A softer cut

Price disclosure changes not as bad as they seem on paper: experts

The latest listed changes to the PBS represent a ‘watering down’ of previous heavy discounts, say experts as the first measures that were included in the 2015 PBS Access and Sustainability Package take effect.

In the wake of the PBS publicising the measures included in the 1 April price reduction cycle, a number of experts have contacted AJP to say not as many medicines would be impacted under the revised measures as would have been prior to the 2015 package, which was linked to the 6CPA.

The comments related to the introduction of a 30% Unadjusted Price Reduction for a drug that has been F2 and multi-branded for 42 months from the commencement of the data collection period for the cycle (1 April 2017) and 4.5 years to the first potential reduction day.

According to the previous advice published by the Department of Health under its package overview ‘Price disclosure— increased price disclosure price reductions threshold’, “the new measure provides that after a medicine has had seven full cycles of price disclosure data collection and reduction days, the threshold for price disclosure price reductions will increase from the current 10 per cent to 30 per cent”.

“This move should provide some relief from price disclosure reductions for medicines which may already have had repeated market-driven price reductions,” it said. “It will mean that, as long as the weighted average discount for a medicine in this category is less than 30 per cent, there will be no price disclosure reduction to the base price for any related brand of the drug after the seven cycles.

“This will help to protect the price of medicines where there is little room left for competition or where a price reduction could affect the viability of the medicine”.

Pharmacy business analyst Bruce Annabel also commented on the AJP website to say: “The 30% threshold is very important meaning there won’t be a cut to many drugs such as rosuvastatin”.

“Accordingly the overall 1 April cuts will be very modest impacting dispensing profitability by only 10 or 12c per script,” he said.

“We have seen the worst of price disclosure and the 30% threshold the Guild negotiated last year with Minister Hunt is vital.”

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