The 'Dispatched' Week in Review - 24 April

Another significant speech for the health portfolio that highlights the reform challenge and the importance of choices. A review announced in 2021 without an official response, and the reform of a major program announced with enabling legislation to be tabled next month. It's all about choices and priorities. Also, official recognition of discussions about managing a more assertive US on medicines pricing. What does it really mean?

Transcript

Paul 0:08

Hello and welcome to the Dispatched Podcast. It's Friday 24 April. My name is Paul Cross. I'm delighted to be joined by Felicity McNeil, PSM, Chair of Better Access Australia. Hi Felicity.

Felicity 0:21

Hi Paul, how's your week?

Paul 0:23

It's been a really interesting week. Really interesting week. Obviously the minister. It's been a bit of an NDIS focused week. The minister delivered a pretty interesting address at the National Press Club, which exceeded expectation in terms of reform ambition. Politically this is about as good as it gets this week, as the response I think generally has been quite positive. Less so from the disability advocates, and they're going to become a bit louder, I think, because they're planning to, I believe, legislate a lot of these reforms in the budget sittings. So that legislation has been in draft phase, obviously, for quite a long time. So these I none of these ideas are new per se or recent. Yeah, it's as good as it gets now. I think the opposition made some interesting points. Particularly, well, this is the third go at reforming the NDIS under the current government, and every time they've attempted to reform it, spending has been higher than they than they forecast prior to announcing the reform, and the minister acknowledged that by revealing that actuaries had advised that not only were they not going to reach the eight percent growth target this year as planned, they had no prospect of reaching it until the end of the decade, which is the full estimate period effectively. And that it's actually going to be thirteen billion dollars higher than previously forecast. So as far as policy ambition goes, I don't think I can't remember in the 21st century a government taking on a social program like this since the PBS in the early 2000s. I can't think of one. Can you think of one?

Felicity 2:28

Oh, in social policy space. Oh look, I think I think under the Howard years you took them on but you grew them. Um say let's give um more um concessional status to people who earn more and let's give um you know introduced family tax benefits A and B, which and childcare subsidies that have started this uh generational transformation we have of an expectation that the government, irrespective of which side of politics it is on, will fund most of our existence. And I think that's the challenge. I mean I think also during those same times in the early years there was quite a strong focus on uh on employment benefits and how we you know the the work for the dolls and the the trying to um then moderate the the the flaws in the system that says as soon as you start to earn you miss out on support and understanding the need to to tier those structures. So yeah, look, are these statements uh a big change? Yes, was the PBS probably one of the more marked reforms we've seen? Yeah, because it's it's easier to do because it's widgets.

Paul 3:50

Yeah, it's much easier than that.

Felicity 3:51

Um it's not services. So the NGIS setting aside Bill Shorten's vision for a warehouse full of wheelchairs. Um it's just the best that's it always makes me think of the Seifield episode.

Paul 4:05

Yes. They get the the used wheelchair.

Felicity 4:08

You can see why they had to move him on to be a vice chancellor. A lot of wheelchairs there. But in all seriousness, the there were there were reforms made to the PBS because of its growth, it's easy to do because it's the purchaser-provider relationship that we have been talking about, which is you as purchaser, me as provider, we're coming to a contract contractual relationship, and the patient isn't actually included in that. When you read all the history of the documents, and I was going back to the 2012-13 budget papers and the transition and all those areas, when you know it was going to cost us 19 billion over four years, uh, as opposed to what are we now forecasting, 63 billion by 2027-2028 annually. Not over four years, annually. It was a really good example where something was an idea and a concept, and the the construction of the constraints around it weren't in place and we didn't learn the lessons. But you are talking about how majority of it is a service. Um look, as sorry, that's the dogs, not me. Sorry, Maggie's sitting under the chair just having a laugh later. I want to be really clear that's not me. But going back to the seriousness of it, um I I applaud uh Minister Butler for the courage to actually put on the public record some of the problems that the system has and the expectations it has created and the need to actually tackle that head on. As someone who watches people miss out on basic healthcare, uh, miss out on basic access to medicines, miss out on basic uh prescribing opportunities, who can't afford diagnostics, who cannot afford specialist out of pockets. We have created a very different system and the capacity of one system as an insurance scheme to provide what appears at times on limited access as opposed to a health system, which punishes me every single day for being sick. And we have to get that balance right. Having you sent me that article, uh press release from Was it Professionals Australia union talking about, you know, don't attack the NDIS, let's attack attack Medicare. It's like, uh, where are we going with this? What are we doing here? This is about a frustration and a tension in the system about what was what we are trying to achieve. Um Better Access Australia, for example, has always been supportive of uh some form of means testing or threshold the way we have for the rest of the health system on the NDIS, just to try and create an equality of access. Because that the principle of trying to give the community and those with a disability the maximum opportunity to achieve their best potential and to have a full, wholesome life in society, that's the same thing I want for my healthcare system too. And the healthcare system is falling far short. And so when we look at sixty-three billion dollars a year for 700,000 people versus$40 billion a year for 27 million people's healthcare, we we have to have a conversation.

Paul 7:44

Yes. Means testing well the th maybe they thought that means testing would actually not exclude many people. I don't know what the nature of the income ranges are for people who are participants in the NDIS. It would certainly means test out members of parliament who are NDIS participants. Uh and I'm so I I I I saw one such member of Parliament sp asking questions of NDIS executives yesterday using her own her own experience as an NDIS participant as a case study, and I was just utterly appalled by that. These are highly paid people who enjoy a raft of benefits as parliamentarians, and I I frankly resent that they are also accessing the NDIS because I know how much they earn. We all know how much they earn and we all know the extent of the benefits that that they enjoy. It was it was really it's gonna be very, very interesting. I I can see what they're doing, they're going to try and wedge the coalition to get this through the Parliament. I can't see the Greens supporting the reforms. So they are going to be relying on the coalition and the Senate.

Felicity 9:15

And the independents.

Paul 9:16

Yes. Jeez, hard to imagine this doesn't get shoved off in into an inquiry.

Felicity 9:22

Yeah, and and look, just to pick you up on means testing, when we talk about means testing, we don't mean that it's all in or all out, not like you know, childcare, which has like a you know, you can earn half a million dollars and still be getting access to some level of subsidy with childcare, which again is something I I think is a concern. It's about the amount that you pay. I mean, our health system is based on if you're a concessional patient, this is the amount you make as a co-contribution to your healthcare, versus when you're a general patient, this is the contribution you make. And I think that's one of the the the lack of confidence the system and uh clinicians have had in having a conversation about what is covered and what what isn't. So why why if I uh need physiotherapy because of my cancer treatment, I can I have to meet all of those costs out of pocket myself versus if that's associated with uh eligibility under the NDIS, then that is fully covered. So those are the kind of things that you know we mean by introducing some equity into the entire social services system, not just to to parts about all in or all out. And also the the level of accessibility to those services based on whether you are accessing it as a health support or a disability support when it's effectively the same need of care, it's just which bucket it is coming from, and therefore which level of subsidy do we do we support you with.

Paul 10:53

The exchange in the parliament yesterday between the NDIS officials and members of its board and parliament, it was very interesting. Uh there was one in particular, uh I think Head's compliance or something, uh at the NDIS, and he was very impressive in terms of his directness about the extent and the nature of the fraud that's taking place and the cost the cost to the system of that fraud. It's quite appalling. And it's a shame. But what's happened here? And you you you you know that I rec recall that story when I was at a full an AFL game six or seven years ago, it must have been.

SPEAKER_02 11:31

Yeah.

Paul 11:32

And I was on a table with uh some people who I hadn't met before, so naturally you start talking, and they were financiers to NDIS providers. And and I was flabby gas at the time. I mean, it all makes sense now. But what's happened, of course, is you've got this massive economy around the NDIS with 200 it's supporting 250,000 providers and their employees. Over 90% are not registered, which is just insane to me. And it becomes, I suppose what I would describe is it's a bit like a self-licking ice cream, that there's a lot of vested interest, and you can see that in the response to the minister's speech earlier this week, where it's now sort of clicked in to try and protect its commercial interest. And I have I am I am all for commercial interest, but I'm also all for equitable access around social programs, and clearly that is not the case with this when you compare it to healthcare. And the fact that the NDIS official said the level of full fraud is so great that we can't prosecute our way out of it.

SPEAKER_02 12:50

Yeah.

Paul 12:51

Which is a stunning admission, and and good on him for admitting that, because often we get the the gobbledygook. And we saw this.

Felicity 13:00

Sorry, you've been listening to the Department of Health for two weeks.

Paul 13:04

I've been listening to the inquiry this week. Uh I've been watching actually the UK Parliamentary Inquiry with the former head of the Foreign Office and the the the the Sir Humphrey, the the the number one bureaucrat in the UK appeared. And she just spoke in absolute riddles. She literally spoke like Sir Humphrey. And we get a lot of that in Australia too. But I thought this official was very impressive in that he was just direct in describing the problem. And the problem is it's a poorly written piece of legislation that is that's been administered according to the Parliament's wishes. And this is this is what it's delivered, and so the Minister has decided no, I'm going to do something about it. And Labor can do something about it. It's much harder for the coalition because Labour will not support it if the coalition is doing it. And they didn't in the actively opposed it.

SPEAKER_02 13:58

Yeah.

Paul 13:59

And they'll be relying on coalition support, and I suspect suspect the coalition. Well, they certainly should support it because it's the it's the right policy decision and it's it's what's good for Australia.

Felicity 14:09

I agree, it is. And like I said, I the thing that's really concerning me right now is that like you said, you sent me that press release, and I hope we don't see more of them. Noting who the professionals Australia represent, and I know it's that you know it's engineers, technicians, pharmacists, uh, which I I don't think the Gil would have supported this one, but it's to actually say, no, go after the go after fraud in the health system. Like, you know, don't come after the NDS, go after this. That is the worst possible thing that you could put out when you're trying to say attack one area of social services instead of another. No, let's have an honest conversation. I know that we've seen a lot in the last few years about accusations about MBS fraud and some uh small amounts of PBS fraud, and we have the professional services review and all those kind of things. That's not what the system needs right now. It doesn't need no look over here first. We expect that all our clinicians and all of us who participate in these systems should be doing the right thing. And I am genuinely concerned about the levels of funding in healthcare and timely affordable access. Hospitals are something different again. We can't build hospitals fast enough, and as Mark Butler said as well at the the press club, he's he's got a problem with people getting old as well. Uh and I'd like to talk about that intergenerational thing later on. But there is a lot going on here. You should not be trying to demonise one system over another. And I I do hope that our um elected officials in the Senate, when they have ideas put before them on how not to support reform in the NGIS, um, that they they do not take those kind of um horse trades seriously.

Paul 15:57

Yes, it was uh you know, I I get dozens and dozens of media releases every day and I send the more pathetic ones to you.

Felicity 16:07

Especially if it leads into the amusing me.

Paul 16:10

And I I just thought that pressure release just pathetic. Yeah. To point at a program that's already staff of funds, you could argue Medicare is you know, creaking. Uh 'cause the the nature of how the insurance operates. But when the average Medicare payment per Australian is minuscule when compared to NDIS participation participants. And and the claimed fraud figure in Medicare is just ridiculous. Yes.

Felicity 16:42

It's based on a flawed methodology.

Paul 16:45

Yeah, yeah. If that's the level of argument that's going to be used to try and undermine those reforms, I I fell smart butler would be pretty comfortable. But I I congratulate him on his speech. I mean it was a right we we should touch on the aged care piece because I made the point that uh he's delivered pretty two significant addresses now in a couple of weeks. And you've got to draw the lines between them. He made the PBS speech a few weeks ago to a non-PBS audience. He c he kind of put a a pin a pin in the balloon uh on any immediate response to reform other than pricing reform. We certainly combined those two things. And in this address, he confirmed that they were going to restore some payments in H care and fund it by removing the premium rebate that over 65s and over 70s get to pay for PHI. Now, there's two points to make on that. One is that it's an offset arrangement, you know. So, Minister, you can have your aged care funding, but you've got to find it somewhere. He's found it there. The critical thing is that uh you know, politicians and and governments tend to go into their comfort zones. Labor have never supported the private health insurance rebate. It's something they targeted the minute they could, even though they went into the 2007 election promising to leave it alone, they attacked it as soon as they could. And so this is yes, a way to fund something. His argument to justify was pretty poor, I thought. But and it's this and there's some actuarial advice has come out today so to say that it's actually not going to work the way you think. But to me, it was you know, you go you go back to your comfort zone, and Labour's comfort zone is attacking private health insurance. And I think for the pharmaceutical industry, there might be a bit of a red flag here. That look, generally not a lot changes on the PBS between governments. But I think you'd have to expect that the minister is going to say, if you want me to reform HTA, if you want me to keep listing medicines, if you want me to do any action on most favoured nation, if you want more action on supply shortages, then you're gonna have to give me something on the other side. So once we've got the savings agreed, that's going to enable me to make some choices about where to invest that money. I think I think that's realistic.

Felicity 19:28

Yeah, and look I I really hope that we the the support at home packages have been a real um shortcoming for this government. They announced the new reforms, they renounced the extra money, they announced, you know, they were supporting Fair Work Commission uh pay rises for those that work in the sector. But in introducing these refined programs, we've seen a lot of people disadvantaged. We've seen uh someone who's had to try and navigate getting an uh an assessment for a loved one, how long they take. So it is a real tension point. And I reflected, like you said, uh that the minister's got a bit of a habit right now of oh, he mentioned aged care at NDIS, he meant PBS at a broader health system. I can't wait for him to go and talk about, you know, aged care, and he'll probably talk about um fuel excise. I don't know, but that's what he seems to do. But the thing that really got me in this speech, and it's a broader narrative by the government, and I'm I'm not comfortable with it, which is their absolute ideology into their concept of intergenerational equity. So let's think about that for a minute. So they they're looking at what they're going to do for CGT, because all these boomers have this money and they've built up this equity and they've built up this this these funds, and you know, they have to transition that money back to these people, and you know, we have to redistribute that in the system. These are people in their 60s and 70s and 80s who you and I often talk about have spent their whole life working. So the reason that they have money today is because they started working at 15 or 17 or 19, and they have worked all their lives and they have saved all their lives, and many of them have been able to stand on their own two feet and provide for themselves into retirement and support their own uh living arrangements, whether it be in an aged care facility or at home. But these are people who have contributed to our country for 50, 60 years. And now we start every conversation with, you know, how dare you old people have access to the system, you know, you need to give back. My frustration with that is you know I am not a fan of self-funded retirees having better access to concessional medicines and the concessional MBS than young working families. I do believe that our system needs to provide better support services in that area and equalize a bit more. What I don't like is saying, you know, you've done this, you've taken all their money. Not only are we going to take your money from you and And give it back out as we see fit, but we're also going to start charging you more. People do not realise, those of us who are not of a retirement age yet, I'm probably pretending I'm younger than I am, but it's still a little way to go. Uh we're not faced with the fact that people today are being asked to put in more money towards their aged care facility services. They are being uh put with lower thresholds for actually how much money and equity they can have before they have to contribute more. The support at home packages, there are more available of them, but they are um lower value, you know, and the continuing contribution rises are quite significant. So while we're all sitting here and people are rubbing their hands going, great, we're going to be able to get access to all this money because we're going to tax these people who, you know, seem to have worked hard all their lives and you know, and now we want to take it back for them. Can we just also remember that these people did actually earn their money? They did actually support themselves, and we're now actually saying to them as we're about to tax them more. Oh, by the way, but we expect you to pay more for your old your older living in life. We expect you to pay more for aged care, pay more to stay at home and have different outcomes. And I that I think was the most offensive thing of the whole thing for me, which is can we just have a grown-up conversation about the way we are using language right now to demonize anyone over the age of 65?

Paul 23:19

Yeah, shock horror. Someone who's been in the workforce for 40 years has more than someone who's been in the workforce for 10 years.

SPEAKER_02 23:23

Yeah.

Paul 23:24

I mean, give me a break. And and you know, the only inevitable outcome of government making changes in an effort to ensure greater intergenerational equity is less intergenerational equity. The fact is that a lot of this happens, a lot of people, young people are struggling today as previous young people in previous generations struggle. We forget that, because obviously history is obviously the the the least taught subject in schools and universities these days. But uh 30-year-olds in Australia in 2026 are probably the wealthiest 30-year-old of any previous Australian generation.

SPEAKER_02 24:10

Yeah.

Paul 24:12

Their access yes, I you know, I I I have a real problem with the amount of debt people are leaving universities with. I've got a real problem with the negative equity people are starting their careers with. A real problem. But intergenerational equity, or so-called, operates on multiple different ways. University, tertiary education has never been more accessible. It wasn't anything like accessible as it was. You know, if you think about 30-year-olds or 20-year-olds in the 1950s or 1960s or 1970s or even 1980s, the vast majority did not even finish high school.

SPEAKER_02 24:48

Yeah.

Paul 24:50

Let alone have the opportunity to go to university. So it's a it's it's a it's a two-sided coin, this issue of intergenerational equity. Uh it's harder to get into housing, undoubtedly, because not because of baby boomers or older people, it's because of governments and poor policy making that's making property development more difficult and more expensive. So the the the the simplistic way this issue is presented, I I I like you, I find it incredibly frustrating. When when the minister said at the National Press Club, I can't justify someone getting an additional benefit because of their age, what are you talking about? The whole welfare system is based on your age. Uh there's a thing called the age pension. So a welfare payment that that that that that you so someone who is on the age pension gets paid more than someone who's unemployed and of working age.

Felicity 25:53

Childcare benefit.

Paul 25:54

Yeah, I mean, so it's it's kind of crazy. The whole thing is basically based on where you are in your stage of life. So I didn't really understand that. I think it in many ways, like all governments, is that there's nothing like a crisis. And it's a bit like the global financial crisis and the pink bat thing. Yeah. And the school building program. It just gave building education opportunity. Yeah, it gave the government an opportunity to do something that they really wanted to do. And I think this might be the same in a way. It's it's it's opened up the door to do something they want to do, a political justification for a policy that they always wanted. I just think government talking about these things is going to lead to bad outcomes. Because I'm not of a view that government can solve everything. And the talk about the capital gains tax, I really don't want to talk about the capital gains tax, but the if they do amend the capital gains tax, that is that is very complex because people think, oh, well, it's negative gear in housing. Capital gains tax discount and negative gearing applies to every single asset. So if you bias one asset against another, you know I always say money flow finds the fastest path downhill like water.

SPEAKER_02 27:06

Yes.

Paul 27:07

You're just going to shift all the incentives for investors. It's not that they're going to lose their money, they're just going to put it somewhere else. So this is the this is this is the crazy thing, is that the people who've got you know their their home and four investment properties, if they lose a capital gains discount, for example, and I know this is all speculation on a couple of those properties. I mean, it would be dreadful if they applied this retrospectively to a previously made investment decision. But even if they did, well, how is that going to be implemented in a way that doesn't massively distort the investment environment in Australia? I don't know. And I and I and I'd have to tell you, I don't think government knows either, because I don't think they've got to go record on those decisions.

Felicity 27:54

No, but I'm looking forward to an advertisement that explains it to me, such as how to use a roof rack and you know.

Paul 28:00

Oh, well. Can you imagine the meeting? This is the most inane nonsense. Well, what you've got to do is you've got to remove your roof rack.

unknown 28:13

Yeah.

Paul 28:13

Improve your fuel efficiency. Can you imagine the meeting they had where they decided what we're going to encourage people to remove their roof racks, remove their spare tire, uh, pump up their tires a little bit more, because we're all walking around with flat tires, of course, and carry less cargo. So kids, you've got to walk to school. Yeah, I'm gonna say walk to school. Walk to school now. It's just it's just the stupidest nonsense. It's just the government. Just shut up and go away on this stuff.

Felicity 28:38

I love also one which is, you know, try and combine all your trips. So, kids, I'll be dropping you off and um I'll be picking you up again on the way back because I can only come out once.

Paul 28:47

And the Prime Minister walking around Southeast Asia with jerry cans basically, trying, you know, begging for fuel. Oh my goodness. It's so, it's so it's just something's gone terribly wrong.

Felicity 29:00

$25 million. Think how many medicines we could have put on the PBS.

Paul 29:03

Is that how much they're spending on that campaign?

Felicity 29:05

Yeah,$25 million.

unknown 29:10

It is.

Felicity 29:10

It's I'm I'm very impressed at the Deputy Prime Minister of New Zealand who obviously was asked about how Australia was managing this, and he was very direct in saying, Well, we're not doing any of that stupid advertising. Uh New Zealanders are smart, we don't need to basically tell them how to suck eggs. Um we're fine. Thanks very much.

Paul 29:28

Well, they've got probably more reserves than we have.

Felicity 29:32

And it seems a little bit more common sense and respect for the community. Yeah, but it's common sense, isn't it? Telling people remember, don't overfill your petrol tank too much. There might be a spillage or evaporation.

Paul 29:42

You might you might lose like five mils or something in spillage. As soon as the as soon as the thing clicks, stop filling. Well, when it clicks, it stops filling. Because of course these people are driving Teslas and Chinese made EVs. And you know I drive a gas guzzler.

Felicity 29:59

I know.

Paul 29:59

And I'm gonna drive a gas guzzler until they make it unlawful for me to do so. They're gonna have to pry a large car with a big engine from my cold dead hands before I give them up.

Felicity 30:10

Note yourself, I'll I'll include that in the funeral procession.

Paul 30:15

I l I love my 98 lettered petrol. Uh that is the that is the worst. I actually heard it. I was listening to a podcast and it came out as an on an advert and I burst out laughing. I think I was walking through a supermarket and I just burst out laughing.

Felicity 30:34

It's just what is did you walk to the supermarket or did you drive?

Paul 30:38

I drive. And you know what? And you know that you know that setting in cars nowadays where they when you stop, it shuts off. That's another thing they've told you. Make sure that's enabled. Mm-mm. Not in my car. I switch it off. It's the most annoying thing. I like to get off a nice fast start. Oh, it's just uh I want to talk about most favoured nation. So word is that there are discussions between individual companies, government, small G government on how to do workarounds. It is causing problems. Uh I've heard some rumors about what that is. None of them involve just paying higher price. But I did get a comment from the department. And I thought it was really interesting. And you and I are both the same, is it? When you get these comments, you've got to really deconstruct them.

Felicity 31:29

Yes.

Paul 31:30

So I'm gonna read it to you. The department regularly engages with sponsors of PBS Medicines on a range of matters. Nothing exciting there, including the US government's most favoured nation, prescription drug pricing policy. I love it how they don't capitalise the M, the F and the N. Now, this is where it gets interesting. Some sponsors have cited MFN and international reference pricing concerns. The department is engaging with sponsors to address these concerns where possible, in line with current policy and legislation, including the advice of the pharmaceutical benefits advisory committee, in line with current policy and legislation. Now, policy and legislation aren't the same thing. You can change policy as long as it's consistent with the legislation. But what they're basically saying is that we have a sort of a narrow very narrow remit in which we operate, and that limits what we're actually able to do on MFN. So if I'm a company or the industry, I'm saying, well, you might need to change the policy and the legislation. If if access, which is the goal, and maintaining access or ensuring access is important, then the two things that you cite as limitations might need to be changed so that we can address it. That's how I read that.

Felicity 32:54

Yeah, well, first of all, I think you are misquoting the department. What you sorry, the department never really says anything about the PBAC without saying independent PBAC.

Paul 33:09

Oh fuck.

Felicity 33:09

Did they? Did they say independent?

Paul 33:12

They did.

Felicity 33:12

Yeah, there we go. So you didn't.

Paul 33:14

Because they're not independent.

Felicity 33:15

No, I know they're not, but I just sorry, I was having a laugh because every time they do that to try and put this like, you know, big, powerful, you know, we couldn't possibly do anything without the independent PBAC. No, that's it.

Paul 33:27

Nice pickup.

Felicity 33:28

Yeah, yeah, no. But uh I I thought maybe they changed with BFS.

Paul 33:33

Do you agree with my interpretation of what they're saying? There's not much we can do. Which I then say, well, then you've just got to change the policy or the legislation if it's a problem.

Felicity 33:44

Yeah, but I I think but it's the the usual approach of at the moment we can just bat this away because no one's really making it a problem for us. So as long as we have you know the odd individual conversation here and there and work things through, we can just keep batting it away. And traditionally, as a sector, the sector doesn't tend to come in very strongly and make the case for change that puts pressure on us to actually do so. So they are very comfortable with putting this out, and unless someone actually challenges it and challenges it as an entirety, they'll continue along. I think it's also how we've been watching them uh, you know, stand strong and say, you know, we'll defend our PBS, it's not for sale. It's like, well, like as I thought you quite was quite funny last week, well, who'd want to buy it? But um creating this artificial construct that the US government is trying to take something that is a fundamental piece of Australia's health infrastructure, and that's not what they're preparing to do at all. That no one's attacking the PBS for um what it does. We just kind of get a bit zealous about how we go for pricing and we traditionally bunker down and go, we don't want to do this. And until something actually makes us move, we can usually get away with these kind of platitudes and the fear-mongering of you know our our PBS is at risk. And unless companies and the industry are very clear and articulate and challenging the way that's being presented and making the alternative case that the community can understand, then this will continue to be something that it can affect patients' access to new medicines, but no one's ever going to hear about it or care about it. So I always look at this and say, I I hope MFM was an opportunity to have a bolder conversation about how long we as a community wait for access to medicines, not just the first molecule, but the second, third, fourth, and fifth indication and the other ones that actually might help people in the community and the delays that we tolerate because we are a universal delay system, not a universal access system. And until that is challenged.

Paul 36:11

Yeah, it worries me that companies are engaged in non-transparent ways on workarounds.

Felicity 36:18

Yeah.

Paul 36:19

Because naturally they will be thinking about it, or instinctively they'll be thinking about it from their own commercial need rather than system level considerations. Is this good for the system?

Felicity 36:31

So what type of workarounds are they?

Paul 36:35

Uh well, obviously higher list prices. Uh which creates other problems.

SPEAKER_02 36:42

Yes.

Paul 36:43

Because of the way the rebates work. The rebates work. Uh and I also think how the nomenclature used in how products are described. How products are described. So MFN, I don't I'm I don't want to say too much because I I don't want to give away sources, but there are workarounds you could do in how product is classified, how reimbursed product is classified potentially.

SPEAKER_02 37:08

Okay.

Paul 37:08

Okay, so uh all of those things are possible. And I think the question individual companies need to ask is will they make the system better or worse? Now you can argue in simplistic terms that, well, if it enables us to list our medicine, obviously makes the system better. Yeah, in a one-dimensional way it does. But if the rules change or the way of operating work change that give officials more scope to get what they want, don't be surprised when they use that in the future in a way that you don't expect now.

Felicity 37:46

Yeah, so we're talking new medicines, right? I don't mean like new, but like F1 kind of medicines. Yeah. Yeah. Okay. So just remember all the underpinnings of price disclosure. Which is uh the evolution of how a system decided to offer solutions to pharmacy to you can buy you know, if you order from me instead of someone else, I can give you this, and this is how I make it cheaper for you or solve a problem for you, by a variety of different methods of um discounting. So, you know, whether it's free product or free services or additional things or you know, classic one in uh oncology was you know, here are the gloves and the syringes, all these things that the acutrements that we d redefine things as to actually solve a problem and the system at the commercial level solved a problem for market entry and uh prioritization of some medicines over others in a competitive space. And that is now what price disclosure chases every single day of the week. So if you are working on new nomenclature and new descriptions for things, remember what you do now is the basis of, as you've quite rightly pointed out, Paul, the basis of how we design policy to chase things down thereafter.

Paul 39:16

Yeah, everything happens for a reason. You know, this isn't you know, officials might be thinking in one sense, in immediate terms, on how to give as little as possible and lose as lose lose the least in how they manage MFN. But they'll also be thinking about how how how might we use this in the future to get something that we would like. And I don't think it's unreasonable for them to do that. I think it's their job. I think I think what has to happen is companies and the industry more generally. Companies shouldn't be going into these discussions without an awareness of the broader industry position. And the broader industry position needs to be informed by what's going to happen in five or ten years. Because I think even if you know Trump's not going to be around forever, the Democrats could re-re-take control of Congress at the end of this year. But do we really think a more assertive US is going to become less likely? As I understand it, the the legislat the legislative basis, proposed legislative basis for for a component of MFN, uh Globe and Guard, is unlikely to navigate Congress. That's the that's the pricing, international reference pricing mechanism that includes Australia. But instinctively, the Republicans are not interested. Most Republicans, forget about MAGA, most Republicans are not going to be interested in government engaging in price fixing that way. It's just that it's instinctively it's not what they like. So most people believe it's not going to get through. What's more, even if it did, it's going to be subject to challenge, legal challenge. Price fixing is not something the US government is particularly fond of. So these are all considerations. But you've got the Inflation Reduction Act. The Democrats have previously proposed things like forms of international reference pricing. So this isn't going away. The easiest solution here is for Australia just to just pay more. Just to pay more. You don't have to pay a huge amount more, probably, because the way this is working is complex. And I do think in the US there's a lot of emotional responses to markets like Australia demanding such low prices. But let me I'm just going to give something away here. You know why Australia demands low prices? Because it they generally get accepted. Yes. Now if you keep accepting them For for medicines, the you know, if you don't if you don't accept them for medicines the government that doesn't particularly want it's not, you know, they're not going to be uncomfortable with that. But this is if it's a medicine the government does want, well historically they show some flexibility. But if you accept low prices, certainly substantially lower than than what's in the US, then this is this is what's going to happen.

Felicity 42:09

Well, I think we all learned that from the 2022 agreement and the um catch-up price reductions and you know having first of all been 100% supportive of them and then uh having a panic attack about them and that's it, we're gonna lose medicines.

Paul 42:25

And accepting them.

Felicity 42:25

And then they accept the prices. So um and that that's a that's a consistent message that the parliament gets. So in a a parliament that is going to if you if you look at this budget, and you know, we're still looking at the each portfolio, we're supposed to be targeting five percent of savings. Obviously, the NDAS is falling a little short. Um they'll they'll try again next year. Um But if you look at the these things that are coming through, if you look at what is going to fall on the priority list for the senators and the deals that are going to be done, why would the Senate have any interest in the medicine sector right now? Because they've cried woof many a time, they've said they couldn't possibly, but they have. And in an area right now in this budget where so many people are going to be hurt, when you think about how much effort uh the senators and and the number of MPs have put into the aged care reforms and what a devastation that has been to so many um older Australians, where does medicines fit in all this? Yeah. Because as as a patient, they will always write for their individual constituent who doesn't have access to a medicine and is doing a GoFundMe or waiting for something. They would they can churn through all of that on an individual level. But if I sit here and reflect on where does medicine sit in the next six months as a priority issue for intervening, as opposed to Just letting the system do what it normally does. Government sits down, the industry sits down, everyone says it couldn't possibly be done, and then bang, a piece of legislation shows up. If I have to spend time in my my limited resource office, this is kind of not on the reader.

Paul 44:15

Yeah, well Mark Mark Butler has already bought time on all of that with his address at the AFR Healthcare Summit.

SPEAKER_02 44:22

Yeah.

Paul 44:22

You've worked with us for 25 years, it's been great. You've had such an important role in ensuring PBS sustainability. I'll get an update on the HTA review mid-year.

Felicity 44:32

Yeah, but it's even broader than that. It's just that there is no clear narrative for a senator or a member to sit there and go is their reporting.

Paul 44:42

So let's compare this to the NDIS. Obviously the minister feels under no pressure to do anything on the PBS. And he's buying time, buying time, buying time, buying time. So that goes to your point. There's no political pressure, there's no burning platform. On the NDIS, he has announced reforms and said that they will be tabling the enabling legislation in less than a month.

SPEAKER_02 45:07

Yeah.

Paul 45:08

In less than a month. That's political will. That's a political choice. So he's made a choice that we need urgently to do something on the NDIS. Don't really need to do any, because I'm under a lot of pressure on it, internally and externally. And I thought some of the research, some of the surveys on this, you've got to sort of take some of them with a grain of salt, but 70% are supportive of the NDAS, but the same people think it's been ripped off. And I go back to my experience of the football.

Felicity 45:36

Yeah.

Paul 45:36

Where there's a whole financial services sector.

Felicity 45:40

Able to buy very expensive tickets.

Paul 45:42

Able to buy expensive tickets to the football. So that that was that that was interesting to me. But be but I agree with you 100%. 100%. He someone is telling him that, Minister, just kick this down the road, kick it down the road. Let's get it into the next negotiation. We'll get it behind closed doors. It's going to be all off Broadway. Uh nothing, there's not going to be too much to do here. Just keep listing in and making listing announcements, listing announcements, listing announcements. And that that builds up a defensible position.

Felicity 46:15

Yeah, because in the end, what you'll start to see with the NDIS is it becomes participant-led in the advocacy. There is such a strong community, so it's not just about the 700,000 people who are on it, but the services that support them. But the service sector is smart in that too and know that that is the voice. Whereas the medicine sector tends to be the medicines industry talking and turning to patients at the end going, Crikey West Up. Yes, could you say something?

Paul 46:47

The the medicines, the PBS is a highly institutionalized framework where there are a well-known set of players. There are very few surprises if you apply a bit of game theory to it. Very few surprises. Everyone acts in a mostly very predictable way. And so it moves like a big blob. So if the blob blows out somewhere, if you put if you poke the blob somewhere, you pretty much know where it's going to blow out. NDIS, we're not there yet.

Felicity 47:16

No.

Paul 47:16

It's highly unpredictable.

Felicity 47:18

And I guess the final one is that you know, I noticed the industry, you know, keeps talking about its HTA review and the implementation of its recommendations. And I have I still enjoy immensely your articles about the Constitution for Australia. We're sorted faster. Um voted on.

Paul 47:34

And voted on by individual states faster.

Felicity 47:36

Yeah, yeah, it's pretty good. But I asked the industry again to just reflect, not only am I saying I I struggle with your relevancy in the in the forthcoming few months because of what's going to come in this budget and and the the six months thereafter. But we've had articles this week about just how many reviews have been undertaken by this government that have still not been responded to or implemented. And I look at some of those reviews and how incredibly important they are. You know, one that always sticks in my head is the diabetes review as as something that was quite transformative, of course, you know, had the the always started because of the GLP ones. But if you look down that list of reviews that government is still getting its way through, the HGA review is just like nowhere.

Paul 48:24

And it was announced by the former government.

Felicity 48:26

I know, but it's nowhere in respect of what the community is concerned, has not been responded to. And so I think you know, it all behooves us at times to reflect about what is important to us, but in the parliament and in the community, what is important to them and where do we fit? And sometimes we have to be humble and say we're not as perhaps relevant right now as other things, and how do we change that?

Paul 48:51

Yeah, how do we make ourselves relevant? And that's going to take a language change. And this is what we're focusing on at our event in Sydney this year is a sort of more humanistic approach to the language. But yeah, the historical links like I discussed recently, I literally can't find another review that's lasted this long. Royal commissions don't last this long. And I mean, we're talking what it would take nine years to do the pantumer listing. And there is really nothing in the HTA review that would change, alter that. So the the the time between initially announcing a possible pan tumor listing for PDA1s and doing it is kind of equivalent to the Edwardian period. Now you think about what the Edwardian period delivered.

Felicity 49:38

Yeah, fair bit.

Paul 49:39

All the architecture and the design and you know, lots of beautiful collectibles. I'm not even joking about that. It was like from 1901 to 19 cents and nine years. But it's but it's it's that's that's what we're dealing with. And so the fact that it took nine years to do that, well, the fact that the HTA review was announced in 2021 and in mid-2027, the minister is going to keep expecting an update on the implementation process he announced a year ago, having received the final report two years ago. He obviously feels perfectly comfortable. And someone he he thinks he can get away with it, and we all know why he's doing he's pushing it post-1 July. So he says, Well, this is gonna cost, so this is what we're gonna have to do, we're gonna have to negotiate. It's so obvious that this is this is what they're doing, but it's it is you're absolutely 100% right, as usual. Uh because you see everything from that bureaucratic uh lens, which is well, it's just not a burning platform.

SPEAKER_02 50:47

No.

Paul 50:47

And on the NDAS, he announced the reform this week and they're legislating it in a month. Well, they're tabling the legislation.

Felicity 50:56

Yeah, in a month. So that's the next budget.

Paul 51:02

They need to get it done quickly. That's the political choice that the minister has made, and I think we need people to to just think about that. Alright.

Felicity 51:14

Well, always a pleasure.

Paul 51:15

Yeah, I'd just like to recognise all the veterans out there. Is it Anzac Day tomorrow?

Felicity 51:20

Yes.

Paul 51:21

Uh very important day to commemorate and remember the fallen, the people who served. Uh Australia and New Zealand.

unknown 51:32

Yes.

Paul 51:33

And reflect on their contributions, enduring contributions.

Felicity 51:38

Thank you for your service and your continued support for everything.

Paul 51:42

Yeah, all of you, particularly uh Victoria Cross winner, is currently going through it. Being treated absolutely appallingly.

unknown 51:52

Yep.

Paul 51:52

Uh so I'll leave it at that. But um, yeah, well, uh, thanks Felicity, and thank you everyone for continuing to listen and give us give us giving us some great feedback, which is good. And uh yeah, we hope everyone has a uh a valuable and reflective Anzecto.

Felicity 52:16

100%.

Paul 52:17

Thanks, Felicity. Thanks.