Discount rates reflect how society values future outcomes compared to present outcomes. When applied to medicines, inappropriately high discount rates disadvantage treatments which have longer term health benefits, such as preventative or curative treatments, disproportionately discriminating against patients who could benefit from treatments where the benefits are realised over a longer period of time.
As an advanced economy which prides itself on its population’s health, Australia must consider the value of the future long-term health of its citizens, especially its children. The COVID-19 pandemic has demonstrated the value of preventative therapies and the critical importance of thinking of the long term.
As advances in science and medical technology unlock new ways to correct or reverse diseases, potentially altering disease courses from certain death to a longer, healthy life, Australians risk missing out.
It is time to invest in health policies that match this need for longer-term health outcomes.
The 2022 to 2027 Strategic Agreement between Medicines Australia and the Commonwealth
Government commits to reviewing the Pharmaceutical Benefits Advisory Committee (PBAC) base case discount rate against international health technology assessment (HTA) best practice.
This paper recommends a reduction in the base case discount rate from 5% to 1.5%, based on a review of international HTA discount rate practice, the impact of high discount rates on access to medicines, and government policies which stress the importance of long-term health, such as Australia’s LongTerm National Health Plan.