Medicine cost rise dumped

BUDGET plans to increase the $5.40 patient charge for subsidised prescription medicine have been quashed.

BUDGET plans to increase the $5.40 patient charge for subsidised prescription medicine have been quashed as the government tries to minimise the impact of budget nasties on voters' hip pockets.

There has been intense speculation the government planned to increase the patient co-payment for medicines to raise several hundred million dollars as it strives to get the budget back into balance by 2013.

The Australian has learnt the proposal was quashed because of fears it could spark a voter backlash and lead pensioners to stop their medication.

With Cyclone Yasi and the Queensland floods fuelling a surge in inflation and a proposal for a carbon tax that could increase power bills, the government would have faced political difficulties defending yet another hit on voters.

Pensioners pay $5.40 a script for subsidised medicines while other consumers pay up to $34.20. A $1 increase in both co-payments would have saved the government about $170 million.

But raising prescription charges can have consequences elsewhere, increasing hospitalisations and doctors visits as patients unable to afford the price rise stop using their drugs.

When the Howard government imposed a 24 per cent increase in medicine charges for pensioners in 2005, the use of some essential medicines fell by 11 per cent.

Anna Hynd, of the University of Western Australia's School of Population Health, found in 2008 that the price hike resulted in decreased use because pensioners could no longer afford medicines.

The opposition claimed yesterday that Labor's election promise to reimburse veterans may also have been in jeopardy if it increased pharmaceutical charges in the budget.