It is the first time Health Minister Sussan Ley has referred a company to the ACCC due to the “unique” circumstances surrounding the price rise for Panadol Osteo, a spokesman for the Minister told the AJP.
The spokesperson says the Minister is also concerned about GSK’s market dominance and “misleading claims” and “justification” for the price rise.
GSK said in a letter to wholesalers that in moving to an OTC business model it could no longer sustain its current pricing for Panadol Osteo.
But Minister Ley says there are no additional regulatory or administrative costs associated with this policy change regarding osteo paracetamol products, which was recommended by the PBAC, not government.
“The lack of detail backing up the reasoning behind a 50% increase raised suspicions for me, as it did for others in the pharmacy sector, and at the very least needed to be investigated further,” says Minister Ley.
“I wasn’t just concerned for consumers, but also pharmacists at the coal face who are obviously keen to keep prices as affordable as possible for patients, and that’s why I’ve taken this action.”
She adds that are always challenges when reforms are introduced but she is determined to “keep an eye out for anyone trying to unfairly exploit it for commercial gain”.
“This was a decision based on ensuring consistency when it came to the sale price of some common, non-emergency over-the-counter medicines for patients, as well as allowing the future listing of new breakthrough medicines on the PBS.
“This is evidenced by the need to find $1.6bn for new drugs in the recent budget update, including a cure for Hepatitis C.”
However, industry insiders say the government was told that the cost of Panadol Osteo would rise once it was delisted from the PBS more than six months ago. GSK says it told the government well in advance of the decision that consumers would face higher prices if the drug were delisted.
Also, the Guild wrote to the PBAC on 17 December asking for a review of the de-listing of Panadol Osteo because it is clear it is not generally available to patients cheaper OTC at the PBS-subsidised maximum quantity for one month’s supply: 192 tablets which is 2 packs of 96 tablets.
The Guild said before the price rise on 1 January, the ex-manufacturer price for 2 packs of 96 Panadol Osteo ($8.56) was higher than the amount paid by a Concessional Card holder under the PBS ($7.52). “The Guild queries if the PBAC compared the ex-manufacturer price of only 1 pack of 96 Panadol Osteo ($4.28) to the PBS Concession patient co-payment ($7.52) when the PBS maximum quantity for one month’s supply is actually 2 packs.
“Regardless, it is clear that the de-listed Panadol Osteo will not be available OTC at a comparable cost to patients, especially as GSK has increased the ex-manufacturer price from 1 January by $2.03 per 96 pack to $6.31 ($12.62 for the PBS maximum quantity of 2 packs for a month’s supply).
The Guild alerted government officials during the 6CPA that such ex manufacturer price rises had occurred with previous de-listings from the PBS.”
Meanwhile, Chemist Warehouse began running a TV campaign last week advertising “you will find Panamax is just $1.89 a box, and two boxes of Panadol Osteo is just $7.50 – that’s over the counter and you don’t need a doctor’s script.”