Costs of paying higher prices for equivalent effects on the Pharmaceutical Benefits Scheme.

Conclusions Potential savings from maintaining equivalent prices for all pharmaceuticals listed on the PBS on a cost-minimisation basis could be over A$500 million per year. Actions to reduce these costs can be taken within existing policy frameworks, but legislative and political barriers may need to be addressed to minimise these costs, which are incurred by the taxpayer for no additional benefit.What is known about the topic? Pharmaceuticals listed on the PBS must provide value for money. Many pharmaceuticals achieve this by demonstrating equal effectiveness to an already listed pharmaceutical and requesting the same price as this comparator; that is, listing on a cost-minimisation basis. When the comparator moves off-patent, the price of the still-patented pharmaceutical is protected, whereas the off-patent drug is subject to price disclosure and often steep price reductions.What does this paper add? This paper adds to recent evidence on the costs to government of paying different prices for two or more pharmaceuticals that are equally effective. Between 2008 and 2011, the direct comparators for 68 pharmaceuticals listed on a cost-minimisation basis have moved onto the price disclosure list. Across 12 of these listings, the potential cost savings in the 10 months to April 2015 were A$73 million.What are the implications for practitioners? The PBS costs the Australian government over A$9 billion per year. Annual savings over A$500 million per year could be achieved by main...
Source: Australian Health Review - Category: Hospital Management Authors: Tags: Aust Health Rev Source Type: research