Australians pay almost six times as much for medicine than their Kiwi counterparts. This reality has been a cause of strife between big pharma, the government, taxpayers and pharmacy bodies for years now. Recent announcements by the Turnbull government to address longstanding barriers to affordable medicine has offered an olive branch to consumers who feel hard done by the cost of medicine.
The Pharmaceutical Benefits Scheme (PBS) currently costs the Australian government $11 billion annually, twice as much as in 2009. This significant difference is due to an increase in medicines covered by the scheme, particularly, very expensive biological, immunotherapy, cancer and Hepatitis C medications.
2012 also saw the biggest reduction in medicine costs with then Health Minister, Sussan Ley, introducing widespread reductions in costs for some of the most expensive patent drugs on the market. The current government’s further encouragement of the use of generic drugs has also helped to open the market somewhat.
Encouraging developments underpinned by entrenched challenges
Government’s recent moves to reduce the cost of drugs can be considered a good start, but much more can be done to improve accessibility to the right medicines for all Australians. A report by PwC found that many pharmacists feel frustrated by Pharmaceutical Benefits Advisory Committee (PBAC) reimbursement processes which they describe as outdated and slow in its approval mechanisms.
Other pain points include high levels of bureaucracy and a lack of transparency with regard to how drugs are actually priced. A 2014 report on the reimbursements for cancer drug treatment found that Australia was not only slow to respond in availing life-saving drugs compared to other countries, but was also significantly more expensive.
With the sustainability of the PBS program coming under close scrutiny, it seems now would be the time to continue the drive toward a more innovative and modernised approach to medicine in Australia. John Cannon, PwC Health Leader puts it this way, “It is incumbent on all stakeholders to find ways to work together, to bring forward access to new drugs when appropriate, to reduce costs when and where appropriate, and to ensure a viable and sustainable industry in which taxpayers and patients have a say.”
Medicines Partnership Australia (MPA) was careful in its optimism about the government’s recent moves toward more affordable medicine, “While there is substantial provision for more to be done, Minister Hunt has responded to pertinent issues around the stability and sustainability of the supply chain, patient access to medicines and certainty for the innovative medicines industry”
While it appears that the government shares much of pharmacists’ frustration with the way the industry moves, it seems stuck in a cycle of under-regulating the right areas while overburdening critical processes with red tape.
The forecast the Australian pharmacist: tentative
Recent announcements may encourage a more positive outlook for health consumers, yet it’s fairly clear that the PBS, and health care system as a whole needs to address some longstanding procedural, cultural and regulatory practices that are now doing more harm than good.
In comparison to many other developed countries in the world, Australians are still paying considerably more for everyday and more specialised drugs. Just across the pond, New Zealanders pay a third (UK citizens pay half) of what Australians do for their medicine. Some ascribe this to the fact that the government still pays pharmaceutical companies non-generic prices for drugs that are no longer under patent. According to the Grattan Institute, “The government should benchmark the prices of generic drugs in Australia against prices paid overseas. This would save $93 million a year and cut the price of 16 commonly prescribed drugs in Australia by an average of $6.43 per pack.”
Ongoing efforts to reduce the cost of medicine to the average Australian are encouraging, albeit in light of certain overarching and longstanding barriers to more affordable medicine. The coming years will be a good barometer to the sincerity of government to support pharmacists and consumers alike, but for now, a tentative sigh of relief seems in order.