A new analysis shows that, when it comes to the structural transformation of the PBS, it was almost all over by the end of 2013.
The further analysis of recently published Portfolio Additional Estimates shows that the significant budgetary impact driven by patent expiries impacting some of the most commonly prescribed medicines was coming to an end in late 2013.
Portfolio Additional Estimates is an annual update of Government spending on programs reflecting changes since the May Budget.
The updated forecast for PBS spending in 2014-15 is $1.8 billion lower than it was three years ago, but higher than it was 12 months ago.
The total cost of new listings is now matching or exceeding new savings generated under the price disclosure policy, a point PharmaDispatch understands is being consistently made by policy-makers in discussions with the sector.
The analysis shows that the dramatic downward revisions in forecast spending on the PBS occurred in 2013, largely on the back of patent expiries and large price reductions to a small number of medicines.
Between February 2013 and February last year, the 2014-15 forecast was cut by a staggering $1.675 billion.
A previous PharmaDispatch analysis has shown that combined yearly spending on PBS-listed atorvastatin, rosuvastatin, olanzapine and clopidogrel, almost halved in barely one year, falling by almost $500 million.
In just over a year, covering 2012 and 2013, all four were subject to a combination of patent expiry, generic competition, one-off price cuts or significant reductions under the price disclosure policy.
As revealed by PharmaDispatch yesterday, Portfolio Additional Estimates revealed a $123 million upward revision in forecast spending on the PBS in 2014-15.
It was the first upward revision in five years and compares to a $600 million downward revision in the 2013-14 forecast just 12 months ago.
Last year's significant downward revision essentially 'bridged' the structural transformation in the PBS, between the previous forecasts that did not capture the savings and the more recent forecasts in which the Government has banked the billions in savings now budgeted.
As one industry source told PharmaDispatch yesterday, "We've delivered $20 billion over a decade and it's like it never happened."
