The move comes as a result of a reform of the Pharmaceutical Benefits Scheme (PBS). In May 2015, the Australian Federal Parliament pledged to reform the PBS with its ‘Access and Sustainability’ Package of reforms. Included in the package were plans to cut costs in the production of most commonly prescribed drugs.

The introduction of the reformed PBS will see the prices of over 400 patent-protected medicines drop in price by up to 60%. The phased implementation started at the beginning of April 2016, when the cost of 60 common medicines fell in price to below the general AU$38.80 co-payment.

Drugs that have dropped in price include cancer drugs lenalidomide and dasatinib, adalimumab, a drug for Crohn’s disease, and the cardiovascular drug bosentan. The next round of price drops is expected in October 2016.

Health Minister Susan Ley commented that ‘This is not about [the] Government adding money into the PBS, it’s actually about consumers benefitting because the manufacturers of medicines are now being paid less.’

Part of the agreement was to adjust downwards the price of combination drugs, which were previously considered too highly priced. Therefore, people suffering from multiple medical conditions could save up to AU$500 a year.

Over AU$3 million has already been invested in adding new medicines to the PBS, with plans to continue adding new medicines.

Around 70% of pharmacists are also offering the government’s AU$1 discount for PBS medicines. This was introduced in January 2016 to stimulate price competition.

The move comes as good news for Australian patients, who have historically paid more for drugs than countries such as New Zealand and the UK. Although this has been put down to the fact that one in four medicines dispensed on the PBS are still the brand-name originator drug and that the level of utilization of generics in Australia is still much lower than in these countries [1].

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Reference
1. GaBI Online - Generics and Biosimilars Initiative. Australians pay too much for generics [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Apr 22]. Available from: www.gabionline.net/Generics/General/Australians-pay-too-much-for-generics

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