[Pharm-policy] Australian pharmaceutical prices relative to other countries: major report
Melissa Raven
melissa.raven@flinders.edu.au
Sat Jul 21 02:11:01 2001
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Australia's Productivity Commission has released a report on Australian =
pharmaceutical prices relative to prices in seven other countries: the =
US, Canada, the UK, France, Spain, Sweden and New Zealand. The report =
focuses on the prices that manufacturers receive for 150 pharmaceuticals =
under Australia's Pharmaceutical Benefits Scheme. The report, =
International Pharmaceutical Price Differences, was released on 20 July =
2001. It is available online (as well as hardcopy):
http://www.pc.gov.au/research/commres/pbsprices/finalreport/pbsprices.pdf=
The report lists the key messages as:
=B7 The pricing of pharmaceuticals listed on the =
Pharmaceutical Benefits Scheme (PBS) is an important issue for =
Australia. Between 1992-93 and 1999-2000, government spending on =
pharmaceuticals rose from under 12 per cent of public expenditure on =
health to over 15 per cent. In 2000-01, the cost to the Commonwealth =
Government of the PBS increased by around 20 per cent, to over $4 =
billion.
=B7 This study examines differences between =
manufacturer prices in Australia and seven other countries for 150 =
PBS-listed pharmaceuticals, as at 30 June 2000. These items account for =
over 80 per cent of total expenditure on PBS-listed pharmaceuticals.
=B7 The bilateral comparisons show that manufacturer =
prices in Australia for the top 150 pharmaceuticals are much lower than =
in the United States, Canada, the United Kingdom and Sweden. Prices in =
Australia are closer to those in France, and about the same as those in =
Spain and New Zealand.
=B7 The price differences vary across different =
categories of pharmaceuticals. Prices for new innovative pharmaceuticals =
are much closer to those in the other countries. The largest price =
differences are observed for 'me-too' pharmaceuticals and they are also =
significant for generic pharmaceuticals.
=B7 It is difficult to identify robust specific =
explanations for the observed bilateral price differences.
- Rather, the price differences are probably due to a combination of =
factors, including differences in health systems, subsidy and =
cost-containment mechanisms, market conditions and production costs.
- There is, nevertheless, some evidence to support the view that =
Australia's cost-containment arrangements, particularly reference =
pricing, may have contributed to keeping prices relatively low.
The report is 225 pages long, and it contains a lot of useful =
information in addition to its key findings. For example, appendix B =
provides summaries of the health care system, pharmaceutical system, and =
subsidy arrangements of each of the seven countries.
(The Productivity Commission is an independent Commonwealth Government =
agency, and is the Government's principal review and advisory body on =
microeconomic policy and regulation. It conducts public inquiries and =
research into a broad range of economic and social issues affecting the =
welfare of Australians.)
Melissa Raven, Lecturer
Coordinator, Drugs & Public Health (previously Addiction Studies)
Department of Public Health, Flinders University
G5 Flats, Flinders Medical Centre
BEDFORD PARK SA 5042, AUSTRALIA
Phone (08) 8204 5714 Fax (08) 8204 5693 International 61 8
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<P class=3DMsoNormal style=3D"mso-layout-grid-align: none"><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt">Australia's </SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">Productivity=20
Commission has released a report on Australian pharmaceutical prices =
relative to=20
prices in seven other countries: </SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
13.0pt">the US,=20
Canada, the UK, France, Spain, Sweden and New Zealand. The =
report</SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt"> focuses=20
on the prices that manufacturers receive for 150 pharmaceuticals under=20
Australia's Pharmaceutical Benefits Scheme. The report, <A=20
href=3D"http://www.pc.gov.au/research/commres/pbsprices/finalreport/pbspr=
ices.pdf"=20
target=3D_blank=20
title=3D"Link to Pdf File of the Commisison Research Report =
'International Pharmaceutical Price Differences'"><SPAN=20
style=3D"COLOR: windowtext; TEXT-DECORATION: none; text-underline: =
none">International=20
Pharmaceutical Price Differences</SPAN></A>, was released on 20 July =
2001. It is=20
available online (as well as hardcopy):<BR></SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt"><A=20
href=3D"http://www.pc.gov.au/research/commres/pbsprices/finalreport/pbspr=
ices.pdf">http://www.pc.gov.au/research/commres/pbsprices/finalreport/pbs=
prices.pdf</A><?xml:namespace=20
prefix =3D o ns =3D "urn:schemas-microsoft-com:office:office"=20
/><o:p></o:p></SPAN></P>
<P class=3DMsoNormal><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">The=20
report lists the key messages as:<BR><o:p></o:p></SPAN></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-LEFT: 0.5in; TEXT-INDENT: -0.5in; mso-list: l0 level1 =
lfo2; tab-stops: list .5in"><FONT=20
face=3DArial><SPAN=20
style=3D"FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt; mso-bidi-font-family: Arial">=B7<FONT=20
size=3D2><SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'">  =
; =20
</SPAN></FONT></SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">The=20
pricing of pharmaceuticals listed on the Pharmaceutical Benefits Scheme =
(PBS) is=20
an important issue for Australia. Between 1992-93 and 1999-2000, =
government=20
spending on pharmaceuticals rose from under 12 per cent of public =
expenditure on=20
health to over 15 per cent. In 2000-01, the cost to the Commonwealth =
Government=20
of the PBS increased by around 20 per cent, to over $4=20
billion.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-LEFT: 0.5in; TEXT-INDENT: -0.5in; mso-list: l0 level1 =
lfo2; tab-stops: list .5in"><FONT=20
face=3DArial><SPAN=20
style=3D"FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt; mso-bidi-font-family: Arial">=B7<FONT=20
size=3D2><SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'">  =
; =20
</SPAN></FONT></SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">This=20
study examines differences between manufacturer prices in Australia and =
seven=20
other countries for 150 PBS-listed pharmaceuticals, as at 30 June 2000. =
These=20
items account for over 80 per cent of total expenditure on PBS-listed=20
pharmaceuticals.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-LEFT: 0.5in; TEXT-INDENT: -0.5in; mso-list: l0 level1 =
lfo2; tab-stops: list .5in"><FONT=20
face=3DArial><SPAN=20
style=3D"FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt; mso-bidi-font-family: Arial">=B7<FONT=20
size=3D2><SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'">  =
; =20
</SPAN></FONT></SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">The=20
bilateral comparisons show that manufacturer prices in Australia for the =
top 150=20
pharmaceuticals are much lower than in the United States, Canada, the =
United=20
Kingdom and Sweden. Prices in Australia are closer to those in France, =
and about=20
the same as those in Spain and New Zealand.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-LEFT: 0.5in; TEXT-INDENT: -0.5in; mso-list: l0 level1 =
lfo2; tab-stops: list .5in"><FONT=20
face=3DArial><SPAN=20
style=3D"FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt; mso-bidi-font-family: Arial">=B7<FONT=20
size=3D2><SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'">  =
; =20
</SPAN></FONT></SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">The=20
price differences vary across different categories of pharmaceuticals. =
Prices=20
for new innovative pharmaceuticals are much closer to those in the other =
countries. The largest price differences are observed for =
‘me-too’=20
pharmaceuticals and they are also significant for generic=20
pharmaceuticals.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-LEFT: 0.5in; TEXT-INDENT: -0.5in; mso-list: l0 level1 =
lfo2; tab-stops: list .5in"><FONT=20
face=3DArial><SPAN=20
style=3D"FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt; mso-bidi-font-family: Arial">=B7<FONT=20
size=3D2><SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'">  =
; =20
</SPAN></FONT></SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">It is=20
difficult to identify robust specific explanations for the observed =
bilateral=20
price differences.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.65in; TEXT-INDENT: =
-0.15in"><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt"><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">–=20
Rather, the price differences are probably due to a combination of =
factors,=20
including differences in health systems, subsidy and cost-containment=20
mechanisms, market conditions and production costs</SPAN>.</SPAN></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.65in; TEXT-INDENT: =
-0.15in"><FONT=20
size=3D2><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">– There=20
is, nevertheless, some evidence to support the view that =
Australia’s=20
cost-containment arrangements, particularly reference pricing, may have=20
contributed to keeping prices relatively low.</SPAN></FONT></P>
<P class=3DMsoNormal><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">The=20
report is 225 pages long, and it contains a lot of useful information in =
addition to its key findings. For example, appendix B provides summaries =
of the=20
health care system, pharmaceutical system, and subsidy arrangements of =
each of=20
the seven countries.</SPAN></P>
<P class=3DMsoNormal><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">(<SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">The=20
Productivity Commission is an independent Commonwealth Government =
agency, and is=20
the Government’s principal review and advisory body on =
microeconomic policy and=20
regulation. It conducts public inquiries and research into a broad range =
of=20
economic </SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: =
12.0pt">and=20
social issues affecting the welfare of Australians.)</SPAN><SPAN=20
style=3D"FONT-FAMILY: Arial; FONT-SIZE: =
10pt"><o:p></o:p></SPAN></P></SPAN></DIV>
<DIV><FONT size=3D2>Melissa Raven, Lecturer<BR>Coordinator, Drugs & =
Public=20
Health (previously Addiction Studies)<BR>Department of Public Health, =
Flinders=20
University<BR>G5 Flats, Flinders Medical Centre<BR>BEDFORD PARK =
SA =20
5042, AUSTRALIA<BR>Phone (08) 8204 5714 Fax (08) =
8204=20
5693 International 61 =
8</FONT></DIV></BODY></HTML>
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