Australian govt seeks A$6 billion savings from changes to PBS, which industry says is flawed

The Australian government plans to extract more savings through the Pharmaceutical Benefits Scheme, following reforms which began in 2007, and it expects to generate about A$6 billion ($5.59 billion) in savings, through exploiting the use of generic drugs once patents expire on more expensive originator medicines, reported the Sydney Morning Herald last week.

Details are expected to be revealed this week when the Kevin Rudd government announces its budget. Cuts to the price of prescribed medicines are expected to generate A$2 billion savings to the government and about A$300 million to patients over four years. The fall in prices the government pays also drives down prices paid by consumers where the actual cost of the medicine falls below A$33.30 for a script.

A recent Sydney University study found that in the past five years Australia has paid $1 billion more for cholesterol-lowering drugs than if it had paid the same prices as the UK government for the same medicines, the newspaper noted.