Australian govt deal with industry delivering lower medicine prices

Inflation figures released yesterday by the Australian Bureau of Statistics (ABS) measuring the Consumer Price Index (CPI) show that this rose 0.5% in the June quarter, for an annual rate of 1.2%. The headline annual inflation figure to June was well below the Reserve Bank of Australia's (RBA) target band of two to three per cent, but underlying inflation, which smoothes out the larger quarterly prices movements, was two per cent for the year to June.

The most significant price rises in the June quarter 2012 were for medical and hospital services (+2.8%), rents (+1.1%), vegetables (+5.2%) and furniture (+4.5%), but there was a big fall in the prices consumers pay for medicines.

Commenting on the figures, Medicines Australia chief executive Brendan Shaw said that this fall showed that the Memorandum of Understanding between Medicines Australia and the Government for the Pharmaceutical Benefits Scheme is working.