Australian price cuts make PBS affordable

Home/Policies & Legislation | Posted 11/04/2014 post-comment0 Post your comment

The price cuts for 121 medicines supplied through Australia’s Pharmaceutical Benefits Scheme (PBS) have made the PBS sustainable, according to Medicines Australia, a group that represents originator manufacturers.

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The group, however, is urging the government not to introduce any further PBS-saving measures in its forthcoming budget. To defend this position Medicines Australia points to the fact that the price cuts, which came into force on 1 April 2014, are estimated ‘will save taxpayers at least another AU$1.5 billion over the next four years, providing ample scope for the PBS to fund new and innovative treatments as they become available’. Further evidence of the fact that there is no longer a need for further price cuts has been provided from major reports from three separate government agencies, which ‘have confirmed that PBS expenditure is contained and that price disclosure is delivering savings far in excess of what was expected’.

The group also insists that ‘the Australian medicines industry needs predictability and stability in policy so that Australians can get the latest safe, effective and cost-effective treatments’. They add that ‘government expenditure on the PBS actually declined’ during 2013, ‘in contrast to the rest of the health system’, and ‘industry experts predict it to fall again’ during 2014.

The generics industry has also called on the Australian Government to ‘think’ before introducing further ‘unforecasted and unplanned savings’ via PBS price cuts. The Generic Medicines Industry Association (GMiA), which represents generics suppliers in Australia, has warned that such actions could cause ‘irreversible damage’ to the Australian generics industry.

Although, Australia has historically paid more for drugs than countries such as New Zealand and the UK, this has been put down to the fact that one in four medicines dispensed on the PBS are still the brand-name originator drug and that the level of utilization of generics in Australia is still much lower than in these countries [1].

From 1 April 2014, the price of chemotherapy drug docetaxel in Australia will be reduced by 90% and high cholesterol treatment simvastatin by a further 40%.

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1. GaBI Online - Generics and Biosimilars Initiative. Australians pay too much for generics []. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Apr 11]. Available from:

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Source: GMiA, Medicines Australia

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