MID-YEAR ECONOMIC AND FISCAL
OUTLOOK, 2013-14
DECEMBER 2013
Overall Adjustments to Cash Payments for the MBS and PBS
Major increases in cash payments in 2013-14 and over the four years to 2016-17 as a result
of parameter and other variations since the 2013 PEFO include:

Private Health Insurance rebate payments, which are expected to increase by
$237 million in 2013-14 ($873 million over four years), largely reflecting stronger than
expected growth in the number of people with subsidised private health cover;

Medicare Benefits Schedule payments, which are expected to be $164 million higher
in 2013-14 ($659 million over four years), primarily reflecting a higher than expected
demand for specialist, primary care, pathology and diagnostic imaging services;
Major reductions in expected cash payments in 2013-14 and over the four years to 2016-17
as a result of parameter and other variations since the 2013 PEFO, include:

payments under the Pharmaceutical Benefits Scheme, which are expected to be
$526 million lower in 2013-14 ($2.7 billion over four years), largely reflecting higher
than estimated savings resulting from existing pricing policy, lower than anticipated
ongoing growth in demand for certain macular degeneration medicines and
adjustments to reflect the 2013-14 actual outcomes;
Chemotherapy Services
The Government will provide an additional $82.2m over two years ($28.0m in 2013-14 and
54.2m in 2014-15) to increase dispensing fees for Efficient Funding of Chemotherapy Drugs,
listed on the Pharmaceutical Benefits Scheme.
The Review of Funding Arrangements for Chemotherapy Services recommended that
dispensing fees be increased by $60 per infusion from 1 January 2014 until the expiry of
the Fifth Community Pharmacy Agreement on 30 June 2015.
Further information can be found in the joint press release of 30 November 2013 issued by
the Prime Minister and the Minister for Health.
Commonwealth Medical Internships
The Government will provide $40.0 m over four years to support up to 100 additional
medical internship places each year in private hospitals and non-traditional settings, with
priority given to rural and regional areas.
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A total of $6m will be provided in 2013-14, $11m in each of 2014-15 and 2015-16 and $12m
in 2016-17.
This measure delivers on the Government's election commitment.
Further information can be found in the Coalition's Policy to Support Australia's Health
System.
Medicare Benefits Schedule
The Government will amend the Medicare Benefits Schedule and Veterans' Benefits for new
and amended listings since the 2013-14 Budget, at a cost of $15.8 million over four years.
The amendments to the Medicare Benefits Schedule include the:

addition of an item for delivery of Botox® injections to adult patients with chronic
migraine;

addition of an item for tumour tissue tests to grant access to Dabrafenib (Tafinlar®)
for patients with melanoma;

amendment to an item for tumour tissue tests to grant access to Erlotinib (Tarceva®)
for patients with lung cancer; and

amendment to an item for capsule endoscopy to improve diagnostic services for
patients with gastrointestinal bleeding.
Further information will be available in the summary of changes included in the Medicare
Benefits Schedule issued by the Department of Health as the amendments take effect.
Pharmaceutical Benefits Scheme
The Government will provide $124.7 million over four years for a number of new and
amended listings on the Pharmaceutical Benefits Scheme and the Repatriation
Pharmaceutical Benefits Scheme.
New listings from 1 December 2013 include:

Tafinlar® (dabrafenib) for the treatment of melanoma;

Sutent® (sunitinib) for the treatment of pancreatic cancer; and

Prolia® (denosumab) for the treatment of osteoporosis.
New listings from 1 January 2014 include:

Tarceva® (erlotinib) for the treatment of lung cancer;

Iressa® (gefitinib) for the treatment of advanced lung cancer; and

Quetiapine (all brands) for the treatment of schizophrenia and bipolar disorder.
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The costs to Government of some of these medicines are reduced by the revenue from
pricing agreements negotiated between the Government and the pharmaceutical
manufacturers. Details of this revenue is not for publication due to commercial sensitivity.
General consumers will continue to pay a $36.10 co-payment per prescription and
concession card holders will pay a $5.90 co-payment per prescription.
Further information can be found in the press releases of 28 October 2013 and 2 December
2013 issued by the Minister for Health.
The Government will provide $5.5 million over four years for price amendments for certain
medicines currently listed on the Pharmaceutical Benefits Scheme and the Repatriation
Pharmaceutical Benefits Scheme.
The price amendments from 1 December 2013 include:

Aurothiomalate sodium for the treatment of rheumatoid arthritis;

Nitrazepam a short-term sleeping tablet; and

Vigabatrin for the treatment of epilepsy.
The price amendments from 1 January 2014 include:

Benztropine injections for the treatment of Parkinson's Disease; and

Cyclophosphamide for the treatment of cancer.
These price amendments were recommended by the Pharmaceutical Benefits Pricing
Authority, an independent non-statutory body that reviews the price of products supplied
under the PBS and vaccines on the National Immunisation Programme.
Further information can be found in the press releases of 28 October 2013 and 2 December
2013 issued by the Minister for Health.
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