On 16 November 2006, the Minister for Health and Ageing, Mr Tony Abbott, announced a shake-up of Australia’s pharmaceutical benefits scheme (PBS).
Three key reforms will begin on 1 August 2008. These reforms are intended to reduce the price to consumers of over 400 products currently subsidised on the PBS.
Of particular concern to pharmacists will be the changes to Government reimbursements on generic medicines.
Currently, generic manufacturers negotiate deals with pharmacists, offering attractive discounts and specials across a variety of therapeutic lines. Generic manufacturers are able to offer such discounts due to the fact that their research and development costs on medicines are reduced, having ‘piggy-backed’ an original drug manufacturer’s formulae, following patent expiry.
These discounts on generic medicines are often not fully translated in prices to consumers, in that concession card holders will pay $4.70 (the minimum patient co-payment), or a maximum of $29.50 for general patients.
These reforms allow the Government to pay less for certain generic medicines by forcing manufacturers to disclose the prices at which generic medicines are sold to pharmacists. By disclosing this, the Government will lower the amount it reimburses pharmacists, thus closing possible gaps between what pharmacists pay and the amount the Government reimburses them.
From August 2008, the Government will pay between 6 and 25% less for generic drugs, and from 2012, it will pay the price being offered to pharmacists.
However, the Pharmacy Guild of Australia has successfully lobbied the Government to pay $1.1 billion in subsidies to pharmacists over 4 years to help them adjust to the changes.
Pharmacists will receive 40 cents every time they use the Government’s online prescription checking program, a higher dispensing fee and $1.50 every time they dispense a drug that costs no more than the standard PBS price of $29.50.
For further information, please contact Damien Wurzel on + 61 3 9608 2288 or d.wurzel@cornwalls.com.au
