A welcome drug price drop
April 2, 2012
THE latest round of price cuts for
off patent medicines on the
Pharmaceutical Benefits Scheme,
which came into effect yesterday,
have been welcomed by Medicines
Australia, which said that there
should be more such reductions in
the future as more drugs go offpatent
and become subject to price
disclosure.
The price cuts mean that as of 01
April, 74 commonly used off-patent
medicines on the PBS have had
their price reduced by between
10% and 82%.
“These types of price reductions
which capitalise on market
competition provide the
Government with the financial
headroom to list new medicines
whilst ensuring the PBS remains
sustainable in the future,” said
Medicines Australia, Chief
Executive, Dr Brendan Shaw.
Shaw also said that the system of
mandatory price reduction will
drive savings through a competitive
off patent market.
“The system requires
manufacturers to disclose the
actual price at which they are
selling medicines in the market,
allowing Government to adjust the
price it pays.
“These are enormous savings but
effectively they will mean a better
deal for taxpayers and a more
sustainable PBS,” he said.
According to Shaw, these savings
will continue as more drugs come
off-patent and are subject to price
disclosure, which will put further
downward pressure on growth and
negate the argument for further
reform.
Whilst welcoming the change,
Shaw did spare a thought for
companies taking “substantial
cuts”, saying that “it is important to
note that these price reductions
will cause significant commercial
difficulty for many of the
companies”.
“Some companies have taken
price cuts of more than 70 per cent
for a single medicine, and
absorbing reductions of that
magnitude is obviously
challenging,” he said.
“But the MoU will ensure a stable
business environment for
manufacturers because it carries a
Government commitment that
industry will not be asked to bear
any further price-related savings
measures before 2014,” he added.
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