Senate Community Affairs Legislation Committee [Part 2], , 1:23:24 to 1:27:11
Senator Stewart inquires about budget measures to lower medicine costs, focusing on how the PBS safety net threshold works for general and concessional patients.
Topics: Health
Speakers: Mike Pope, Senator Jana Stewart, Unknown Speaker
>> Thank you, Chair. >> I'm interested in the budget measures regarding cheaper medicines. Thank you. There have been several stages to this government's actions to make medicines cheaper uh that I want to understand. In July 2022, the government lowered the PBS safety net threshold. Can you tell me how that
Uh thanks Senator. Um Mike Pope uh technology assessment and access division. So the PBS safety net uh places a upper limit uh for um the co-ayments that a patient may pay over the course of a calendar year. for general patients uh who pay at the moment a $25 co-ayment uh once they reach the concessional uh uh sorry once they reach the safety net uh their co-ayments reduced to the concessional rate for concessional patients who currently pay $7.70 for each uh co-ayment. Once they reach the safety net u for concessional patients they uh no longer pay a co-ayment at all. So the co-ayment drops to zero and there are thresholds that are separate for the concessional and the um general uh patient co uh for general patients.
Thank you. Um in October 22, 2022, the government reduced the price of 2,000 brands of medicine and then in January 2023, the government delivered the largest price reduction in the history of the PBS. Do we know how much those price reductions have saved Australians?
>> Senator, I'd have to take on notice the cumulative uh um savings over um the period since then. Um uh but uh I think uh essentially um you've got a uh a measure at the time um that was uh has been sort of built on um since then. So I'll have to take on notice exactly what the savings are over that period of
>> Yeah. And I know that it's it's one of the things that uh so many people in, you know, my family, my community are certainly seeing the benefits of uh not having to choose between putting food on the table and uh whether they can look after their health. You know, that's uh really uh really important for so many people in this country. [sighs]
>> sorry, Senator, I have actually found that figure now so I don't have to take it on notice anymore. [laughter] Uh so sorry that there's been a cumulative set of changes. So the savings associated with the cut in 2023 um have saved uh an estimated $465.6 million in the 2025 calendar year.
>> So I say that again for
>> uh so um uh so in January 2023 as you referred to um the largest cut to PBS medicine costs >> was introduced. It reduced the maximum co-ayment from $42.50 to $30. And then following annual indexation, the co-ayment rose again, but uh um it's since been reduced to $25 uh from the 1st of January of this year. Um that reform delivered significant savings. So $45.6 million was saved in the 2025 calendar