Health system sustainability: the Pharmaceutical Benefits Scheme in Australia

The Australian Federal Government’s National Medicines Policy aims to create positive health outcomes for all Australians by providing appropriate access to medicines. Underpinning the policy is the Pharmaceutical Benefits Scheme (PBS), which subsidises the cost of medicines. However, like many healthcare systems around the world, governments are struggling with the challenge of how to manage escalating healthcare expenditure. The landscape is dotted with competing agendas: increased demand for healthcare due to population growth and ageing; patient preferences over treatment options; improved technologies and medicines; the need for pharmaceutical companies to recoup research and manufacturing costs—all have been seen as culprits behind a rising national healthcare bill. Further, spending a dollar on one form of healthcare means not spending a dollar on another. In other words, providing healthcare has an opportunity cost. Increasingly, decision-makers are using economic evaluations as a tool to balance these agenda trade-offs. Only through balance can we ensure that healthcare continues to provide value for money and the system remains sustainable. This chapter explains how the PBS works—its decision-making bodies and processes, how economic evaluation is key to recommending which new medicines are listed on the PBS, and the industry’s perspective on the PBS. The case study focuses on the human papillomavirus (HPV) vaccine to highlight the competing resource demands, business interests, and societal needs that influenced its listing on the PBS. The case study also considers how making the vaccine available through the National Immunisation Programme has contributed to making Australia’s healthcare system more sustainable.