Medicine costs drop as pricing process speeds up
Patients are expected to save millions of dollars on the cost of prescription medicines after the Federal Government moved to speed up the price disclosure process.
The Government has declared it will cut the time taken to bring the cost of off-patent medicines in line with market prices from 18 to 12 months, saving taxpayers $835 million over four years and giving patients quicker access to cheaper medicines.
The change has been met with outrage from pharmacists, with the
Pharmacy Guild claiming the change will put 5000 jobs in the sector at risk.
But the Government shows no inclination to back down from the reform, which will save it hundreds of millions of dollars and speed up the flow of cheaper medicines to patients.
The move came just days after Health Minister Tanya Plibersek announced patients would save up to almost $15 a time on the cost of hundreds of medicines under its price disclosure arrangements with pharmaceutical companies.
Ms Plibersek said the Commonwealth would save around $20 million a year on subsidies for 492 brands of medicine listed on the Pharmaceutical Benefits Scheme after negotiating reduced prices for drugs that have come off patent.
She said the price cuts would also flow through to patients, who would face substantially lower out-of-pocket expenses at the chemist.
Among the price falls is a $14.68 plunge in the cost of the antibiotic Ceftriaxone, a $10.43 drop in the price of cholesterol-lowering medication Simvastatin and a $3.64 dip in the cost of the anti-depression pill Sertraline.
Under the price disclosure regime, which came into effect in 2007, manufacturers of publicly subsidised medications that come off patent are required to disclose the reduced price they are offering the market.
The Government then brings the public subsidy for the drug in line with the average lower price.
But the system has been heavily criticised for still saddling taxpayers and patients with excessively high prescription medicine costs.
The Grattan Institute think tank earlier this year claimed that Australia is paying $1.3 billion a year too much for drugs listed on the PBS because of poor pricing deals with manufacturers.
The focus of much concern is the cost of one of the most widely prescribed drugs, the cholesterol-lowering medication Atorvastatin, sold under the brand Lipitor.
University of Melbourne health economist Professor Philip Clarke told The Age 180,000 patients taking Lipitor were paying $170 a year more than they should if price cuts recommended by an expert advisory panel were implemented.
Professor Clarke said there should be a cut in the price of Atorvastatin similar to the 44 per cent price drop for another cholesterol medication, Simvastatin.
But the Federal Government rejected the criticism, arguing it had already negotiated a 41 per cent price drop for Atorvastatin in April last year.
Mr Plibersek said the price disclosure regime was set to save taxpayers more than $2 billion in the next 10 years.
The Minister added that 16 medicines, including treatments for melanoma, breast cancer, prostate cancer and stroke had been added to the PBS at a cost of almost $918 million, and would benefit 350,000 patients each year.