More cuts could create supply “tipping point”


empty shelves

The Generic and Biosimilar Medicines Association says further price cuts could undermine the supply of medicines

The Generic and Biosimilar Medicines Association (GBMA) has warned that if the price cuts proposed in the Grattan Institute report are adopted, the reliable supply of affordable and high-quality PBS medicines would be placed at risk.

The organisation also points out that the report is solely based on a selective analysis of 19 PBS medicines, whereas the PBS currently funds over 650 different medicines and 2,500 brands.

“This report looks at just a handful of medicines without considering the serious and worrying consequences of maintaining patient access to medicines,” says GBMA CEO Belinda Wood.

“The only possible outcome from the proposal in this ill-considered report is that Australia hits a ‘tipping point’ where low cost undermines supply. Where there would be a very real risk prices for generic medicines become so low suppliers simply have no choice but to stop supplying them,” says Ms Wood.

“This issue is real and already under discussion,” she adds.

The challenge of supply with already low prices has been recognised by government, she says.

An agreement between the GBMA and the Australian government signed in 2015 states they will work collaboratively to identify and resolve quickly any unintended consequences of the substantial price reductions, particularly where they may impact on the reliable supply of vital, affordable medicines for Australian patients.

“Australians do not pay too much for generic medicines,” says Ms Wood. “In fact, in December last year government stepped in to increase the price of around 60 medicines – including antibiotics and cancer medicines – where ongoing supply had been identified as a real risk.

“Imagine the impact on a family unable to get amoxycillin liquid to treat their child’s ear infection because, at just $1.28 per pack, the manufacturer couldn’t continue to supply it. Or, the impact on an elderly man who can no longer control his diabetes because, at 90 cents, the manufacturer of the diabetes therapy glimepiride cannot supply it.”

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