Generic drug prices and policy in Australia: room for improvement? A comparative analysis with England

Abstract

Despite recent reforms, the Australian Government continues to pay higher prices than its English counterpart for many generic medications. The results suggest that particular policy areas may benefit from review in Australia, including the length of the price-setting process, the frequency of subsequent price adjustments, the extent of price competition between originators and generics, medical professionals' knowledge about generic medicines and incentives for generic prescribing. WHAT IS KNOWN ABOUT THE TOPIC? Prices of generic drugs have been the subject of much scrutiny over recent years. From 2005 to 2010 the Australian Government responded to observations that Pharmaceutical Benefits Scheme prices for many generics were higher than in numerous comparable countries by instituting several reforms aimed at reducing the prices of generics. Despite this, several studies have demonstrated that prices for generic statins (one class of cholesterol-lowering drug) are higher in Australia compared with England and many other developed countries, and prices of numerous other generics remain higher than in the USA and New Zealand. Recently there has been increasing interest in why these differences exist. WHAT DOES THIS PAPER ADD? By including a much larger range of commonly used and costly generic drugs, this paper builds significantly on the limited previous investigations of generic drug prices in Australia and England. Additionally, this is the first comprehensive investigation of multiple supply- and, in particular, demand-side factors that may explain any price differences between these countries. WHAT ARE THE IMPLICATIONS FOR PRACTITIONERS? Practitioners may contribute to the higher prices of generic medications in Australia compared with England through relatively low rates of generic prescribing. There are also significant implications for health policy makers, as this paper demonstrates that if Australia achieved the same prices as England for many generic drugs there could be substantial savings for the Pharmaceutical Benefits Scheme.

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“…Use of technology : The main part of this theme is using of e-prescribing system by physicians ( 5 , 16 , 19 , 24 , 32 , 38 , 43 , 47 ). In this system, medicines are categorized into three tiers.…”

“…In 14 countries, it is advised to use GS, including Norway, Ireland, and Poland. As well, the GS is mandatory in 14 US states alternatively, it is forbidden in five countries, including Bulgaria, Austria, and Belgium ( 3 , 5 , 19 , 23 , 25 , 28 , 29 , 31 – 33 , 35 , 38 , 40 , 46 , 58 – 61 ). Many studies have shown the efficiency of generic substitution policy and the right of pharmacists to dispense generics, regardless of whether the prescriber wrote the brand name or generic ( 62 – 64 ).…”

“…Educational and informational campaigns in television, radio ( 11 , 31 ), internet ( 23 ) and social media ( 11 ), local newspapers, business journals, consumer magazines, anthropomorphic images ( 16 ), Posters and pamphlets (for example in Japan) ( 25 ), are practices of encouraging the use of generic medicines in different countries ( 3 , 12 , 19 , 33 , 35 , 38 ).…”

“…Following the expiration of originator company's medicines patent, generic medicines can be produced. Given bypassing the development and approval process costs, generic drugs, unlike branded medicines can provide the same therapeutic benefits at a lower price( 19 ).…”

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“…The basic compound patent for sofosbuvir expires in a number of patent-granting countries in 2025 [ 44 ]. Upon patent expiry, generics can be freely produced and disseminated, creating competition and reducing costs for governments and consumers [ 45 , 46 ]. For example, generic competition for HIV antiretroviral therapy (ART) contributed to a 99% price reduction [ 47 ].…”