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PBS delivers savings but Govt told it could do better

17 Dec 2013

Patients could save up to $12.50 on the cost of one of Australia’s most commonly prescribed medicines under price changes announced by the Federal Government.

Health Minister Peter Dutton said that, from 1 December, the cost of 142 drugs used by more than 850,000 patients had been cut as a result of price disclosure rules introduced six years ago.

 Among those to experience a price drop will be users of the cholesterol-lowering medication Atorvastatin, who will save up to $12.50 per script. Those using the schizophrenia drug Olanzapine will save up to a $6.70 per prescription, while those taking the anti-depressant Venlafaxine will experience a price cut of up to $10.60.

Mr Dutton said the price drop of Atorvastatin alone would save patients up to $125 million over the next four years.

The Minister’s announcement came just before the release of Australian Prescriber figures showing statins were, collectively, the most commonly prescribed medication in Australia.

The report showed that more than 20 million prescriptions for Atorvastatin, Rosuvastatin and Simvastatin were filled through the Pharmaceutical Benefits Scheme in 2012-13.

The two most common types of statin cost taxpayers more than $715 million in subsidies, including $416 million for Atorvastatin, which has come off patent.

Other commonly prescribed medications included proton pump inhibitors and ACE inhibitors.

 The results have added fuel to concerns the PBS is becoming an increasingly unsustainable drain on the public purse: drug subsidies cost $9.2 billion in the year to June 2012.

Prominent health economist Professor Stephen Duckett claims the Government should be driving a much harder bargain with pharmaceutical companies, claiming that it could save more than $1 billion a year simply by paying the price governments in other countries, such as Britain and New Zealand, pay for the same medicines.

Professor Duckett said the price drop secured by the Government for Atorvastatin was not as dramatic as it seemed.

He said while a pack of 30 tablets had fallen from $30.69 to $19.32 in Australia, the same packet in the UK cost $2.84 and in New Zealand $2.01.

Under the price disclosure regime, pharmaceutical companies are required to reveal the prices they charge pharmacists, which are then adopted by the Government in what it will pay to manufacturers.

Industry claims that since the policy was introduced in 2007, it has achieved more than $5 billion in savings.

But Professor Duckett said the price benchmark should be set against what comparable countries pay, not prices within Australia’s highly regulated market.

However, Pharmacy Guild Director David Quilty, writing in The Australian, said PBS had in recent years been coming in under budget, marking the success of the price disclosure policy and undermining claims the system was unsustainable.

Mr Quilty said the real rate of growth in PBS expenditure was 2 per cent a year, even though the ageing population meant volumes were increasing by 6 per cent a year.

Peak pharmaceutical industry body Medicines Australia, in a submission to the Government’s Commission of Audit, said PBS spending as a proportion of gross domestic product was falling.

This showed, it said, that “a lot of the work to make the PBS financially secure in the long term has already been done”.

Adrian Rollins 

Published: 17 Dec 2013