Australian drug plans face long-term change

Australia's Treasury Minister, Peter Costello has warned that the government needs to controls costs in the Pharmaceutical Benefits Scheme, or face drastic reform in the future. Mr Costello said: "if we're not vigilant, over 20 or 30 years the system we currently operate, which is a good system, could well break." Consumer prices rose in Australia 0.9% in the first quarter of the year, with major rises in drug prices a contributing factor.

In the long run, the Treasurer believes that reforms are inevitable, commenting: "I would be very, very surprised if the system that operates in relation to the PBS today is the system that's operating in Australia in 20 years time."

Mr Costello pointed to an aging population and the emergence of new drug treatments as pushing up the PBS bill. He noted that "new pharmaceuticals are being invented all the time and they're much more expensive. They can treat conditions we couldn't in the past."