Australian government urged not to make further cuts to PBS

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In the wake of historically the largest single price cuts to prescription medicines in Australia, both Medicines Australia and the Generic Medicines Industry Association of Australia (GMiA) are urging the government that further cuts to the Pharmaceutical Benefits Scheme (PBS) are not justified.

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On 1 April 2012, the prices of 75 medicines supplied through Australia’s PBS were reduced by an average minimum of 23%, saving the government an estimated AUS$1.9 billion (Euros 1.5 billion) over the next four years.

However, according to GMiA, despite the fact that these reforms come at a significant cost to the pharmaceutical industry, few patients will benefit from the price cuts. For example, those who need the most relief such as concessionary patients (80%) will pay the same co-payment (AUS$5.80) regardless of the price the medicines are sold to the pharmacist.

Medicines Australia Chief Executive, Dr Brendan Shaw, speaking at the Future of the PBS Conference in Sydney, Australia, told the government ‘in terms of this year’s upcoming budget and how the PBS will feature in that, our message is actually pretty simple–leave it alone.’

Dr Shaw added that ‘we fully expect there will be more price cuts from the memorandum of understanding (MoU) in the future over and above the AUS$1.9 billion savings projected by the government. The MoU between the government and Medicines Australia, which represents the discovery-driven pharmaceutical industry in Australia, supplying 86% of the medicines available through the PBS, outlines the price cuts to be made.

Dr Shaw added that ‘whatever measure you use, it is virtually impossible to make the case that the PBS is growing too much or, in fact, growing at all,’ and therefore ‘there is no need to have any PBS savings measures in the 2012 budget.’

Prices of generic medicines in Australia are high by international standards. Only time will tell if the price cuts introduced by the Australian Government will do anything to change this or whether this will do little more than offer mechanistic savings and fail to address market dynamics [1].

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Generic prices in Australia slashed


1.  GaBI Online - Generics and Biosimilars Initiative. Australia’s biggest-ever generics price cuts coming in April 2012 []. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Apr 23]. Available from:

Source: GMiA, Medicines Australia

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