Healthy Skepticism Library item: 10292

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Hart C.
PBS reforms 'will drive up drug costs'
The Australian 2007 May 31
http://www.theaustralian.news.com.au/story/0,20867,21827133-23289,00.html

Full text:

REFORMS to the Government’s Pharmaceutical Benefits Scheme that will protect niche medicines while exposing others to more competion could drive up over-the-counter drug prices for consumers, Labor and health advocates warned today.
The complex reforms, announced by the Government last November, are designed to ensure access to new and expensive medicine whilst keeping the PBS on an economically sustainable footing.

Health Minister Tony Abbott has said the changes, which aim to bring down the price of generics and highly competitive drugs to create “headroom” for new and innovative drugs, will save $3billion over the next 10 years.

One of the key changes is the creation of two separate lists of medicines on the PBS: one that protects unique medicines, and one that exposes competitive medicines to market forces.

Formulary One (F1) drugs will include about 450 new, innovative or niche medicines medicines.

Formulary Two (F2), which will include generics, off-patent drugs and different versions of older drugs, will be subject to mandatory price reductions and will move to a system of price disclosure where the price the Government pays will reflect more closely the actual price the medicine is being sold to the market for.

Opposition health spokeswoman Nicola Roxon today described the changes in The National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2007 PBS as “some of the most significant” changes since Labor created the PBS.

Despite offering general support for the changes, Ms Roxon said Labor reserved its right to move amendments to the bill in the Senate, particularly regarding concerns it lacked protection for consumers.

“Labor support obtaining lower and more realistic prices for generics and rewarding innovation but we have some fears about the unintended consequences of these reforms which may put more financial pressure on consumers,” Ms Roxon said.

Ms Roxon also questioned the Government’s claim that the changes would deliver $3billion in savings over 10 years.

“Labor is concerned that the Government is hiding behind the general idea of savings without explaining that the savings are to the Government and not to the consumers,” she said.

Australian Health Care Reform Alliance chair Kerren Clark said that the bill had been introduced with “unseemly haste” and was flawed.

“Delinking so-called innovative pharmaceutical from generic pharmaceuticals will lead to higher costs for the community,” she said.

“There’s no tangible benefit to the community to this change and its just going to cost us more for new drugs.”

A spokeswoman for Mr Abbott said claims that prices for consumers could rise had “no basis in fact”.