Thank you very much for that introduction …
Good evening to Warwick Wilkinson, President of the Foundation, who is standing
down this evening after 20 years of service.
John Bronger, National President of the Pharmacy Guild of Australia, distinguished
guests, ladies and gentlemen.
I am delighted to join you this evening. I know what an important annual event the Governor’s dinner is and I am particularly honoured that you have invited me to speak to you, in this - your 25th anniversary year.
I’ve always thought the subject of tax is a bad topic for an after dinner speech! If you are still eating, you may choke, and if you have finished your meal it will give you indigestion!
So it is a pleasure indeed to range beyond my immediate portfolio responsibilities of tax, superannuation and insurance, to share with you some ideas about the imminent challenges facing both the Government and the pharmacy profession – in particular the costs and pressures an ageing population will place on our health care system in Australia.
It’s hard to remember what we were doing in 1978.
But clearly some of you here tonight had a vision of promoting world’s best pharmacy practice for the benefit of the Australian community and conceived the Pharmacy Practice Foundation as we know it today.
The original vision is being realised. The Foundation has achieved much – the creation of the Chair of Pharmacy Practice and appointment of Professor Benrimoi into that position in 1991 – a position he still holds today.
Other achievements include the establishment of the Australian Centre for Pharmacy Research and Development, the creation of strong links with other Foundations including the Medical Foundation and the forging of relationships with industry – including the pharmaceutical industry.
The Foundation has established a Pharmacio Chair of Clinical Pharmacy, has developed post graduate programs, scholarships and created honorary positions; and has funded important research and developed practitioner teaching arrangements and programs for students to gain experience in rural areas – to mention some highlights.
Clearly, the Foundation is a vital contributor to the University of Sydney and the tertiary pharmacy education sector. These things are not achieved overnight, nor are they achieved by accident.
It is a tribute to those who realised this vision 25 years ago that we are
gathered here tonight to celebrate and to salute you.
And just as we look back to praise the achievements of the past, we are compelled
to look forward to acknowledge the present day challenges and to imagine the
role this fine Foundation will play well into the future.
It is no accident that a main long-term focus of contemporary political
and community debate is the greying of Australia.
Perhaps US science fiction writer John Sladek put it best when, speaking of
the future, he said:
“The future, according to some scientists, will be exactly like the past, only far more expensive.”
An empirical snapshot of an expensive future indeed was delivered in the Government’s first Intergenerational Report released as part of last year’s Budget.
In the 2003/04 budget year alone, the Government will spend around $31 billion, representing around one-fifth of total Government spending and an increase of some 65 per cent since coming to office in 1996.
The Government’s Medicare Plus package builds on its commitments to Medicare, where all Australians can access Medicare rebates, obtain free treatment in public hospitals and obtain affordable prescription medicines through the Pharmaceutical Benefits Scheme.
As the Intergenerational Report revealed, one of the greatest pressures
on the Budget going forward will be health expenditure.
Marrying the need for a well-functioning health system with the overarching
need for strong economic management is and will remain a key challenge for
Government.
Growth in the PBS
Whilst health costs are increasing as the population ages, technological change and advances in medicine are having an even greater impact on the Budget.
More sophisticated treatments and diagnostic techniques have enhanced the quality of life for people, particularly the elderly, but are expensive and add to cost pressures and debates about equitable treatment and who should have access to new and expensive therapies.
Where these two significant developments coincide – the ageing of the population and the medical advances to treat an increasing number of illnesses – is where the cost pressures are rising fastest.
One of the challenges for us all, therefore, is managing the growth in the
PBS and ensuring its sustainability into the future.
The PBS seeks to provide timely, reliable and affordable access for the Australian
community to appropriate and cost-effective medicines.
The PBS is recognised internationally as being one of the best systems in the world as it makes medicines for most medical conditions more affordable for consumers.
However, making medicines affordable for Australian citizens is not cheap. Of all the components of health expenditure, the Intergenerational Report forecast that PBS costs would grow the fastest. Indeed, over the past four years, the cost of the PBS has increased by 60 per cent to around $5 billion per year.
This is in stark contrast for example to the United States where in recent days, regulators agreed to a centrepiece deal to provide prescription drugs benefits for millions of elderly Americans that would begin in 2006, projected to cost more than $400 billion over 10 years.
Recognising this growth in cost, the PBS has been one area where the Australian Government has sought to make some modest changes now to help ensure its sustainability for all Australians into the future.
This includes an attempt to change the co-payment rate by a small amount. Under the Government’s proposal, co-payments for concession card holders, such as pensioners and seniors health card holders will rise by $1 to $4.60 and co-payments for others will rise by $6.20.
While a concession card holder will pay only $4.60 this is only part of the cost of many PBS medicines that are heavily subsidised in the Budget.
With 158 million PBS subsidised prescriptions supplied last financial year, or an average of 7.5 prescriptions for each Australian, we all need to ensure that mechanisms are in place to provide appropriate medicines through the PBS at prices patients, and the community more generally, can afford.
However, as I am sure you are aware, relevant legislation to achieve these reforms has now been blocked in the Senate twice and forms a double dissolution trigger in the current term of government.
A government can live with compromise and expects to be accountable, but what makes it difficult for government is when urgently needed reforms in the national interest are hijacked in the Senate.
What is needed is a rethink about Senate powers – how to restore the Senate as an important check on the on the government of the day without bringing the reform agenda to a standstill.
Role of pharmacists as part of the PBS
But quite apart from the vagaries of the Senate, importantly pharmacists and wholesalers have a crucial role in managing the growth and sustainability of the PBS. No doubt the Foundation can also play an important part, in partnership with Government and industry, to help manage the cost of the system.
The Government also makes a significant investment in assisting pharmacists to play this vital role.
The third Community Pharmacy Agreement has provided a strong platform from which the Government and pharmacies have worked together to provide quality pharmaceutical services for all Australians.
The current Agreement includes $400 million in program payment incentives over the five-year life of the Agreement, in addition to covering other remuneration issues and pharmacy location rules.
These incentives have sought to promote quality and effective medication management, through Home Medicines Reviews, as well as rural and remote pharmacy initiatives.
Home Medicines Review
Pharmacists play an important role in ensuring and improving safety and quality in the use of medicines by all Australians, particularly those who are most vulnerable – the very sick and the elderly.
The Home Medicines Reviews play a key role in addressing the issues of medication error and combines the specifics of GPs and pharmacists to meet the medication management needs of their patients.
The Home Medicines Reviews program has been a success to date largely due
to the exceptional take-up by pharmacists.
As the population ages, the demand for Reviews and other medication management
services will continue to grow and it will be essential to make sure there
are enough accredited pharmacists to meet this demand.
It is pleasing to see the recent launch of the Medication Management Review online training course by the Pharmacy Guild to help pharmacists gain accreditation to perform Home Medicines Reviews.
This is a valuable community role played by pharmacists. It is as much about allowing the elderly and those with disabilities to remain in their homes instead of institutional care and it is a valuable adjunct to the peace of mind of those who care for them.
Rural and Remote Pharmacy
The Government is strongly committed to meeting the health needs of all Australians – including those in rural, regional and remote areas and the Foundation has identified service delivery of pharmacy services as a particular focus of its vision.
The third Community Pharmacy Agreement contains specific measures to support pharmacies in rural and remote areas, and to attract and retain pharmacists in those areas that people who have lost community services and may not even have a doctor, at least have access to a pharmacist.
The Rural Pharmacy Maintenance Allowance, the Succession Allowance and the Rural and Remote Pharmacy Workforce Development Program, are all aimed at these goals.
The Australian Government also funds a Rural and Remote Professional Scholarship Scheme to assist with the financial costs of postgraduate studies.
This scheme is open to health professionals (other than doctors and nurses)
who live and work in rural and remote areas.
But the hallmark of any profession is how you prepare the next generation
of professionals – how well they are equipped to meet the professional
and personal challenges that come their way.
Our tertiary education system is vitally important if Australia is to remain internationally competitive. In the future, Australia’s ability to compete globally will increasingly depend on the knowledge base and problem solving skills of the Australian workforce as well as its ability to adapt and innovate.
In deference to the presence of the Vice Chancellor and the state of negotiations between the Minister for Education and the Vice Chancellors, I won’t wade into a debate on the higher education reform package.
Getting between the Vice Chancellors and their funding would not be a comfortable place to be!
So, rather than comment on the role of the Foundation and tertiary education, I would like to speak more broadly about some developments in the corporate sector that will in time be faced by Foundations and the not-for-profit sector.
In particular, as Foundations engage the corporate sector commercially how are they to manage conflicts of interest and at the same time attract necessary funding for research?
In these days of heightened consumer awareness and expectations of sound corporate governance, there will be increasing pressures on Foundations, the not-for-profit sector and community organisations to observe at least the same standards of governance as corporations.
There will be expectations that Foundations will put on the cloak of social responsibility and provide role models for responsible research and the use of new technology.
With the growing acceptance of triple bottom line accounting there will likely be increasing scrutiny of the source of funds donated for charitable purposes by organisations that may not be favourably looked upon by some in the community, such as tobacco manufacturers and gambling organisations.
With many important organisations and foundations partly or wholly dependent on contributions, donations, bequests and other forms of fundraising, this issue is likely to grow and attract increasing attention.
There is clearly an increasing awareness and preparedness of the community to demand that businesses do the right thing – and awareness and expectations are greatest where health is at stake.
We are all familiar with the worldwide demand for the pharmaceutical industry to respond to the AIDS pandemic and provide life-saving drugs at low cost or no cost to those suffering in developing countries, and by contrast, on our own doorstep in recent days, the increasing demand for disclosure of incentives or gratuitous arrangements between pharmaceutical companies and the medical profession.
I note that the ACCC has now approved a tough new code of conduct for the pharmaceutical industry that even suggests that hospitality at their functions should eschew lobster and prawns in favour of sandwiches, quiche and rolls!
While that level of particularity may seem over the top to some, the response follows complaints from consumer groups about excessive hospitality from pharmaceutical companies and a perception that doctors were susceptible to such blandishments to the detriment of consumers.
I have no doubt that increased scrutiny of all organisations, including
Foundations, will only increase calls for greater focus on corporate social
responsibility and that they demonstrate greater awareness of the potential
for conflicts of interest.
Increasingly Foundations will need to have regard to the ethics of benefactors
to avoid being tarnished or criticised for their sources of funding.
And just how intently should trustees look a gift horse in the mouth?
Reputational risk can be an elusive concept, dependent to a large extent on perceptions in the media, public opinion and talk back radio.
Whether a Foundation is at risk may at times involve trustees in matters of fine judgement. And even then, the most rigorous risk management tools do not provide a moral compass to guide decisions.
Interestingly, in Britain, Tony Blair’s government now has someone with the improbable title of Minister for Corporate Social Responsibility!
I am not sure what precisely a Minister for Corporate Social Responsibility does or would do – but whatever it is, I just hope it doesn’t segue into my responsibilities!
But my point is that issues of governance and social responsibility cannot be confined to the corporate world alone but will become a major focus of the not for profit and charitable sector in meeting community expectations in the very near future. It is best to think about it before one is forced to.
Conclusion
The Government is committed to maintaining its relationship with the community pharmacy as an integral and valued part of the health care system in Australia.
As a first port of call, the local pharmacist is the most frequently consulted health professional in Australia and is often in the best position to help Australians meet their immediate and ongoing health needs.
The Foundation embodies those values and traditions of trust, excellence and community outreach.
In recognising the valuable contribution the Foundation has made to the pharmacy sector and the community more broadly may I encourage you to continue with enthusiasm and commitment, your vision for pharmacy in the future.
This evening we have dwelt a bit on drugs (and I hasten to say those sanctioned by the PBS!) But in conclusion it does remind me of an incident divulged by Sir David Tweedie – Chair of the International Accounting Standards Board - when he was in Australia recently.
Whilst this may be an apocryphal story, it does have a certain resonance – Sir David had bought a new house and was proudly inspecting the grounds when he came across some unusual looking plants growing in his garden which looked suspiciously like marijuana.
Somewhat startled, he consulted his next door neighbour who helpfully suggested it could be parsley.
A Botanist was called in to settle the matter. After inspecting the suspicious plants the Botanist said he didn’t know what the plants were either, but he did have a suggestion.
“Why don’t you pick it, dry it, then smoke it. And if you’re still worried about it, it is definitely parsley!”
Happily there is no mistaking the identity, role and purpose of the Foundation.
Congratulations to all those who have contributed to the first 25 years. May the passage to your half century be as replete with achievements as the first 25 years!
Thank you.