Shaw slams generic claims
February 15, 2013
MEDICINES Australia Chief
Executive Dr Brendan Shaw has
come out on the attack over
proposals from a handful of generic
medicines companies for the
Pharmaceutical Benefits Scheme
which would preference generic
brands of medicines over others,
calling them “flawed”.
“These proposals argue that
substituting originator brands of
medicines for generic brands will
create savings for the PBS,” Shaw
said.
“That proposition is flawed on a
number of fronts,” he added.
According to Shaw flaws include
the fact that the proposition is
based “on the fallacy that generic
medicines are cheaper for the
Government than their branded
equivalents”.
“The reality is that the
Government pays exactly the same
price for branded medicines and
generic versions,” Shaw said.
“The Government won't save one
cent by protecting one group of
manufacturers over another group
of manufacturers,” he added.
Shaw also argued that
“protectionism is poor policy and a
poor way to run the PBS”, saying
that the philosophy is at odds with
the “market-based mechanism of
price disclosure that is delivering
taxpayers $1.9 billion in PBS
savings”.
Another issue, according to Shaw
is that showing preferance to a
generic over an originator
constrains prescribers and
consumers freedom, whilst the
proposal is also flawed because it
assumes that generics drive price
reductions, and that automatically
giving these companies market
share will provide savings.
“Good policy comes from
consultation and dialogue between
industry and Government, with a
long-term framework in mind,”
Shaw said.
“Half-baked ideas that come from
left field are not conducive to such
an agreed framework and risk not
delivering the savings they
promise,” he added.
Lastly, Shaw argued that there is
already a price signal for consumers
to choose a generic medicine over
a branded medicine where the
branded medicine has a higher
patient premium.
“Where there is no such
premium, as far as the consumer is
concerned there is no difference in
price between an originator brand
or a generic brand,” he said
“We have a choice.
“Either we can manage the PBS
through sensible, long-term
agreements negotiated with
industry to achieve a sustainable
PBS in the future that delivers for
consumers, government and
industry; or we can run the PBS
through a procession of ad-hoc,
un-costed, ill-thought through
policy and administrative thought
bubbles,” he added.
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