Australia's Bad Drug Deal : High Pharmaceutical Prices

Stephen Duckett et al at the Grattan Institute have prepared this report "Australia's bad drug deal : high pharmaceutical prices". Australians are paying too much for prescription drugs. The cost of this overpayment is at least $1.3 billion a year, or $3.5 million a day. This equates to 14 per cent of the entire Pharmaceutical Benefits Scheme (PBS) budget. In a time of escalating health costs and other strains on the Commonwealth Budget, spending on pharmaceuticals could be reduced relatively easily, if there is the political will to do so.

This report proposes three changes to get pharmaceutical prices under control. The first is to establish a truly independent expert board. Like New Zealand’s Pharmaceutical Management Agency, it would manage pharmaceutical pricing within a defined budget. The second and vital change is to pay far less for generic drugs, which can be bought for low prices because they are off-patent.Down the line, a third reform should encourage people to use cheaper but similar pharmaceuticals, which could save at least $550 million a year more. The pricing agreement between the Government and drug companies expires in the middle of next year. Now is the time to make changes that will end Australia’s bad drug deal. (APO 17/3/13)