Medicines Australia agreement to reduce Rx drug prices; Merck Serono's Erbitux funding under PBS recommended

Just ahead of the tightly fought and as of going to press still undecided Australian election which took place on August 21, an agreement was announced between the pharmaceutical trade group Medicines Australia and the Commonwealth Government that will reduce the price of hundreds of medicines on the Pharmaceutical Benefits Scheme (PBS), Medicines Australia told a Senate inquiry.

The exact outcome of the election is unlikely to be known quickly because of the closeness of the contest and the need for incumbent Labour Party Prime Minister Julia Gillard and conservative Coalition party leader Tony Abbott to try to sort out a deal with independents and Greens who now hold the balance of power.

The PBS accord, announced in the May Budget, will deliver PBS savings to taxpayers worth A$1.86 billion ($1.61 billion) over five years. The savings will be realized by cuts in the price the Federal Government pays for hundreds of commonly prescribed off-patent medicines. These price cuts will flow to consumers, says Medicines Australia.