Immunisation Programmes Push Australia's Public Health Spend over US$2 bil. in FY 2007/08

The Australian Institute of Health and Welfare (AIHW) has published the latest report of its Health and Welfare Expenditure Series, Public health expenditure in Australia, 2007–08, which revealed that Australia's public health expenditure reached A$2.16 billion (US$2.01 billion), with a 21.5% year-on-year (y/y) increase, in fiscal year 2007/08, ended 30 June 2008. This represented A$101.61 per person in average expenditure, up by 19.4% compared with the previous year. The largest proportion of the public funding came from the Australian government, which contributed A$1.37 billion, 63.6% of the total expenditure, while state and territory governments spent A$786 million during the same period.

According to AIHW, the strong increase in public health spend can be largely attributed to the rise of expenditure on public immunisation programmes, which shot up by 61.5% y/y to A$704.3 million during this period. Among the organised immunisations, the National Human Papillomavirus (HPV) vaccination programme has played a big role in the expenditure increase with US$302.1 million spent on HPV vaccine purchases accounting for 53.1% of Australia's total expenditure increase in fiscal year (FY) 2007/08.

Outlook and Implications

The Australian government initiated the free human papillomavirus (HPV) "catch-up" vaccination programme in July 2007 for young women aged under 26 and the programme came to an end on 30 June 2009 for those out of school after a couple of extensions. It will be continuously provided on an ongoing basis to school girls by the government. The programme has significantly increased the government's health expenditure in FY 2007/08 and will also constitute a major part among the public health activities in FY 2008/09 which ended 30 June this year. However, the impact on public health spend increase of this programme will die off for the years to follow as the main part of this catch-up immunisation has been closed. Nevertheless, from the perspective of pharmaceutical companies, the programme has been a big revenue boost for U.S. drug giant Merck & Co, which provided Gardasil, the vaccine used for the immunisation programme. As of 30 June, there had been 5.3 million doses of Gardasil distributed in Australia. Challengingly for Merck, the sales of Gardasil are likely to see a significant decline with the closure of the public vaccination programme as well as the competition from another HPV vaccine marketed in Australia, GlaxoSmithKline's Cervarix (GSK, U.K.).