A new report from the Grattan Institute released yesterday claims Australians pay more than $500 million a year for prescription drugs, and urges changes to the way prices are set under the Pharmaceutical Benefits Scheme.
Titled Cutting a better drug deal, the report finds drug prices in Australia are twice as high as in the UK, and more than three times those in New Zealand.
"Australians on average pay five times the best international price for a group of seven commonly prescribed drugs," the report says, claiming the government is overpaying for generic drugs while other parts of PBS reform policy are "riddled with loopholes".
Grattan Institute spokesman Stephen Duckett called on the government to benchmark the prices of generic drugs in Australia against prices paid overseas - saving an estimated $93 million annually.
A further $445 million a year could be saved if the "therapeutic group premium policy" was strengthened and broadened to cover 18 therapeutic groups, similar to policy in Germany, he suggested.
"Australia is buying and pricing its drugs the wrong way...fixing this policy mess would give patients a better deal and improve the budget bottom line," he said.
HOWEVER the Pharmacy Guild said it "completely rejects" claims made in the report, describing it as "unbalanced and misleading".
"The report seems to be based on the assumption that the pharmaceutical supply chain in Australia is one that can be squeezed and squeezed, and will still keep on giving. This is not sustainable," the Guild said.
Price disclosure policy has resulted in significant savings to the government, said Guild executive director David Quilty.
"The report fails to recognise the deep impact that price disclosure has already had on community pharmacy in Australia," he said.
Assertions made in the report that pharmacy Location Rules are against the public interest were also rejected by the Guild, with Quilty saying they ensured Australians had a very high level of access to community pharmacies.
The Pharmaceutical Society of Australia said recommendations for further PBS cuts in the report were "cause for significant concern".
PSA national president Joe Demarte said accelerating price disclosure would impact the viability and future sustainability of the community pharmacy network.
It would also create downward pressure on wages, he said, which is the "number one issue for pharmacists right now".
Demarte said it was vital to diversify funding for pharmacy beyond the PBS, suggesting paying pharmacists through Medicare "would provide consumers with greater access to pharmacist services in a range of settings".
View the Grattan Institute Report at www.grattan.edu.au.
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