Australia paying 64 times more for medications

Date
    March 18, 2013


Australia is wasting more than a billion dollars a year by paying up to 64 times too much for some prescription drugs, according to a former top federal health bureaucrat.    

In a report for the Grattan Institute think tank, Stephen Duckett, a former secretary of the Commonwealth Health Department, compared drug prices paid by the federal government under the Pharmaceutical Benefits Scheme with those paid by New Zealand and by the public hospital systems of two Australian states.

He found that if Australia paid the prices New Zealand pays for 62 identical drugs, it would save $1.1 billion a year. The Commonwealth would save $1.4 million a day if it paid New Zealand prices for the cholesterol-lowering drug atorvastatin, which is marketed by Pfizer under the name Lipitor.

The Commonwealth pays an average of 10 times as much as New Zealand for the top 10 drugs by volume. New Zealand's Pharmaceutical Management Agency is an independent expert body which purchases drugs from within a budget set by government.    


Professor Duckett said having a fixed budget strengthened the arm of the agency in price negotiations with drug companies.

In contrast, spending on Australia's Pharmaceutical Benefits Scheme - projected to be almost $10 billion this financial year - is uncapped, and a pricing authority containing one-third pharmaceutical industry representation makes pricing recommendations to the health minister.

But the report said New Zealand was not alone in paying lower prices, finding that if the Commonwealth paid the prices Western Australia pays for 39 identical drugs, it would save $750 million a year. The Commonwealth pays 64 times the price Western Australia pays for the anti-psychotic drug olanzapine.

Professor Duckett also called on the Commonwealth to insist on greater discounts when drugs come off patent. While the price the Commonwealth pays for a drug is cut by 16 per cent when the patent expires, many nations demand much greater reductions.

Medicines Australia chief executive Brendan Shaw said the report was a ''guide to how to turn your health system into that of a third world country''.

''Australia is not a developing country. We should be able to afford a good health system,'' he said.    

A spokesman for Health Minister Tanya Plibersek said the government had already reduced the price of 1400 drugs, delivering almost $2 billion in savings.

''While the savings identified in the report are significant, there are a range of factors which the government considers when setting medicines policy,'' the spokesman said.

An agreement between the Commonwealth and the medicines industry, preventing the government from making price-related savings to the PBS expires in July 2014.


Read more: http://www.theage.com.au/opinion/political-news/australia-paying-64-times-more-for-medications-20130317-2g8yv.html#ixzz2NpanD3sb

Yep, basically the Health and Education sectors have hijacked the federal and state budgets for their own ends.

When I was on lipitor i saw the govt price of $120. I seriously doubt that NZ gets it for $2.  My guess is the 64 times is for one or two rare grugs and the rest are not that different.

but compare this to the USA where people die because they cant affird the drugs we get supplied cheaply.

yeah youre comparing apples with oranges crook.

for example a drug like olanzapine is probably provided almost free to state hospitals , in the hope that patients newly admitted to a state hospital will be presribed it for years in the community where the feds pick up the cost for ongoing schizophrenic meds.

so sayin it is 64 times dearer to the feds is a bit of a furfy.

the model is a bit like the computer printer model. they just loss lead to get you hooked on their brand and then make the profits later.

The Big pharma and Government have an obligation to supply medicines to the poor as cheaply as possible...