PBS beats benchmarking?
December 18, 2013
The new PBS price disclosure
reductions (PD yesterday) showed
the government would pay millions
more for cancer medication under
the Grattan Institute’s proposed
‘benchmarking’ pricing model,
Medicines Australia chief executive
Dr Brendan Shaw says.
The April 2014 price reductions
saw chemotherapy drug docetaxel
costing 90% less and reductions for
more than 120 other medicines.
The Grattan Institute released
a study earlier this year which
said that if the govt benchmarked
generic drug prices against those in
other countries, it could save over
$1 billion annually (PD 18 Mar).
The report shows that on average
Australian prices remained almost
16 times higher than those in New
Zealand and in the UK.
However Dr Shaw countered that
under the Australian PBS, the prices
of many medicines were being
pushed below those of overseas
markets.
“The fact is if Australia used the
pricing model recommended by
the Grattan Institute, the Australian
Government would be paying much
more for medicines.”
Dr Shaw said the now much
cheaper docetaxel would cost $6.89
for 20mg, compared with $275 in
the UK.
He also added that some of the
medicines used in the Grattan
Institute’s report now had
Australian prices below those of
international benchmarks, with
blood pressure medications ramipril
and amlodipine now cheaper in
Australia than in Canada.
“It’s galling,” he continued, “that
while the Australian industry is
copping massive price reductions
that have pushed prices below
international benchmarks and led to
job losses, we have commentators
arguing prices are too high.”
HOWEVER Grattan Institute
health program director Stephen
Duckett said Medicines Australia
was not focusing on the main
game.
“It would be amazing if Australia’s
prices were never better than other
countries’ for any drugs out of the
hundreds on the PBS.
“Of the 70+ drugs we compared
in our first report, Australia was
cheapest in five cases, but getting a
terrible deal overall.”
Dr Duckett said this underscored
the importance of the government
undertaking regular benchmarking
for all drugs against a range of
countries and publishing the results.
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