Australians are paying way too much for drugs

Peter Terlato 6 March 2017 NEWS

Prescription drugs

Twice as costly as the UK and three times higher than NZ.

A new report claims Australians are paying $500 million a year too much for prescription medicines, which could be reduced by making some price-setting changes to the Pharmaceutical Benefits Scheme.

The Grattan Institute's Cutting a better drug deal report found taxpayers and patients would be better off if the government were to benchmark prices of generic drugs in Australia against prices paid overseas.

The report suggests the government is overpaying for generic medicines no longer covered by patents. While a system does exist where drug companies are transparent about the actual prices pharmacies are paying for these drugs, the policy is not working quickly enough to rein in the price for customers.

Grattan's report states benchmarking drug prices would save $93 million per year and cut the price of 16 commonly prescribed drugs by an average of $6.43 per pack.

Drug prices in Australia are currently more than twice as high as they are in the UK and more than three times higher than those in New Zealand. For a group of seven commonly prescribed drugs, Australians pay, on average, five times the best international rate.

For example, anastrozole, a 30-pack of 1mg anastrozole (Arimidex) breast cancer drug tablets costs $19.20 in Australia. In the United Kingdom it's just $2.45 per pack.

The report also found that over the past 12 months around 8% of Australians didn’t get, or deferred from obtaining, prescribed drugs because they couldn’t afford them.

The way the government deals with interchangeable, approved drugs has also been brought into question. Australia's "therapeutic group premium policy" should mean that these drugs are properly classified and categorised and that the government only pays the price of the cheapest drug.

However, the report suggests the government could save a further $445 million each year if this policy was broadened to cover a greater number of therapeutic groups, referencing a similar policy in Germany.

How much do you pay for your health insurance per month? It's a simple enough question but it seems that Australians know very little when it comes to how much they are forking out to their health fund.

Picture: Shutterstock

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