No PBS reform needed?
December 21, 2011
THE latest price cuts to medicines
on the Pharmaceutical Benefits
Scheme, coupled with future price
disclosure related cuts and the
current low growth rate of
expenditure removes the case for
further PBS reform, according to
Medicines Australia.
The price cuts follow this month’s
Mid-Year Economic and Fiscal
Outlook which forecast lower than
expected PBS spending of around
$1.8 billion.
The new round of market-based
price cuts, part of the 2010
Memorandum of Understanding
with Medicines Australia, will
deliver an average price reduction
for off-patent medicines of 23 per
cent on 1 April 2012.
Speaking about the cuts
Medicines Australia CE Dr Brendan
Shaw said “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”.
“But we have agreed to these
reductions because Medicines
Australia member companies
recognise the importance of
keeping the PBS sustainable.
“This creates the financial
headroom that allows the
Government to bring the latest
medicines on to the PBS whilst
keeping expenditure under
control,” he added.
Shaw also said the cuts were
“good news” for patients because
as well as providing financial
headroom for listing new medicines
the 01 April price reductions should
lead to price drops on medicines for
patients as well as the Government.
Speaking about the system of
mandatory price disclosure Shaw
said it requires companies to
disclose the discounted price at
which they are selling medicines in
the market, allowing Government
to adjust the price it pays to the
price the medicine commands in a
competitive market place.
MEANWHILE Medicines Australia
also announced the retirement of
its Chairman, Will Delaat from
February 2012.
Delaat has served on the board of
Medicines Australia since 1998 and
has been chairman since 2008.
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