares with 210 patients in 2010-11, 215 patients in 2011-12, 228 patients in
|Qualitative KPI:||Eligible patients have timely access to the Life Saving Drugs Programme.|
|2014-15 Reference Point:||Patient applications are processed within 30 calendar days of receipt.|
All patient applications were processed within 30 calendar days of receipt of the complete data package to support the application.
|Quantitative KPI:||Percentage of eligible patients with access to fully subsidised medicines through the Life Saving Drugs Programme.|
All eligible patients were provided with access to fully subsidised medicines for the treatment of very rare life threatening medical conditions.
Programme 2.4 aims to provide access to necessary products and services to support people of all ages with type 1, type 2, gestational and other diabetes to effectively manage their condition. Programme 2.4 also assists people with stomas to access fully subsidised stoma-related products, and supports access to clinically appropriate dressings to improve the quality of life for people with Epidermolysis Bullosa.
Provide support for people with diabetes
The National Diabetes Services Scheme (NDSS) provides access to a range of products, including blood glucose test strips and insulin pump consumables, to more than one million people with diabetes. The NDSS is managed by Diabetes Australia on behalf of the Department, and represents an investment of $1 billion over the life of the current Agreement, which commenced on 1 July 2011 and will end on 30 June 2016.
The Type 1 Diabetes Insulin Pump Programme, administered by the Juvenile Diabetes Research Foundation (JDRF), delivers subsidised insulin pumps to children with type 1 diabetes from eligible families, who would benefit from this technology.
|Qualitative Deliverable:||Provide access to insulin pumps and associated consumables for children under 18 years of age with type 1 diabetes.|
|2014-15 Reference Point:||Work with the scheme administrator to ensure insulin pump subsidies are provided efficiently.|
In 2014-15, the programme provided access to insulin pump therapy in accordance with the guidelines and available funding for the Programme. The JDRF continued to undertake promotional and marketing activity to ensure families of children with type 1 diabetes could apply for a subsidy where otherwise they may not have been able to receive this therapy.
|Quantitative Deliverable:||Number of people with diabetes receiving benefit from the NDSS.|
The NDSS is a demand-driven programme. In 2014-15, the number of people with type 1, type 2 and gestational diabetes receiving benefit from the NDSS was 1,176,180. However, there were also a further 83,023 people registered on the post-gestational diabetes register who were also eligible to receive services from the NDSS. All eligible individuals were provided access throughout the financial year, noting growth was lower than anticipated.
|Quantitative Deliverable:||Number of people under 18 years of age with type 1 diabetes receiving a subsidised insulin pump.|
In 2014-15, the target number of subsidised insulin pumps was substantially met. During this financial year more families required the full subsidy for their insulin pump, instead of a partial subsidy as had been anticipated.
|Quantitative KPI:||Number of diabetes related products provided to eligible people through the NDSS.|
The target is based on an estimated registrant need. All eligible applicants were able to access clinically appropriate products they required in 2014-15, noting growth was lower than anticipated.
|Qualitative KPI:||The NDSS meets the needs of stakeholders.|
|2014-15 Reference Point:||Annual survey of registrants conducted by Diabetes Australia demonstrates that the needs of stakeholders are being met.|
Diabetes Australia is required to undertake an annual customer satisfaction and awareness survey. The results for the 2014-15 Survey are not available at this time, however, the 2013-14 NDSS Satisfaction Survey demonstrated considerable support for the Scheme among the registrant base.
Assist people with a stoma by providing stoma related products
In 2014-15, the Department continued to operate the revised programme pricing and listing framework for the Stoma Appliance Scheme. This included listing 52 new products, amending 15 product listings and deleting five products from the Schedule. New and revised listings of stoma products offer a wider choice of subsidised products for people with a stoma. In addition, reviews of products on the Schedule have continued.
|Quantitative Deliverable:||Number of people receiving stoma related products.|
In 2014-15, 42,678 people received stoma related products. This compares to 42,228 in 2013-14. All eligible people with stomas were able to receive products.
|Quantitative KPI:||The number of stoma products supplied to eligible people on the Stoma Appliance Scheme.|
Eligible people with stomas were able to access a range of over 400 clinically appropriate products for the treatment and management of stoma-related conditions. The slight reduction in products is due to the demand driven nature of the programme.
Improve the quality of life for people with Epidermolysis Bullosa
The Department continued to provide access to clinically appropriate dressings for people with Epidermolysis Bullosa through the National Epidermolysis Bullosa Dressing Scheme. The Scheme continues to assist people with Epidermolysis Bullosa by reducing the financial burden associated with purchasing necessary dressings.
In 2014-15, the contract for the supply and administration of these products was subject to an open approach to the market to ensure best value for money. A new contract with the successful tenderer was executed on 2 January 2015.
|Quantitative Deliverable:||Number of people with Epidermolysis Bullosa receiving subsidised dressings.|
The number of people with Epidermolysis Bullosa who are receiving subsidised dressings has significantly increased, in line with changes made in 2012-13 to expand eligibility for the Scheme to all age groups. In
Outcome 2 – Financial Resource Summary
(B) - (A)
|Programme 2.1: Community Pharmacy and Pharmaceutical Awareness|
|Ordinary annual services (Appropriation Act No. 1)||405,929||392,818||(13,111)|
|Departmental appropriation 1||10,199||9,601||(598)|
|Expenses not requiring appropriation in the budget year 2||419||568||149|
|Total for Programme 2.1||416,547||402,987||(13,560)|
|Programme 2.2: Pharmaceuticals and Pharmaceutical Services|
|Ordinary annual services (Appropriation Act No. 1)||197,488||195,481||(2,007)|
|National Health Act 1953- pharmaceutical benefits||9,283,968||9,072,126||(211,842)|
|Departmental appropriation 1||44,430||46,383||1,953|
|Expenses not requiring appropriation in the budget year 2||3,099||3,667||568|
|Total for Programme 2.2||9,528,985||9,317,657||(211,328)|
|Programme 2.3: Targeted Assistance - Pharmaceuticals|
|Ordinary annual services (Appropriation Act No. 1)||151,230||149,100||(2,130)|
|Departmental appropriation 1||3,957||3,124||(833)|
|Expenses not requiring appropriation in the budget year 2||122||175||53|
|Total for Programme 2.3||155,309||152,399||(2,910)|
|Programme 2.4: Targeted Assistance - Aids and Appliances|
|Ordinary annual services (Appropriation Act No. 1)||596||537||(59)|
|National Health Act 1953- aids and appliances||312,898||293,442||(19,456)|
|Departmental appropriation 1||2,402||2,209||(193)|
|Expenses not requiring appropriation in the budget year 2||94||131||37|
|Total for Programme 2.4||315,990||296,319||(19,671)|
|Outcome 2 Totals by appropriation type|
|Ordinary annual services (Appropriation Act No. 1)||755,243||737,936||(17,307)|
|Departmental appropriation 1||60,988||61,317||329|
|Expenses not requiring appropriation in the budget year 2||3,734||4,541||807|
|Total expenses for Outcome 2||10,416,831||10,169,362||(247,469)|
|Average staffing level (number)||251||253||2|
- Departmental appropriation combines ‘Ordinary annual services (Appropriation Act No. 1)’ and ‘Revenue from independent sources (s74)’.
- ‘Expenses not requiring appropriation in the budget year’ is made up of depreciation expense, amortisation, make good expense and audit fees.