When a dollar makes no cents

The discretionary $1 discount on PBS patient co-payment for prescriptions is not what it seems, says the Pharmacy Guild of Australia (The Guild), calling on the government to abolish it.

Since January 2016, pharmacists have been able to discount PBS prescriptions by up to $1, a measure introduced to encourage competition between pharmacies.

The intention of the Government may well have been to make medicines cheaper for patients but the amount a patient pays over the course of a year determines when annual safety-net thresholds are reached, and that’s a key factor in the Guild’s latest submission to the Federal Government.

When the safety-net threshold is reached, PBS medicines are free for concessional patients and further subsidised for general patients. This means that accessing the $1 discount results in patients taking longer to reach their safety-net threshold.

“For Australians who are the most reliant on PBS medicines, particularly those individuals and families with multiple chronic conditions, PBS medicines are no more affordable over a 12-month period than they were before the discount was introduced,” says The Guild.

The policy creates budget savings for the Federal Government from not having to pay the higher PBS subsidies when patients reach the safety network earlier than they would when accessing the discount.

When the policy was announced, the Federal Government estimated the $1 discount would result in Federal budget savings of $373.4 million over 4.5 years however, the much lower take-up discount means these savings are not being realised with latest figures showing only 28 per cent of eligible prescriptions are discounted.

Patients under the Repatriation Schedule of Pharmaceutical Benefits (RPBS) fare even worse with only 17 per cent of eligible prescriptions discounted.

The guild says the $1 discount policy has clearly not resulted in a level of take-up that has contributed to lower medicine prices for the broader population.

The Guild also says people in rural and remote areas are likely to pay more for medicines under the optional $1 co-payment discount policy than their counterparts in metropolitan areas.  In addition, general patients in a big capital city who are more likely to be able to afford medicines receive more discounts than concessional patients with a chronic condition in a regional area.

In submitting their document Italics> More affordable medicines for all Australians<Italics the guild asks,Why should this be the case? How is this good policy?”

In seeking to resolve the current situation The Guild has lodged a pre-Budget submission with the Federal Government, pressing the case for the abolition of the $1 optional discount of the PBS co-payment, and proposing a $1 across-the-board reduction of the co-payment funded by Government.

The full Guild submission can be viewed here