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									                Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services



Outcome 2
ACCESS TO PHARMACEUTICAL SERVICES

 Access to cost-effective medicines, including through the Pharmaceutical Benefits
 Scheme and related subsidies, and assistance for medication management through
                               industry partnerships




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Outcome Strategy
The Australian Government, through Outcome 2, aims to provide reliable, timely
and affordable access to cost-effective, sustainable and high quality pharmaceutical
services and medicines. The Government is committed to achieving this outcome
by subsidising the cost of medicines through the Pharmaceutical Benefits Scheme
(PBS), providing free access to expensive and ‘life saving’ drugs, and the provision
of aids and appliances. The Government provides advice to health professionals
and consumers on the quality use of medicines, and works with the
pharmaceutical industry to ensure the supply of medicines under the PBS.
The Government continues to collaborate with community pharmacy and peak
bodies, such as the Pharmacy Guild of Australia, the Pharmaceutical Society of
Australia, and others through the Programs Reference Group to implement the
Fifth Community Pharmacy Agreement (the Fifth Agreement) over five years to
30 June 2015. Around 5,000 pharmacies continue to be remunerated for dispensing
PBS medicines and providing pharmacy programs and services. The Community
Service Obligation arrangements with pharmaceutical wholesalers will also
continue to be funded through the Fifth Agreement. The location rules for Section
90 approved community pharmacies are maintained under the Agreement but will
be streamlined.
The Government will continue to collaborate with industry and consumer groups
on the ongoing implementation and monitoring of the further pricing reforms and
other initiatives agreed to under the Memorandum of Understanding (MoU) with
industry, such as the Managed Entry Scheme and Parallel Processing. Key
stakeholder groups include Medicines Australia, the Generics Medicines Industry
Association and the Consumers Health Forum.
Together, both the Fifth Agreement and the MoU are delivering savings of over
$2.5 billion over five years to support the ongoing sustainability of the PBS.
The National Medicines Policy provides an overarching framework for the
activities in Outcome 2. The policy seeks to produce better health outcomes
through improved access to, and quality use of medicines. There are four central
objectives of the policy: timely access to medicines at an affordable cost to
individuals and the community; medicines should meet quality, safety and efficacy
standards; quality use of medicines; and maintaining a responsible and viable
medicines industry.
In order to ensure the quality use of medicines, it is essential that consumers have
information about the medicine they are taking. The Australian Government,
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Budget Statements – Department of Health and Ageing



through a number of initiatives, provides Australians with facts they need to make
informed decisions about the medicines they take and ensure their safe and
effective use.
In 2011-12, the Government will establish a systematic data collection of post-
market medicine use and enhance the National Medicines Policy framework to
provide evidenced-based advice for decision and action on medicines post-PBS
listing. This post-market data will improve cost-effectiveness reviews and
education and feedback to consumers, medical practitioners, pharmacists and
governing bodies of areas where medicine use may be less than optimal.
Outcome 2 is the responsibility of Pharmaceutical Benefits Division.

Programs Contributing to Outcome 2
Program 2.1: Community pharmacy and pharmaceutical awareness

Program 2.2: Pharmaceuticals and pharmaceutical services

Program 2.3: Targeted assistance – pharmaceuticals

Program 2.4: Targeted assistance – aids and appliances




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                 Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services




Outcome 2 Budgeted Expenses and Resources
Table 2.1 provides an overview of the total expenses for Outcome 2 by Program.
Table 2.1: Budgeted Expenses and Resources for Outcome 2
                                                                2010-11     2011-12
                                                             Estim ated Estim ated
                                                                 actual1 expenses 1




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                                                                   $'000      $'000




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Program 2.1: Com m unity pharm acy and pharm aceutical aw areness
  Administered expenses
    Ordinary annual services (Appropriation Bill No. 1)         244,226     311,173
  Departmental expenses
    Departmental appropriation2                                    11,803      10,685
    Expenses not requiring appropriation in the budget year 3         371         636
    Total for Program 2.1                                         256,400     322,494
Program 2.2: Pharm aceuticals and pharm aceutical services
  Administered expenses
    Ordinary annual services (Appropriation Bill No. 1)           182,816     186,235
    Special appropriations
      National Health Act 1953 - pharmaceutical benefits        9,041,971    9,646,858
  Departmental expenses
    Departmental appropriation2                                    35,568      32,200
    Expenses not requiring appropriation in the budget year 3       1,119       1,917
  Total for Program 2.2                                         9,261,474    9,867,210
Program 2.3: Targeted assistance - pharm aceuticals
  Administered expenses
    Ordinary annual services (Appropriation Bill No. 1)           137,648     159,428
  Departmental expenses
    Departmental appropriation2                                     1,769        1,602
    Expenses not requiring appropriation in the budget year 3          56           95
  Total for Program 2.3                                           139,473     161,125
Program 2.4: Targeted assistance - aids and appliances
  Administered expenses
    Ordinary annual services (Appropriation Bill No. 1)               621         802
    Special appropriations
      National Health Act 1953 - aids and appliances              246,113     266,319
  Departmental expenses
    Departmental appropriation2                                     1,868        1,691
    Expenses not requiring appropriation in the budget year 3          59          101
  Total for Program 2.4                                           248,661     268,913




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Table 2.1: Budgeted Expenses and Resources for Outcome 2 (Cont.)
                                                                                               2010-11     2011-12
                                                                                            Estim ated Estim ated
                                                                                                actual1 expenses 1
                                                                                                  $'000      $'000
    Outcom e 2 totals by appropriation type
      Administered expenses
        Ordinary annual services (Appropriation Bill No. 1)                                    565,311           657,638
        Special appropriations                                                               9,288,084         9,913,177
      Departmental expenses
        Departmental appropriation2                                                              51,008            46,178
        Expenses not requiring appropriation in the budget year 3                                 1,605             2,749
      Total expenses for Outcom e 2                                                          9,906,008        10,619,742

                                                                                                2010-11          2011-12
    Average staffing level (num ber)                                                                261              249
1      The 2010-11 estimated actual and the 2011-12 estimated expenses are based on the new program structure to be
       implemented 1 July 2011 by the department as part of the Health and Ageing Portfolio - administrative efficiencies
       measure.
2      Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No 1)’ and ‘Revenue from
       independent sources (s31)’.
3      ‘Expenses not requiring appropriation in the Budget year’ is made up of depreciation expense, amortisation
       expense, make good expense and audit fees.




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                Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services



Program 2.1: Community pharmacy and pharmaceutical
awareness

Program Objectives
Through Program 2.1, the Australian Government aims to:
   support timely access to medicines and professional pharmacy services
    through the implementation of the Fifth Community Pharmacy Agreement.




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Major Activities
Fifth Community Pharmacy Agreement
The Australian Government will work to ensure all eligible Australians continue
to have timely access to PBS medicines and other professional services through
the Fifth Community Pharmacy Agreement (the Fifth Agreement). The Fifth
Agreement provides funding over five years, from 2010-11 to 2014-15, to
remunerate pharmacists for dispensing PBS medicines and provides pharmacists
with a range of professional programs and services, including services to support
medication management, programs to assist the pharmacy workforce, activities to
support improved service quality, and ongoing research and development work.
In addition to six new programs that will be introduced as part of the Fifth
Agreement, nine existing programs will continue, many with enhancements such
as improved accountability and greater focus on patient outcomes. These
enhancements are based on reviews conducted as part of the Fourth Community
Pharmacy Agreement.
In support of these programs, the Programs Reference Group, established in
2010-11, will continue to provide advice to the Minister for Health and Ageing on
the design, implementation and evaluation of elements of the Fifth Agreement.
In addition, the department will continue to work with consumers, Medicare
Australia, the Pharmacy Guild of Australia, and other peak pharmacy,
accreditation and standards setting organisations to enhance services, improve
health literacy and decrease the risk of medicine-related harm.
In 2011-12, the department, in conjunction with the Pharmacy Guild of Australia,
will pilot eligibility for in-pharmacy medicines checks for consumers. To be known
as a MedsCheck and Diabetes MedsCheck, these new services will be targeted at
people on a complex regimen of medications or who have type 2 diabetes, and will
provide users with information about their medical conditions and medicines, and
instruction on how to use their medicines safely and effectively. These services will
be rolled out nationally from 1 July 2012.
In 2011-12, the Rural Pharmacy Workforce program will continue to provide
education, training and other initiatives which provide access to pharmacists in
rural and remote areas, such as locum schemes. The program will continue to
financially support pharmacies in rural and remote areas to assist rural
communities maintain access to PBS medicines by recognising the additional costs
and difficulties associated with operating services in these areas.

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The Australian Government is committed to improving the health outcomes for
Aboriginal and Torres Strait Islander peoples through improving the quality use of
medicines and medication compliance, and by improving access to PBS medicines
by addressing cultural, transport and financial barriers to access. Under the
Quality Use of Medicines for Aboriginal and Torres Strait Islander peoples
(QUMAX) program, participating Aboriginal Community Controlled Health
Services (ACCHS) may access funding for Dose Administration Aids, Home
Medication Review models of support, pharmacist support, devices such as
asthma spacers and blood glucose monitors, education and cultural awareness
support, and transport.
The department will work closely with the Pharmacy Guild of Australia and the
National Aboriginal Community Controlled Health Organisation to ensure these
activities continue to meet the needs of the clients at participating ACCHS during
2011-12.
From 1 July 2011, the Pharmacy Practice Incentives Program will provide incentive
payments to all eligible community pharmacies that meet new accreditation
requirements that include displaying and complying with a patient service charter
that outlines the quality of services a consumer can expect from their pharmacy.
The program also offers pharmacies a range of incentives to deliver services that
improve a person’s ability to manage their medication regimen, and through this,
improve their health. The department will work with key stakeholders to provide
ongoing education and training and support for pharmacies in implementing these
new services, including clinical interventions to identify, manage and document
medicine-related problems, and staged supply medicines where PBS medicines are
delivered in instalments when requested by the prescriber.
In 2011-12, the department will streamline the Pharmacy Location Rules to make it
easier for pharmacists to apply for a new, or relocate an existing pharmacy,
approved to supply PBS medicines in areas of community need. The Pharmacy
Location Rules will continue to facilitate a sustainable network of community
pharmacies to ensure all Australians have access to PBS medicines. The rules
include criteria to support the geographical spread of approved pharmacies in
areas of community need and also encourage the establishment of new pharmacies
in rural areas.
From 1 April 2012, under arrangements formalised as part of the Fifth Agreement,
pharmacists will provide the Australian Government with data on PBS
prescriptions that are priced below the general co-payment. Collecting this data
will provide access to a wider range of data for enhanced PBS research, policy
development and program implementation activities.




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                        Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services



Program 2.1 Expenses
Table 2.2: Program Expenses
                                               2010-11         2011-12        2012-13        2013-14        2014-15
                                            Estim ated         Budget        Forw ard       Forw ard       Forw ard
                                                actual                         year 1         year 2         year 3
                                                 $'000             $'000        $'000          $'000          $'000
    Annual administered expenses
      Ordinary annual services                  244,226        311,173        314,971         347,070        366,542




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    Program support                               12,174         11,321         10,988         10,748         10,182
    Total Program 2.1 expenses                  256,400        322,494        325,959         357,818        376,724


Program 2.1: Deliverables1
The department will produce the following ‘deliverables’ to achieve the objectives
of Program 2.1.
Table 2.3: Qualitative Deliverables for Program 2.1



             Qualitative Deliverables                              2011-12 Reference Point or Target


Produce relevant and timely evidence-based                    Relevant evidence-based policy research
policy research                                               produced in a timely manner
Stakeholders participate in program and/or                    Stakeholders participate in program and/or
policy development                                            policy development through avenues such
                                                              as regular consultative committees,
                                                              conferences, stakeholder engagement
                                                              forums, surveys, submissions on
                                                              departmental discussion papers and
                                                              meetings

Fifth Community Pharmacy Agreement

Implement new accreditation requirements                      New accreditation requirements in place
for community pharmacies that support                         from July 2011
quality services, quality infrastructure and
increased inter-professional communication
Provide funding to community pharmacies                       Community pharmacies in rural and remote
in rural and remote areas to support the                      areas are provided with funding options to
delivery professional services                                support the delivery of professional services
Implement revisions to professional                           Revisions to improve professional programs
programs and services under the Fifth                         and services under the Fifth Community
Community Pharmacy Agreement                                  Pharmacy Agreement are implemented
Agreement based on reviews of these                           within agreed timeframes
programs under the Fourth Agreement
Completion of the Medscheck and Diabetes                      Pilot undertaken and evaluated to inform
MedsCheck pilot                                               national rollout from 1 July 2012


1     As a result of the Strategic Review, deliverables may have changed from the 2010-11 Portfolio Budget Statements.
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Budget Statements – Department of Health and Ageing




           Qualitative Deliverables                              2011-12 Reference Point or Target


Streamline the Pharmacy Location Rules                     Amendments to the rules implemented by
                                                           December 2011

Table 2.4: Quantitative Deliverables for Program 2.1

                                   2010-11                           2012-13           2013-14          2014-15
      Quantitative                                   2011-12
                                   Revised                           Forward           Forward          Forward
      Deliverables                                   Budget
                                   Budget                             Year 1            Year 2           Year 3

Percentage of variance
between actual and                   ≤0.5%            ≤0.5%            ≤0.5%            ≤0.5%             ≤0.5%
budgeted expenses

Fifth Community Pharmacy Agreement

Number of medication
management services
                                     60,000           61,500           63,000           64,500           66,000
provided under the Fifth
Agreement


Program 2.1: Key Performance Indicators2
The following ‘key performance indicators’ measure the effectiveness of
Program 2.1 in meeting its objectives thereby contributing to the outcome.
Table 2.5: Quantitative Key Performance Indicators for Program 2.1

                                   2010-11           2011-12         2012-13           2013-14          2014-15
       Quantitative
                                   Revised           Budget          Forward           Forward          Forward
        Indicators
                                   Budget             Target          Year 1            Year 2           Year 3

Fifth Community Pharmacy Agreement

Percentage of rural
community pharmacies
accessing targeted
programs to ensure
                                      60%              65%              70%               75%              75%
accessibility of
community pharmacy in
rural and remote
Australia




2   As a result of the Strategic Review, key performance indicators may have changed from the 2010-11 Portfolio
    Budget Statements.
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                     Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services




                                  2010-11         2011-12            2012-13   2013-14   2014-15
      Quantitative
                                  Revised         Budget             Forward   Forward   Forward
       Indicators
                                  Budget           Target             Year 1    Year 2    Year 3

Percentage of
community pharmacies
participating in the                N/A              40%              45%       50%       55%
Pharmacy Practice




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Incentives Program3




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Program 2.2: Pharmaceuticals and pharmaceutical services

Program Objectives
Through Program 2.2, the Australian Government aims to:
    list cost-effective, innovative, clinically effective medicines on the PBS; and
    improve health outcomes and the sustainability of the PBS by improving the
     evidence base for prescribing decisions and assessing the effectiveness of listed
     PBS medicines.

Major Activities
New medicine listings
The Australian Government subsidises the cost of prescription medicines through
the PBS for all eligible general or concessional patients. Patients contribute to the
cost of their PBS prescription medicines through a co-payment. The co-payment
rate in 2011 is $5.60 for a concessional patient and up to $34.20 for a general
patient, with the Government paying the remaining cost of the medicine. The PBS
safety net is designed to assist families and individuals who require a large
number of medicines in a calendar year. In 2011, the PBS safety net threshold for
general patients is $1,317.20, while the concessional patient threshold is $336.00.
After reaching the threshold, general patients usually pay for PBS prescriptions at
the concessional co-payment rate of $5.60, and concessional patients are usually
supplied with PBS prescriptions without charge for the remainder of the calendar
year.
The listing of medicines on the PBS is based on the advice of the Pharmaceutical
Benefits Advisory Committee (PBAC). The PBAC assesses the therapeutic benefits
and cost-effectiveness of medicines, including comparisons with other treatments.
The PBAC is an independent advisory body of medical specialists, general
practitioners and other health professionals, and also includes consumer
representation. The PBAC meets three times a year in March, July and November,
and the agenda is published on the department’s website 4 six weeks prior to each
meeting.



3   The Pharmacy Practice Incentives Program commences in 2011-12.
4   Available at: <www.health.gov.au>.
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In 2011-12, the PBAC will continue to consider and recommend medicines for
listing on the PBS. New listings on the PBS must be both clinically and cost-
effective. A medicine cannot be included on the PBS unless the PBAC recommends
to the Australian Government that it be listed. Therefore, a positive PBAC
recommendation is a very important step in the listing process. In 2010-11, the
PBAC considered 189 submissions, of which 63 were major submissions 5 requiring
cost-effectiveness analysis. A similar number of submissions are expected to be
considered in 2011-12.
In November 2010 following broad consultation and clinical input from key
stakeholders, nurse practitioners and midwives were given access to prescribe
certain medicines on the PBS deemed appropriate by the PBAC. In 2011-12, the
PBAC will continue to consider whether authorised nurse practitioners and
midwives should prescribe a medicine each time a new listing, or change to an
existing listing, is recommended by the Committee
New listings
Since 1 November 2010, there have been over 101 new listings or alterations to
current listings of medicines, at a cost of $376.4 million over five years.
Following a Government announcement on 9 December 2010, four high cost drugs
were listed on the PBS on 1 February 2011. Dutasteride was listed for the treatment
of benign prostrate enlargement, at a total cost of $77.1 million over five years. It is
expected to assist over 84,000 people in the first full financial year. Azacitidine was
listed to help extend the lives of people suffering from bone marrow disorders, at a
total cost of $124.2 million over five years. It is expected to assist over 670 people
each year.
An extension to the listing of nicotine transdermal patches to cover all Australians
and an extension to the listing of varenicline also commenced on 1 February 2011
and will cost $103.4 million over five years. These listing are expected to assist over
80,000 people a year to quit smoking.
On 25 February 2011, the Government announced the listing of six new medicines
and vaccines on the PBS at a total cost of $127.1 million over five years. The first of
these listings to come into effect was romiplostim which was listed on the PBS on
1 April 2011 and levodopa with carbidopa which was listed on 1 May 2011.
Romiplostim is used for the treatment of idiopathic thrombocytopenic purpura, a
rare blood disorder where the blood does not clot as it should due to a low number
of blood cell fragments called platelets. Complications from the disease are serious
and can include splenectomy, or even death. The listing of this medicine is
expected to benefit around 300 people a year at an estimated cost of $73.0 million
over five years. Levodopa with carbidopa intestinal gel was listed on the PBS as a
specialised last line drug therapy for patients with advanced Parkinson disease. At
an estimated cost of $49.2 million over five years, this listing is expected to benefit
around 190 people a year.


5   Major submissions are those for new medicines or new medical indications for existing medicines that are
    required to present comprehensive clinical and economic data which require evaluation before they are
    considered by the PBAC.
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In announcing the listing of these new medicines, the Government also announced
that given the current fiscal environment, the listing of some medicines would be
deferred until fiscal circumstances permit. Deferred listings will be automatically
reconsidered by Government when appropriate to do so, and do not need to be
reconsidered by the PBAC or the Pharmaceutical Benefits Pricing Authority
(PBPA), unless a sponsor seeks a price cut or presents further clinical evidence to
support a new price. Given the need for fiscal discipline to achieve the
Government’s intention to return the Budget to surplus in 2012-13, all changes to




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the PBS with financial implications will be considered by the Cabinet.




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The Australian Government’s funding arrangement for the provision of
chemotherapy medicines announced in the 2008-09 Budget was deferred from
1 September 2009, to allow consideration of the measure in the context of the
negotiations with the Pharmacy Guild of Australia for the Fifth Agreement. The
measure has been revised in line with a proposal received from community
pharmacy and other stakeholders. The measure, which is due to commence on
1 December 2011, will eliminate wastage caused by excess dispensing of whole
vials, and requires individual patient doses to be dispensed in combinations of vial
sizes that will produce the least cost to the taxpayer. The measure includes new
fees for pharmacists which recognise the specialist activities undertaken to prepare
cancer chemotherapy infusions.
Increase sustainability of the Pharmaceutical Benefits Scheme
The Australian Government is committed to ensuring Australians continue to have
ongoing access to existing, new and innovative medicines, now and into the future
through the PBS. However, the cost of the program is significant.
The Australian Government has added around 500 new medicines or brands of
medicines to the PBS, Life Savings Drugs Program and National Immunisation
Program over the last four years, at a cost of around $4 billion.
In 2008-09, PBS growth was 9.2 per cent, and in 2009-10 PBS growth was
9.0 per cent. For 2010-11 and 2011-12, PBS growth is estimated to be 7.7 per cent
and 6.5 per cent respectively. This growth takes into account the impact of PBS
reform measures implemented in 2007 and 2010. PBS growth is influenced by a
number of factors, including the prices of existing PBS medicines and changes in
price over time. Factors also include the number and cost of new medicines added
to the PBS, population growth, the level of coverage by concession cards, the
number of prescriptions dispensed and the amount that patients contribute
towards the cost of prescriptions.
In 2010, the Government signed a four year Memorandum of Understanding
(MoU) with Medicines Australia, the peak body for the innovative medicines
industry in Australia, to improve the sustainability of the PBS. Along with the Fifth
Community Pharmacy Agreement, this MoU will provide the Government with
net total savings of $2.5 billion from 2010-11 to 2014-15.
While the first round of savings (statutory price reductions), were implemented in
2010-11, the major savings component of the MoU, accelerated and expanded price
disclosure, will be introduced from 1 April 2012. The prices paid by pharmacists to
suppliers for medicines are often less than those paid by the PBS to pharmacists.
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Price disclosure requires suppliers of medicines to advise the prices they charge to
pharmacies. Prices paid under the PBS are being revised to reflect weighted
average prices actually being charged in the market. Medicines Australia has
agreed, through the MoU, to an arrangement whereby a minimum level of
23 per cent savings under price disclosure is assured. No prices will rise for
consumers as a result of this policy. In fact, in some cases it will result in lower
prices for some consumers, as some medicines fall under the co-payment level.
Increased efficiency of the medicine assessment process
In 2011-12, the Australian Government will continue to work with Medicines
Australia through the Access to Medicines Working Group to advise the Minister
for Health and Ageing on how medicines can be supplied more effectively through
the PBS. The group provides strategic oversight of joint activities undertaken by
the department and Medicines Australia to enhance the PBS processes.
On 1 January 2011, the department introduced Parallel Processing and the
Managed Entry Scheme to increase the efficiency of the medicines assessment
process. The implementation of parallel assessment processes will allow sponsors
to seek the PBAC and the Therapeutic Goods Administration (TGA) assessment of
possible PBS listings concurrently instead of sequentially, resulting in streamlined
regulatory and reimbursements approvals. The same rigour and analysis will be
applied by both bodies in the assessment of these drugs but efficiencies will be
gained through earlier engagement with the PBAC processes. At its July 2011
meeting, the PBAC will consider the first submissions lodged under the new
Parallel Processing arrangements.
The Managed Entry Scheme was introduced by the department for drugs with a
high clinical need but where a PBS listing price is yet to be established. Through
the scheme, the PBAC may recommend PBS coverage of a drug at a price justified
by existing evidence, pending submission of more conclusive evidence of
cost-effectiveness which may justify a higher future price. This will allow some
medicines to be listed on the PBS earlier.
During 2011, the department will hold information sessions about both Parallel
Processing and the Managed Entry Scheme. In addition, the Access to Medicines
Working Group will monitor the take-up and use of both of these new policies to
assess their effectiveness.
National Medicines Policy
The National Medicines Policy advisory structure plays a key role in improving
the structure of the PBS and its listing processes. The advisory structure
(Executive, Committee and Partnerships Forum) engages individual experts,
related organisations and committees, Government representatives and
stakeholders to develop National Medicines Policy. Timely and responsive advice
is provided to the Government on medicines policy issues. In 2011-12, the five key
priorities are: integrating the medicines policy framework into health system
reform; better informed and active consumers; translating evidence into practice
and policy; monitoring medicines in use; and informing the research agenda.
Sustainability and cost-effectiveness will be a theme across these priority areas. The

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                  Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services



Executive and Committee meet at least three times a year and the Partnerships
Forum is an annual event.
In 2011-12, the Government will expand the scope of the National Medicines Policy
advisory structure to capture and review currently unavailable clinical practice
data and rigorously assess medicines use post-listing on the PBS. This will improve
health outcomes and patient safety, through the better targeting of education and
support for health professionals and consumers. Improvements to the quality use
of medicines, as a result of better informed decision making by both prescribers




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and consumers, will also help to ensure the on-going cost-effective use of
medicines on the PBS, supporting its fiscal sustainability.

Program 2.2 is linked as follows:
   Department of Human Services (Medicare Australia) to administer the PBS,
    including payment of script benefits, authority approvals, new and other PBS
    items under the Delivery of Pharmaceutical Benefits and Services.

Program 2.2 Expenses
Table 2.6: Program Expenses
                                    2010-11     2011-12    2012-13    2013-14    2014-15
                                 Estim ated     Budget    Forw ard   Forw ard   Forw ard
                                     actual                 year 1     year 2     year 3
                                      $'000       $'000      $'000      $'000      $'000
Annual administered expenses
  Ordinary annual services          182,816     186,235    189,958    193,755    197,628
  Special appropriations
    National Health Act 1953 -    9,041,971   9,646,858 10,107,915 10,895,071 11,685,838
    pharmaceutical benefits
Program support                      36,687      34,117     33,114     32,388     30,687
Total Program 2.2 expenses        9,261,474   9,867,210 10,330,987 11,121,214 11,914,153




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Program 2.2: Deliverables6
The department will produce the following ‘deliverables’ to achieve the objectives
of Program 2.2.
Table 2.7: Qualitative Deliverables for Program 2.2



           Qualitative Deliverables                              2011-12 Reference Point or Target



New medicine listings

The PBAC meets at least three times a year                  The PBAC recommendations for listing on
and provides recommendations to the                         the PBS are based on the clinical
Minister on new listings for the PBS                        effectiveness and the cost-effectiveness of
                                                            new medicines, and provided in a timely
                                                            manner
Price negotiations with sponsors and                        All negotiations and listing activity
conditions for listing finalised, and quality               completed in a timely manner
and availability checks undertaken for new
PBS listings

Increase sustainability of the Pharmaceutical Benefits Scheme

Implement and monitor progress under the                    The Access to Medicines Working Group
MoU between the Australian Government                       will monitor progress on the
and Medicines Australia, including the                      implementation of the MoU, and report as
implementation of price disclosure, the                     required to the Minister and Parliament on
Managed Entry Scheme and Parallel                           this progress
Processing
Implement changes to the National                           Implementation completed in a timely
Medicines Policy Framework, establishing a                  manner, to allow systematic review in
structure to systematically and rigorously                  specified timeframes
assess medicines use post-listing on the PBS
Provide Government with advice on                           The National Medicines Policy advisory
medicines policy issues                                     structure reports to Government with timely
                                                            and responsive advice on medicines policy
                                                            issues as appropriate




6   As a result of the Strategic Review, deliverables may have changed from the 2010-11 Portfolio Budget Statements.
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Table 2.8: Quantitative Deliverables for Program 2.2

                            2010-11                    2012-13    2013-14     2014-15
      Quantitative                       2011-12
                            Revised                    Forward    Forward     Forward
      Deliverables                       Budget
                            Budget                      Year 1     Year 2      Year 3

Percentage of variance
between actual and            ≤0.5%       ≤0.5%         ≤0.5%      ≤0.5%        ≤0.5%




                                                                                           Outco
                                                                                           me |
budgeted expenses




                                                                                                   02
New medicine listings

Percentage of
submissions to the
Pharmaceutical Benefits
Advisory Committee for        100%        100%          100%        100%        100%
PBS listings that are
considered within
17 weeks of lodgement

Increase sustainability of the Pharmaceutical Benefits Scheme

Percentage of
notifications to affected
sponsors of outcomes          100%        100%          100%        100%        100%
from price disclosure
calculations
Percentage of Public
Summary Documents,
including
recommendations,
                              100%        100%          100%        100%        100%
released 16 weeks after
each Pharmaceutical
Benefits Advisory
Committee meeting
Percentage of
applications for
consideration at next
Pharmaceutical Benefits
Advisory Committee            100%        100%          100%        100%        100%
meeting published on
the department’s
website to allow for
public comment




                                           125
Budget Statements – Department of Health and Ageing



Program 2.2: Key Performance Indicators7
The following ‘key performance indicators’ measure the effectiveness of
Program 2.2 in meeting its objectives thereby contributing to the outcome.
Table 2.9: Qualitative Key Performance Indicators for Program 2.2



              Qualitative Indicator                              2011-12 Reference Point or Target



Increase sustainability of the Pharmaceutical Benefits Scheme

Generate savings through price reduction                    Achieve the guaranteed average savings of a
across non exempt F2 drugs in the First                     23 per cent price reduction across non
Main Cycle of Expanded and Accelerated                      exempt F2 drugs as stipulated in the
Price Disclosure                                            Memorandum of Understanding with
                                                            Medicines Australia
Quality of comments on submissions being                    Increase in the quality of consumer input
considered by the PBAC                                      during 2011-12
All data received and calculations                          Implementation of price reductions, based
undertaken by the agreed timelines and                      on data supplied by drug sponsors
where applicable, result in lower prices for
drugs affected by the price disclosure policy

Table 2.10: Quantitative Key Performance Indicators for Program 2.2

                                  2010-11           2011-12          2012-13           2013-14          2014-15
     Quantitative
                                  Revised           Budget           Forward           Forward          Forward
      Indicators
                                  Budget             Target           Year 1            Year 2           Year 3

New medicine listings

All medicines
recommended for
listing by the PBAC                 100%              100%             100%              100%              100%
are both cost-effective
and clinically effective

Increase sustainability of the Pharmaceutical Benefits Scheme

Estimated savings to
Government from the
                                   $9.0m            $38.0m            $62.0m           $121.0m           $296.0m
price disclosure
program per annum8




7   As a result of the Strategic Review, key performance indicators may have changed from the 2010-11 Portfolio
    Budget Statements.
8   PricewaterhouseCoopers, 2010. The Impacts of Pharmaceutical Benefits Scheme Reform, Report for the Department of
    Health and Ageing, page 91, Appendix A Table 3; Savings to Government by year.
                                                        126
                    Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services




                            2010-11      2011-12     2012-13      2013-14      2014-15
     Quantitative
                            Revised      Budget      Forward      Forward      Forward
      Indicators
                            Budget        Target      Year 1       Year 2       Year 3

Percentage of
prescriptions listed on
the Schedule of
                              80%          80%          80%          80%         80%
Pharmaceutical Benefits




                                                                                            Outco
subsidised under the




                                                                                            me |
                                                                                                    02
PBS
Number of
prescriptions
                             201m         211m         221m         232m         243m
subsidised through the
PBS
Revenue received from
the cost recovery of the     $14.0m      $14.1m       $14.1m       $14.1m       $14.1m
PBS listing process


Program 2.3: Targeted assistance – pharmaceuticals

Program Objective
Through Program 2.3, the Australian Government aims to:
   improve access to new and existing medicines for patients with life threatening
    conditions.

Major Activities
Access to life saving medicines
The Australian Government will continue to provide free access to expensive and
life saving medicines for eligible Australians through the Life Saving Drugs
Program. The program provides patients with financial assistance to access
expensive and ‘life saving’ drugs for serious and very rare medical conditions.
Nine drugs are currently funded through the program to treat seven serious and
very rare medical conditions. These conditions are: Fabry, Gaucher,
Mucopolysaccharidosis Types I, II and VI, Infantile Pompe and Paroxysmal
Nocturnal Haemoglubinuria (PNH). Each condition has separate eligibility
guidelines, developed and administered with the advice of an expert advisory
committee. Guidelines are reviewed regularly in consultation with the expert
disease advisory committees and any amendments are submitted to the PBAC for
consideration. Currently, 207 patients are being assisted through the program.
In 2010-11, the Government agreed to fund Soliris ® (eculizumab) to treat PNH
through the Life Saving Drugs Program from 1 January 2011, following a positive
recommendation from the PBAC in August 2010.
In 2011-12, the department will continue to facilitate and monitor access for new
and continuing patients to these medicines. The department will also continue to

                                            127
Budget Statements – Department of Health and Ageing



provide support to the expert disease advisory committees that provide clinical
review and assessment of patient applications.

Program 2.3 Expenses
Table 2.11: Program Expenses
                                               2010-11          2011-12        2012-13        2013-14        2014-15
                                            Estim ated          Budget        Forw ard       Forw ard       Forw ard
                                                actual                          year 1         year 2         year 3
                                                 $'000             $'000         $'000          $'000          $'000
    Annual administered expenses
      Ordinary annual services                   137,648        159,428        159,654         165,484        171,561
    Program support                                 1,825          1,697          1,647           1,611          1,527
    Total Program 2.3 expenses                   139,473        161,125        161,301         167,095        173,088


Program 2.3: Deliverables
The department will produce the following ‘deliverables’ to achieve the objectives
of Program 2.3.
                                                                        9
Table 2.12: Qualitative Deliverables for Program 2.3



             Qualitative Deliverables                               2011-12 Reference Point or Target


Produce relevant and timely evidence-based                    Relevant evidence-based policy research
policy research                                               produced in a timely manner
Stakeholders participate in program and/or                    Stakeholders participate in program and/or
policy development                                            policy development through avenues such
                                                              as regular consultative committees,
                                                              conferences, stakeholder engagement
                                                              forums, surveys, submissions on
                                                              departmental discussion papers and
                                                              meetings

Access to life saving medicines

Provide funding to facilitate the treatment of                Timely allocation and expenditure of
eligible patients through the Life Saving                     funding
Drugs Program
Review program guidelines to ensure they                      Program guidelines reviewed within agreed
are up to date and relevant                                   timeframes




9     The Quantitative Deliverables ‘Number of patients assisted to receive Zavesca through the Life Saving Drugs
      program’ and ‘Number of patients assisted to receive Myozyme through the Life Saving Drugs program’ were
      removed in the Portfolio Additional Estimates Statements 2010-11, as the figures they report on are captured in
      the deliverable ‘Number of patients assisted through the Life Saving Drugs Program’.
                                                          128
                       Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services



Table 2.13: Quantitative Deliverables for Program 2.3

                                   2010-11                            2012-13           2013-14          2014-15
      Quantitative                                   2011-12
                                   Revised                            Forward           Forward          Forward
      Deliverables                                   Budget
                                   Budget                              Year 1            Year 2           Year 3

Percentage of variance
between actual and                  ≤0.5%             ≤0.5%             ≤0.5%             ≤0.5%            ≤0.5%
budgeted expenses




                                                                                                                         Outco
                                                                                                                         me |
                                                                                                                                 02
Access to life saving medicines

Number of patients
assisted through the
                                      207               231              225               279               303
Life Saving Drugs
Program 10


Program 2.3: Key Performance Indicators
The following ‘key performance indicators’ measure the effectiveness of
Program 2.3 in meeting its objectives thereby contributing to the outcome.
Table 2.14: Qualitative Key Performance Indicators for Program 2.3



               Qualitative Indicator                              2011-12 Reference Point or Target



Access to life saving medicines

Eligible patients have timely access to the                   Patient applications are processed within 30
Life Saving Drugs Program 11                                  calendar days of receipt




10   The Life Saving Drugs Program is demand driven and estimated patient numbers are updated when new drugs
     are approved.
11   The Life Saving Drugs includes eight drugs for six conditions. Patient numbers for all LSDP drugs are captured in
     the ‘Percentage of eligible patients with access to fully subsidised medicines through the Life Saving Drugs
     program’.
                                                         129
Budget Statements – Department of Health and Ageing


                                                                                              12
Table 2.15: Quantitative Key Performance Indicators for Program 2.3

                                     2010-11          2011-12          2012-13          2013-14          2014-15
        Quantitative
                                     Revised          Budget           Forward          Forward          Forward
         Indicators
                                     Budget            Target           Year 1           Year 2           Year 3

Access to life saving medicines

Percentage of eligible
patients with access to
fully subsidised
                                       100%             100%             100%              100%             100%
medicines through the
Life Saving Drugs
program


Program 2.4: Targeted assistance – aids and appliances

Program Objectives
Through Program 2.4, the Australian Government aims to:
     provide support for people with diabetes;
     continue to assist people with a stoma by providing free stoma related
      products; and
     ensure continued access to necessary and clinically appropriate dressings, and
      improve the quality of life for people with Epidermolysis Bullosa.

Major Activities
Support people with diabetes
National Diabetes Services Scheme
The Australian Government is committed to assisting people manage their
diabetes through the subsidy of products such as syringes, insulin infusion pump
consumables, and blood and urine glucose testing strips.
The department will continue to work with diabetes organisations such as the
Australian Diabetes Society, the Australian Diabetes Educators Association and
Diabetes Australia to develop and deliver a range of educational and information
services to people with diabetes to assist in the best use of products and effective
self management of diabetes. In addition, the department will implement a new
five year agreement to administer the National Diabetes Services Scheme, ensuring
continued provision of products and services to people with diabetes.
In 2011-12, the Government will expand the National Diabetes Services Scheme to
provide access to needles and syringes for people with non-insulin dependent


12   The Quantitative Key Performance Indicator ‘Percentage of patients with access to fully subsidised Zavesca
     through the Life Saving Drugs program’ and ‘Percentage of patients with access to fully subsidised Myozyme
     through the Life Saving Drugs program’ were removed in the Portfolio Additional Estimates Statements 2010-11,
     as the figures they report on are captured in the Quantitative Key Performance Indicator ‘Percentage of elegible
     patients with access to fully subsidised medicines through the Life Saving Drugs program’.
                                                         130
                        Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services



type 2 diabetes for the delivery of injectable non-insulin blood glucose lowering
medication.
Type 1 diabetes insulin pump program
The type 1 diabetes insulin pump program, administered by the Juvenile Diabetes
Research Foundation (JDRF) on behalf of the Australian Government, aims to
increase the affordability of insulin pumps and associated consumables for families
with children under eighteen with type 1 diabetes who do not have access to other




                                                                                                Outco
means of reimbursement, such as private health insurance. The Australian




                                                                                                me |
                                                                                                        02
Government, through the program, subsidises up to 80 per cent of the cost of a
clinically recommended insulin pump (capped at $6,400) for young people with
type 1 diabetes.
In 2011-12, the department will evaluate the effectiveness of the type 1 diabetes
insulin pump program and work with JDRF to ensure that it continues to provide
appropriate assistance to families of children with type 1 diabetes.
Stoma Appliance Scheme
The Australian Government aims to assist eligible people with stomas 13 by
providing them with free stoma related appliances. The department works with
stoma associations across Australia to help people better manage their condition by
providing access to stoma related appliances, such as pouches, skin protectors,
flow filters and creams.
In 2011-12, the department will continue to implement a new pricing framework
and listing process for the Stoma Appliance Scheme as recommended by a review
conducted in 2009-10. The pricing framework introduces consistent pricing across
appliances containing similar features. The listing process includes the
establishment of a new expert advisory panel to assess applications for the listing
of appliances
National Epidermolysis Bullosa Dressing Scheme
The Australian Government aims to improve the quality of life for people with
Epidermolysis Bullosa14 through the National Epidermolysis Bullosa Dressing
Scheme, which provides for subsidisation of clinically appropriate dressings and
bandages. The National Epidermolysis Bullosa Dressing Scheme is administered
by BrightSky Australia. The department works with clinical experts from across
Australia to ensure dressing treatment methods are consistent with best-practice
and patients are educated in using subsidised dressings.
In 2011-12, the department will consider a post implementation review of the
scheme conducted in 2011 and work with BrightSky Australia to ensure the
scheme continues to meet the needs of stakeholders.




13   An opening in the abdomen for evacuation of products from the bowel or bladder.
14   A genetic disease characterised by extremely fragile and blister prone skin.
                                                          131
Budget Statements – Department of Health and Ageing



Program 2.4 Expenses
Table 2.16: Program Expenses
                                     2010-11          2011-12    2012-13    2013-14    2014-15
                                  Estim ated          Budget    Forw ard   Forw ard   Forw ard
                                      actual                      year 1     year 2     year 3
                                       $'000            $'000      $'000      $'000      $'000
Annual administered expenses
  Ordinary annual services               621             802        528        522           522
  Special appropriations
    National Health Act 1953 -
    aids and appliances              246,113          266,319    287,043    308,894     332,174
Program support                         1,927           1,792      1,739      1,701         1,612
Total Program 2.4 expenses           248,661          268,913    289,310    311,117     334,308


Program 2.4: Deliverables
The department will produce the following ‘deliverables’ to achieve the objectives
of Program 2.4.
Table 2.17: Qualitative Deliverables for Program 2.4



         Qualitative Deliverables                       2011-12 Reference Point or Target


Produce relevant and timely evidence-based        Relevant evidence-based policy research
policy research                                   produced in a timely manner
Stakeholders participate in program and/or        Stakeholders participate in program and/or
policy development                                development through avenues such as
                                                  regular consultative committees,
                                                  conferences, stakeholder engagement
                                                  forums, surveys, submissions on
                                                  departmental discussion papers and
                                                  meetings

Support people with diabetes

Implement a new agreement to provide              New agreement to be executed at the
services under the National Diabetes              expiration of the current agreement
Services Scheme
Expand the National Diabetes Services             Needles and syringes to be available to
Scheme to provide access to needles and           eligible people from 1 July 2011
syringes for eligible people with non-insulin
dependent type 2 diabetes, for the delivery
of injectable non-insulin blood glucose
lowering medications




                                                132
                       Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services




            Qualitative Deliverables                             2011-12 Reference Point or Target



National Epidermolysis Bullosa Dressing Scheme

Continued supply of necessary and                           Work closely with BrightSky Australia to
clinically appropriate dressings and                        ensure efficient administration of the




                                                                                                                      Outco
educational support for eligible people with                National Epidermolysis Bullosa Dressing




                                                                                                                      me |
                                                                                                                              02
Epidermolysis Bullosa                                       Scheme

Table 2.18: Quantitative Deliverables for Program 2.4

                                    2010-11                           2012-13          2013-14          2014-15
       Quantitative                                  2011-12
                                    Revised                           Forward          Forward          Forward
       Deliverables                                  Budget
                                    Budget                             Year 1           Year 2           Year 3

Percentage of variance
between actual and                    ≤0.5%            ≤0.5%            ≤0.5%            ≤0.5%            ≤0.5%
budgeted expenses

Support people with diabetes

Number of people with
diabetes receiving
benefit from the                     990,000         1,080,000        1,180,000        1,280,000        1,400,000
National Diabetes
Services Scheme
Number of people under
18 years of age with
type 1 diabetes receiving              233              108               62               59               59
a subsidised insulin
pump

Stoma Appliance Scheme

Number of people
receiving stoma related               38,500           39,250           41,000          41,750           43,500
products

National Epidermolysis Bullosa Dressing Scheme

Number of people with
Epidermolysis Bullosa
                                        55              166              168              171              174
receiving subsidised
dressings15




15   The number of people with Epidermolysis Bullosa receiving subsidised dressings has been revised in the 2010-11
     Budget to more accurately estimate the number of eligible people. Recommendations from a review in 2011 will
     be considered to ensure that those in most need are accessing the National Epidermolysis Bullosa Dressing
     Scheme.
                                                        133
Budget Statements – Department of Health and Ageing



Program 2.4: Key Performance Indicators
The following ‘key performance indicators’ measure the effectiveness of Program
2.4 in meeting its objectives thereby contributing to the outcome.
Table 2.19: Qualitative Key Performance Indicators for Program 2.4



            Qualitative Indicator                        2011-12 Reference Point or Target



Support people with diabetes

The type 1 diabetes insulin pump program           Stakeholders satisfied with the
meets the needs of stakeholders                    administration of the scheme

Stoma Appliance Scheme

New appliances are assessed as being               New appliances to be listed are assessed as
clinically effective and cost effective by a       being clinically effective and cost effective
technical advice panel

National Epidermolysis Bullosa Dressing Scheme

The National Epidermolysis Bullosa                 Stakeholders satisfied with the
Dressing Scheme meets the needs of                 administration of the scheme
stakeholders

Table 2.20: Quantitative Key Performance Indicators for Program 2.4

                               2010-11         2011-12     2012-13      2013-14       2014-15
      Quantitative
                               Revised         Budget      Forward      Forward       Forward
       Indicators
                               Budget           Target      Year 1       Year 2        Year 3

Support people with diabetes

Percentage of eligible
people with non-insulin
dependent type 2
                                 N/A            100%         100%         100%          100%
diabetes accessing
needles and syringes
through the scheme
Percentage of eligible
applicants receiving
                                100%            100%         100%         100%          100%
subsidised insulin
pumps

Stoma Appliance Scheme

Assessment of new
product applications
completed in accordance         100%            100%         100%         100%          100%
with the new pricing
and listing process

                                                134
                  Section 2 – Department Outcomes – 2 Access to Pharmaceutical Services




                           2010-11      2011-12     2012-13     2013-14     2014-15
      Quantitative
                           Revised      Budget      Forward     Forward     Forward
       Indicators
                           Budget        Target      Year 1      Year 2      Year 3

National Epidermolysis Bullosa Dressing Scheme

Percentage of eligible
applicants receiving         100%        100%        100%         100%        100%




                                                                                          Outco
subsidised dressings




                                                                                          me |
                                                                                                  02




                                          135
Budget Statements – Department of Health and Ageing




                                        136

								
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