An economic forecasting microsimulation model of the Australian Pharmaceutical Benefits Scheme

In 2001 NATSEM was asked to develop a prototype model of Australia's Pharmaceutical Benefits Scheme (PBS) for the then Australian Pharmaceuticals Manufacturers' Association, now Medicines Australia, making use of a model built in the late 1990s for the then Department of Health and Family Services. Towards the end of that year, NATSEM was awarded an Australian Research Council Linkage Grant, with Medicines Australia as industry partner, to further improve the model and to develop within it the facility not only to forecast expenditures and estimate the distributional effect of the PBS, but also to quantify the health benefits of future pharmaceutical innovations. This technical paper documents the current status of the model (version 00-01) and serves as the starting point to examine features of the model that could be enhanced. It also provides the necessary reference for developing a facility within the model to quantify the benefits of improved health outcomes, which would represent a major advance in modelling the PBS