Measuring the Progressivity of the Pharmaceutical Benefits Scheme

Through the Pharmaceutical Benefits Scheme, the Australian Government subsidises the cost of a large range of medicines. This study assesses the income‐related distribution of Pharmaceutical Benefits Scheme resources using patient‐level data from Medicare Australia and concentration indices. We find...

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Bibliographic Details
Published in:Australian economic review 2015-06, Vol.48 (2), p.122-132
Main Authors: Knott, Rachel J., Clarke, Philip M., Heeley, Emma L., Chalmers, John P.
Format: Article
Language:English
Subjects:
Accounting
Appropriations and expenditures
Australia
Benefits
Cost
Data analysis
Drug formularies
Drugs
Government spending
Government subsidies
Income
Income distribution
Low income groups
Medicare
Medicine
Pharmaceutical industry
Pharmaceuticals
Public expenditure
Studies
Subsidies
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Summary:Through the Pharmaceutical Benefits Scheme, the Australian Government subsidises the cost of a large range of medicines. This study assesses the income‐related distribution of Pharmaceutical Benefits Scheme resources using patient‐level data from Medicare Australia and concentration indices. We find that use of, and government expenditure for, Pharmaceutical Benefits Scheme‐subsidised drugs is progressive in that more resources flow to lower income groups, even after adjusting for differences in medical need, as measured by age, sex, self‐assessed health and clinically assessed comorbidities. Of the major drug classes, cardiovascular drugs contributed substantially to the overall progressivity of Pharmaceutical Benefits Scheme subsidies, accounting for almost 50 per cent.
ISSN:0004-9018
1467-8462
DOI:10.1111/1467-8462.12103