Wednesday, October 29, 2008

Rising cost of medicines affect consumers in ACT and Australia

Two recent surveys have reported that increasing financial pressures and costs have reduced consumers’ use of prescribed medicines. The findings of these reports are a matter of concern and need to be addressed through appropriate government action.

The survey by Council on the Ageing–ACT (COTA-ACT) was of 700 older Canberra residents; the second study analysed Pharmaceutical Benefits Scheme (PBS) data from the Department of Health and Ageing to determine the effect of increased consumer payments for medicines on use of the medicines.

The survey “The Seniors Lifestyle and Finance Survey” (1) available on has produced some worrying findings, including health issues. HCCA wishes to thank COTA-ACT for permission to quote from their report.

While the background to the survey was to collect data on lifestyle and financial issues that had been raised anecdotally, there was also a need to clarify whether older Canberrans face the same economic pressures as other Australians and are not all on high retirement incomes with good social support. The survey sought responses on the impact of income and cost pressures on older people in the four principle areas of accommodation, income, health and social and recreational aspects of life.

In general the survey supported the view that older Canberrans were being forced to compromise on critical lifestyle issues because of severe financial constraints.

In the health area rising costs had resulted in 15% ceasing private health insurance with 31% of respondents not having private health insurance. 56% do not have access to bulk billing through their general practitioner. As a consequence of increasing costs 13% have stopped or reduced their medical treatment, with 7% reducing or giving up their medication. Increased food costs have also resulted in 33% of respondents buying less or cheaper food and changing their diets. This included reduced purchases of fruit and vegetables. The medium to long term effect of many of these changes have the potential to be serious.

As well as the direct health issues an important finding with health implications was that older Canberrans had significantly reduced their social and recreational activity, which includes volunteering.

The second survey (2) looked specifically at the impact of the cost to consumers of medicines under the government subsidised PBS. The survey was conducted by researchers from the Universities of WA, SA, Adelaide and Curtin. This survey, using government data on prescribed dispensing of 17 selected categories of medicine, looked at the changes in amount of the medicines dispensed after the consumer contribution (co-payment) was increased in January 2005. The study compared data from 2000 to 2004 with that from 2005 to 2007. Co-payments were increased by 24%, together with increased safety net thresholds in January 2005; there were also subsequent increases in the safety net thresholds in January 2006 and 2007.

The selected categories of medicines included hypnotics, beta-blockers, insulin, anti-Parkinson’s treatments, statins (cholesterol lowering), muscle relaxants, osteoporosis treatments, thyroxine, combination asthma medicines, glaucoma treatments and acid-related upper gastrointestinal disorder treatments.

The findings of the study indicated that the increased cost of medicine to consumers resulted in reduced use by consumers of medicines. The study showed that the amount dispensed of 12 of the 17 medicines decreased after the cost increased. The largest decrease observed was for medicines taken for asymptomatic conditions or for which there were over-the-counter substitutes. The cost of medicines appears to have particularly reduced the medicine use by social security beneficiaries. The findings noted that the increased costs to consumers reduced the volume dispensed of both discretionary and essential medicines. While the increased co-payments may achieve the policy objective of reducing the cost of the PBS this study suggests that there may be longer term health affects for consumers, especially the most socially disadvantaged.


1 COTA-ACT; Finance and Lifestyle Survey, 09-2008
2 Hynd, Anna; et al The impact of co-payment increases on dispensings of government subsidised medicines in Australia: Pharmacoepidemiology and Drug Safety (2008)

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