If Australia had paid English prices for the generic cholesterol-lowerer simvastatin during May 2010-October 2011, its Pharmaceutical Benefits Scheme (PBS) spending could have been reduced from A$150 million to just A$20 million, says a leading health economist.

Australia's "price disclosure" policy - agreed as part of the government/research-based industry Memorandum of Understanding (MoU) to reduce the prices of older PBS-listed drugs by requiring drugmakers to reveal to the government the actual price at which they sell their products to pharmacies - does reduce future prices, according to Professor Philip Clarke of the University of Melbourne, writing this week in the Medical Journal of Australia.

However, he adds, this is a slow mechanism, taking up to 18 months or more to produce savings for the PBS, and these will not be sufficient to bring the cost of high-volume generics such as simvastatin and atorvastatin in line with prices overseas.

After the patent expires on Pfizer's Lipitor (atorvastatin) this May, the supply price of 40mg of the generic version in Australia will be around A$50 per prescription, compared with A$16 in Canada and A$5 in New Zealand, he notes. "If Australians paid New Zealand prices, and assuming current levels of prescribing remained the same, savings in the order of A$590 million would be attained in the first 18 months after patent expiry," says Prof Clarke.

Another problem is the relatively low level of prescribing of these generic statins in Australia, where they accounted for just 22% of the total last year compared with more than 50% in the US and over 75% in England, says Prof Clarke. "It is surprising that there is little published economic evidence on whether the much greater use of higher-cost patented statins in Australia represents a cost-effective use of PBS funds," he adds.

His study has been welcomed by Australia's Generics Medicines Industry Association (GMiA), which points out that Australian patients are not being incentivised to choose generic versions of original branded medicines because they cost the same across the pharmacy counter. This is not up to individual community pharmacists but related to the absence of a government price signal to patients, says GMiA chief executive Kate Lynch.

"We believe patients should be financially rewarded for opting for a generic medicine which is exactly the same in quality as a branded version yet a much better bet for the economy," she said.

Meantime, nine prescription drugs have been newly listed on the PBS this week. They are: - AstraZeneca’s Brilinta (ticagrelor) for acute coronary syndrome; - GlaxoSmithKline (GSK)'s antibiotic Zinnat (cefuroxime axetil); - Bristol-Myers Squibb (BM-S)'s Sprycel (dasatinib) and Novartis' Tasigna (nilotinib), both for chronic myeloid leukaemia; - Pfizer's anticoagulant Fragmin (dalteparin sodium); - GSK's Flolan (epoprestenol sodium) for pulmonary arterial hypertension; - GKS's pain management drug Kapanol (morphine sulphate); - Roche's Actemra (tociluzumab) for juvenile arthritis;  and - BM-S' Orencia (abatacept) for rheumatoid arthritis.

The listings have been welcomed by Dr Brendan Shaw, chief executive of the research-based industry association Medicines Australia, who said they will "provide patients with affordable access to cost-effective medicines."

However, he criticised the fact that Boehinger Ingelheim's anti-stroke treatment Pradaxa (dabigatran) is having to go through "another unanticipated hurdle - the anticoagulant review process" before it can be listed.

Pradaxa has already "gone through the Therapeutics Goods Administration [TGA] process, the Pharmaceutical Benefits Advisory Committee [PBAC] process, the Pharmaceutical Benefits Pricing Authority [PBPA] process and the Cabinet process," said Dr Shaw, adding: "I urge the government to conduct this review as quickly as possible, given Pradaxa was first considered by Cabinet in September 2010."