Exploring the implications of a fixed budget for new medicines: a study of reimbursement of new medicines in Australia and New Zealand.

Abstract

Spending on medicines under the Pharmaceutical Benefits Scheme (PBS) represents the ninth largest expense to the Federal Government. A recent report by the Commission of Audit to the Federal Government suggested spending on the PBS is unsustainable and a capped budget, similar to New Zealand's PHARMAC model, may be required to contain costs. The objective of the present study was to compare listing outcomes between Australia and New Zealand, thereby exploring the opportunity cost of a capped budget for new medicines. Listing outcomes in Australia and New Zealand were compared through published research and an updated search of listing outcomes from publicly available information. Previous research has demonstrated that New Zealand listed less than half of the new medicines listed in Australia over a 10-year period (2000-09). Our research shows that most of the new medicines not listed in New Zealand during this period remain unlisted today. In the previous 12 months, Australia listed 17 new medicines on the PBS, whereas New Zealand listed only one new medicine that was not already listed in Australia. The discrepancy in the number of new medicines listed in New Zealand compared with Australia raises questions regarding the consequences of implementing a capped budget for new medicines. However, further research is needed to understand the relationship between listing outcomes, access to medicines and health benefits for the community.