PBS Price Cuts4 April 2012
A new round of price cuts for off-patent medicines on the Pharmaceutical Benefits Scheme, which comes into effect from 1 April 2012, will ensure PBS savings of at least $1.9 billion for the Government.
This means that the price of 74 commonly used off-patent medicines on the PBS will be reduced by between 10% and 82%. These cuts are over and above a 16% price reduction that has already been applied to many off-patent medicines.
Medicines Australia chief executive Dr Brendan Shaw said the system of mandatory price disclosure, will drive savings through a competitive off patent market and ensure the long-term sustainability of the PBS.
“These types of price reductions which capitalise on market competition provide the Government with the financial headroom to list new medicines whilst ensuring the PBS remains sustainable in the future,” Dr Shaw said.
“The system requires manufacturers to disclose the actual price at which they are selling medicines in the market, allowing Government to adjust the price it pays.
The savings will mean a better deal for consumers/patients and a more sustainable PBS.
“At the same time, it is important to note that these price reductions will cause significant commercial difficulty for many of the companies taking substantial cuts”.
“Some companies have taken price cuts of more than 70% for a single medicine, and absorbing reductions of that magnitude is obviously challenging”.