Extrapolations could be conservative
The Pharmacy Guild of Australia has extrapolated that the government will save nearly $14b due to Pharmaceutical Benefits Scheme (PBS) reforms over the period of the Sixth Community Pharmacy Agreement (6CPA).
Writing in forefront, executive director David Quilty said the extrapolations were based on the May Federal Budget.
A Guild spokesperson said the extrapolations used government forward estimates for spend and extrapolated for the two years not covered by these, to span the 6CPA period.
The Final Budget Outcome showed the government had spent $168m less on pharmaceutical benefits and services than estimated at the 2014-15 budget (PD 26 Sep), which Quilty said meant the Guild’s estimates of the savings might be conservative.
“During the last four years, the Federal Government’s Budget forecasts have consistently and significantly overestimated pharmaceuticals expenditures.”
Quilty said this was because the government was making greater savings from PBS reforms than it had thought, which would escalate with the start of Simplified Price Disclosure today.
“Pharmacies face the double whammy of their mark-up for dispensing PBS medicines being reduced and losing their trading terms on the purchase of these medicines.
“Both the reduced mark-up and the loss of trading terms transfer from pharmacies to the Government’s bottom line under the price disclosure regime.”
Dispensing remuneration was projected to fall every year between 2010 and 2020, making it imperative that a “fair and reasonable” proportion of the savings from PBS reforms was reinvested in pharmacies in the next CPA, Quilty said.
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