Codeine crackdown could cost $1.27 billion over four years… and more

Upscheduling codeine-containing OTCs could cost upwards of $1.27 billion in MBS outlay alone over the next four years, a new report has found.

The Pharmacy Guild engaged Cadence Economics to undertake an analysis of the fiscal impacts of upscheduling all medicines containing codeine to prescription only.

Currently there are 16.4 million units sold each year of analgesics that include codeine, and 5.2 million units sold of cold and flu medicine that includes codeine.

“Reclassifying codeine as an S4 – Prescription Medicine, will require consumers to (i) obtain a prescription from their GP, and (ii) fill that prescription at their local pharmacy,” the report states.

“The requirement to visit the doctor and then the pharmacist to fill a prescription clearly involves a cost additional to just going to the nearest pharmacy to purchase a low-dose codeine medicine OTC.

“It is therefore reasonable to assume that a certain proportion of those people currently getting their low-dose codeine OTC, will switch to a less-effective (but still convenient) OTC alternative (such as paracetamol or ibuprofen or a combination ibuprofen/paracetamol medicine.”

According to a survey by the Macquarie Centre for the Health Economy, 63% of respondents would still see a GP to obtain codeine-based medication as an analgesic if they were no longer able to get it over the counter at a pharmacy, however.

For cough and cold patients, 52% would elect to visit a GP for these medicines, as would 66% of allergy and sinus sufferers.

“These survey results are taken to be around the upper limit to consumers’ preparedness to see a GP in order to obtain a medicine containing codeine,” says the Guild report.

Some would be seeing a GP anyway that day, and there is also a possibility that former regular users of OTC codeine would see their GP regularly enough not to need an additional GP visit for the purpose of obtaining a script for a formerly OTC codeine-containing product.

“Those that are most likely to undertake additional GP visits are doing so in response to one-off (sudden and severe) pain episodes requiring a strong analgesic.”

The report estimates an additional 8.7 million GP visits a year as a result of moving codeine medicines from S2 and S3 to prescription only.

The MBS outlay of the additional GP visits is estimated to be $316.44 million each year, the report states.

The report points out that it has not accounted for any side benefits from these GP visits, such as the GP identifying and preventing a more complex underlying problem or an addiction, or counselling the patient to use a different medicine.

The report also highlights that the patients most likely to be generating additional GP visits are those who are otherwise relatively healthy and not already seeing a GP regularly – thus a higher proportion of non-SN patients.

“For patients that obtain a prescription for the same medicines they are currently using (Panadeine or Panadeine Extra, or equivalents), these are expected to be private scripts that are not eligible for a PBS subsidy, so no cost to the PBS,” says the report.

“If some of these patients are up-scaled to Panadeine Forte, this could increase the cost to government for some non-SN concessional patients (even for these patients, the government cost is relatively low, at around $5 per script). For general non-SN households, the cost of a medicine such as Panadeine Forte will be under the PBS co-payment.

“Overall, we consider the likely PBS impact from any ‘up-scaling’ to be in the order of a few million dollars per annum. Given this is modest compared to the fiscal impact of the additional GP visits, we have not included it in the estimate, but note there may be a small upside risk to PBS outlays from up-scaling non-SN patients as a result of this policy change.”

The report estimates a forward estimate (over a four-year period) of a fiscal cost of $1.27 billion from the upscheduling of OTC codeine-containing products.

This estimate does not allow for population growth or the indexation of the MBS subsidy.

The personal cost to patients – in terms of financial and time cost to see the GP – is likely to be high.

The report cites Macquarie Centre for the Health Economy research which finds an additional $585 million in lost productivity costs per year.

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