Medicines Australia and the Government have signed a five-year agreement which will see innovative medicines reduced in price over 15 years
The organisation says the Strategic Agreement will support ongoing access to the latest innovative medicines for patients, significant savings to taxpayers and provide stability for the innovative medicines industry.
The changes will see single brand (innovative) medicines reduced in price after being on the PBS for 5, 10 and 15 years respectively. On entry of brand competition, there will be an increase from the current 16% reduction to 25%.
This is expected to deliver $1.8 billion in savings that will be reinvested into the supply of medicines, including more breakthrough therapies on the PBS.
“The Pharmacy Guild, Medicines Australia and GBMA agreements include one-off price reductions for certain medicines that have been on the PBS for 10 and 15 years, ongoing reductions in more PBS drug prices and support for the uptake of lower-cost generic and biosimilar medicines, in return for reinvestment in future drug listings,” said Health Minister Greg Hunt.
The Pharmacy Guild says it will support these further pricing reforms, “to ensure the sustainability of the PBS”.
“Notably, the Guild will support steps which will make many medicines more affordable for taxpayers and consumers:
- extended/additional F1 formulary statutory price reductions; and
- increasing the 16% Statutory Price Reduction to 25% on the entry of the first generic or biosimilar brand competition.”
Medicines Australia Chairman Wes Cook says that the decision to sign the Strategic Agreement “ends a long period of uncertainty for industry and will help to improve the confidence of our members to continue to bring innovative medicines to Australia and to invest in local research and development, such as clinical trials”.
“This agreement is a significant step towards creating an environment that encourages growth in the Australian pharmaceutical industry which has been identified as one of the key sectors for our nation’s future economic success.
“Medicines Australia entered into this agreement with a number of key principles that were not only important for our sector but also vital for prescribers, patients and the future of the PBS.”
“Fundamental to all discussions was the principal that a physician has the right in consultation with their patient to determine the exact treatment that is prescribed and dispensed. This principle is upheld in the agreement with appropriate, physician- determined introduction to biosimilar and generic medicines,” says Mr Cook.
The Guild also said it will support the introduction of measures that improve the uptake of biosimilar medicines as recommended by the PBAC on a case-by-case basis, streamlined authorities for biosimilars compared to the reference biologic, and enhancements to prescribing and dispensing software to establish default prescribing by active ingredient rather than by brand (unless overridden by the prescriber).