Will Australian Pharma ever be the same again as a result of PBS changes?

The Australian pharmaceutical industry landscape is set to dramatically alter as a result of government changes to the Pharmaceutical Benefits Scheme (PBS), suggests independent market analyst Datamonitor, whose outlook for the future includes withdrawn products, a struggling generics sector and wholesaler reorganization, as PBS reforms take effect.

Erin Brady, Australian health care analyst at Datamonitor, comments: “As further statutory price cuts and ‘expanded and accelerated’ price disclosure is applied to substitutable medicines by the PBS, downward pricing pressures will affect everyone in the industry. Some, however will suffer more than others. The local generics sector will need to seek new efficiencies to continue competing in the Australian prescription pharmaceuticals market, and wholesalers must assess their strategic options in a changing market landscape.”

Innovator and generics manufacturing companies have very different opinions of the latest PBS reforms package. Innovator companies were involved in negotiating a memorandum of understanding (MoU) with the government in relation to the reforms, and are positive about the predictability this will provide the industry over the next four years to 2014. Generics companies, however, were not included in any negotiations and staunchly opposed the bill.