Drug pricing report shows scope for more savings

The savings to the taxpayer in reducing the cost to Government of prescribed pharmaceuticals has been one of the success stories in health economics in Australia in recent years, yet experts say even more savings may be possible through changes to drug pricing policy, the Consumers Health Forum said today.

Responding to a new report from the Grattan Institute, Cutting a better drug deal, the CEO of the Consumers Health Forum, Leanne Wells, said the report’s findings are a timely contribution to future thinking on medicines policy and highlight the value of ongoing scrutiny and review of pricing policy.

“Like the report authors, CHF acknowledges that any further reform of retail pharmacy would need to be carefully managed so as to not jeopardise a sustainable community pharmacy sector and the system’s capability to ensure the availability of innovative medicines.  

“If further savings can be realised from the price Australia pays for prescription medicines, this is good news for consumers. The prospect of savings that can deliver new and better drugs as well as make a contribution to the costs of other important health care reforms like patient-centred health care homes getting off the ground is compelling.  We would encourage the Government to give these recommendations  serious consideration.

“Australia has gained to the tune of billions of dollars from the gradual introduction of measures that ensured this country benefited from the world-wide fall in pharmaceutical prices resulting from the increased number of inexpensive generic drugs,” Ms Wells said.

“At a time when the Federal Government is under heavy pressure to ensure that Medicare can provide access to basic health care, if there are significant savings which can be made in pharmaceuticals than those savings would help meet the cost of reversing such budget cuts as the Medicare benefits freeze.

“The Grattan report, authored by Professor Stephen Duckett, indicates there is scope for drug pricing to generate more savings by better reflecting international prices through benchmarking.

“It also proposes reforms to the so-called therapeutic group premium system which would create savings of more than $445 million a year.  The current system pays premiums for small changes to medicines and this can mean loop holes in the way the system operates generating higher costs to the taxpayer. 

“Consumers want value for money and the push for new innovative medicines to be on the PBS means we have to ensure we get value for money.

“We want to encourage pharmaceutical manufacturers to produce innovative therapies rather than just tweaking existing therapies,” Ms Wells said.

“As we await the release of the draft report of the Independent Panel Reviewing Pharmacy Remuneration and Regulation, the report also contains suggestions about how greater competition in retail pharmacy could deliver further savings for consumers.

Overall we want a responsive, high value pharmacy sector which  should be open to future arrangements whereby competition is stimulated such that the clinical skills of pharmacists and the role of the community pharmacy is more central and integrated to primary health care.

“We support reform of location and ownership regulations but note the need for careful implementation to allow for industry adjustment.”

ENDS

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