Suggestions made in the Grattan Institute report, Australia’s Bad Drug Deal, would lead to bad health outcomes for Australians, a leading industry body says.
The chief executive of Medicines Australia Dr Brendan Shaw said the report was one sided.
“It only looks at the cost curve, and I can tell you from the New Zealand experience that by doing that you run the risk of having a whole lot of bad health outcomes for the Australian community.”
Federal health minister Tanya Plibersek was also critical of the report.
In a press conference outside Parliament House today she said the government had already saved $1.2 billion dollars from price cuts to generic medicines, and more savings were on the way.
“We’ll save around $9 billion between 2010 and 2015 on the basis that generics will drop in price and because we’ve made price changes to high volume drugs.”
See where savings are being made in the Pharmaceutical Benefits Scheme (PBS) here.
While the report was “very interesting”, Ms Plibersek said you cannot “pick and choose” elements of other countries’ systems and expect it to create a better system` in Australia.
For the health minister New Zealand gets good prices for generic medicines at the cost of patient choice.
Medicines Australia was particularly critical of a capped budget recommended in the report.
“New Zealand has a capped budget and what that means is they have to sometimes delay the listing of medicines,” Dr Shaw said.
“We often hear stories of the problems that have occurred in New Zealand, only having one brand and not having enough treatment options for patients.”
For Dr Shaw the Australian system has the right balance between cost-cutting generic medicines and ensuring Australians can access new medicines in the future.
Grattan Institute responds
Author of the report, Stephen Duckett, deflected the criticism.
“We’re not suggesting you take every aspect of the New Zealand system and implement it willy nilly in Australia,” Mr Duckett said.
“We’re suggesting taking the best aspects out of New Zealand and importing those into Australia.”
Mr Duckett’s report makes four key recommendations to the government:
- Set up an independent body, like the Reserve Bank, to manage pharmaceutical pricing.
- Create a capped budget, encouraging tougher price negotiations.
- Require an initial price cut of at least 50 per cent for unpatented drugs.
- Encourage people to use cheaper drug alternatives.
Do Medicines Australia have a point or are they just protecting their members interests?
Hear Dr Brendan Shaw‘s full interview to make up your own mind.
