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A Healthy New Politics?

It’s obvious Australian politics is now conducted in a new and complex environment. And given that major policy implementation issues concerning health reform and the pharma sector were not settled prior to the election, the affect on industry of the new political environment remains unclear.

The act of governing is now obviously more difficult, with priorities subject to many competing interests. As the Financial Review recently commented ‘she [Julia] won power, but not the election’ and one misstep could have us back at the polls. But neither can the Prime Minister afford to be beholden to the opinion polls for decision making. This poll reliance was arguably one of the major reasons for the Government’s poor election showing.

Bills and budgets

The Government, however, must assume it will be in power for the next three years. In addition to the urgent passage of some contentious legislation (including a number of health-related bills), it needs to begin framing next year’s Budget. And it must do this constrained by a promise to increase spending in real terms by no more than two per cent annually, and to return to surplus by 2012-13.

There are a number of pressing areas of additional expenditure, including the implementation of health reform, the National Broadband Network, environmental initiatives and regional development.

This will increase the pressure on the Government to find offsetting income (alas the minerals tax) or to make savings (PBS reform), as highlighted by Treasury and Finance in their ‘advice’ for the incoming Government.

Roxon rocks on

Minister Roxon’s re-appointment provides welcome continuity for the health sector. There was general recognition that she was a successful Minister in the Government’s first term; her portfolio was large and difficult, with pressing policy issues, and was also subject to considerable Prime Ministerial ‘interference’.

Roxon said she is ‘pleased and honoured to continue to lead the Government’s ambitious health reform agenda to deliver better health services for all Australians’. Prime Minister Gillard will provide Minister Roxon with considerably ‘more space’ as Minister, and hopefully we will now be spared the endless photo opportunities of a PM visiting a hospital, and that all patients can now rest easily.

The Health Department has lost responsibility for Sport (to the Prime Minister), which is a possible backward step when considering the need for a co-coordinated approach to the ‘obesity epidemic’, while mental health was given a greater priority. Mark Butler was appointed to the new Ministry of Mental Health and Ageing, and Catherine King is the new Parliamentary Secretary for Health.

Peter Dutton retains his position as Opposition Spokesperson for Health after easily winning what was expected to be a close call in Dickson. He has struggled to cut-through at times, but is likely to have plenty of opportunities for criticism as the Government attempts to implement its health reform package. Dutton, it should be noted, has been highly accessible to the pharma industry.

MOU anyone?

The Health portfolio’s focus has changed from policy development to implementation. This can involve quite a different skill, particularly in the area of negotiations. In regard to these changes, Minister Roxon has commented that her focus will be:

  • the better delivery of health services through improved GP clinics;
  • modernised hospitals;
  • an expanded medical and nursing workforce;
  • better after hours services; and
  • unleashing the benefits of e-health and telemedicine.

One major hangover from the last term is the failure of the Commonwealth and WA to reach agreement around the latter’s participation in hospital reforms. There remains no indication that WA is prepared to trade off 30 per cent of its GST revenue for increased health funding.

Pharma’s absence from Health priorities confirms the confidence the Government has in the PBAC process, and that the PBS is expected to be a source of savings to fund reforms. Pharma’s priority will be to ensure passage of the Bill enacting the $1.8b PBS saving reforms. The date for the commencement of the MOU has already passed, although the relevant Bill was one of the first on the new Parliament’s list, entered in late September.

The Government is, however, showing its best intentions. Work is underway to streamline the TGA and PBAC processes and to implement the changes that it agreed in principle with industry. Whilst Medicines Australia has ‘urged all political parties to support the Bill and ensure its enactment at the earliest opportunity’ the GMIA still opposes it.

Certainty needed

The Opposition’s position on PBS reforms is unclear. During the election campaign it spoke of agreeing to the reforms, dependent on Parliamentary committee inquiry findings (the Committee, however, closed down when the election was called and didn’t report).

It would appear that Tony Abbott and the Coalition are taking an aggressive approach towards Parliament so, to add funding pressures to the Government, it is possible they will be ‘difficult’ on the Bills’ passage.

From an industry perspective the best outcome would be swift passage of the Bills. This would give immediate effect to PBS savings and provide the desired business certainty, while removing the risk of industry becoming a political casualty.

This entry was posted in Life Sciences Industry.
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