Australia has this month cut the prices of 492 drug brands by 12.5% or 16%, saving consumers around A$20 million a year, say ministers.
New moves to speed up the government's price disclosure policy begun in 2006 will save patients up to A$120 annually on the prices of some medicines supplied under the Pharmaceutical Benefits Scheme (PBS), and up to A$14.68 per prescription.
Price disclosure requires drugmakers to inform the government of the lower selling price which frequently results from competition for a PBS drug when its patent expires. The government then moves its level of subsidy in line with the average lower price.
The price disclosure cycle is being reduced from 18 months to 12 months, enabling savings of A$830 million over three years by reducing the gap between prices paid by pharmacists and the government for PBS-listed drugs.
The policy "is already expected to save patients up to A$1.6 billion over the next 10 years. With these additional price drops, savings to patients are expected to increase to more than A$2 billion over the next 10 years," said Health Minister Tanya Plibersek.
However, the research-based industry group Medicines Australia says it is “frankly extraordinary” that the changes have been introduced without consultation with the industry, which “has collaborated effectively with governments on PBS savings and improvements since the 2007 PBS reforms.”
"Price disclosure arrangements have always been subject to extensive consultation between government and industry to ensure that a viable industry is maintained and patients' access to medicines is not compromised," said Medicines Australia's chief executive Dr Brendan Shaw.
The Pharmacy Guild of Australia also said it had not been part of the deliberations leading to this decision and would be analysing the impact on pharmacies "as a matter of urgency." It warned the government to be "very careful" not to put at risk the viability of Australia’s network of pharmacies.
While the move will mean less profit for some pharmacy owners, “it is time Australian retail pharmacies accepted the reality of lower prices for medicines already applying in Britain, New Zealand and elsewhere," said Consumers Health Forum chief executive Carol Bennett.
Meantime, 16 new medicines have been added to the PBS, including new treatments for melanoma, breast cancer, prostate cancer and stroke. They represent an A$917.4 million investment and will help over 350,000 people each year, said Ms Plibersek.