PBS Price Disclosure

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					PBS Price Disclosure

The PBS Reforms introduced in 2008 have seen the most                                  Pharmacy does not receive any compensation for the effect
significant changes to the scheme since its inception over 60                          of these price reductions on business incomes.
years ago. The reforms have included:
•	 Mandatory price reductions of 25%, effective from 1
  August 2008, across drugs representing approximately                                     It is expected that future announcements will also
  50% of PBS prescriptions dispensed. This is in addition to                               show that this new, inbuilt mechanism is having the
  the continuing policy of a minimum 12.5% price reduction                                 desired and expected effects – creating a transparent
  when the first new brand of a drug is listed.                                            marketplace for PBS drugs, delivering savings to
                                                                                           government to allow headroom for listing of new
•	 A new system of Price Disclosure, whereby manufacturers                                 drugs, and debunking myths about the extent to
  are required to provide information to government                                        which community pharmacies are given discounts
  showing the market prices of their drugs. Where there is a                               on generic drugs.
  significant difference between the government price and
  the market price of a drug, the PBS price will be reduced
  to match the market.

   Price disclosure provides the government with market
   transparency and embeds a systematic method to
   capture savings as a result of price competition in both
   the short and long term.

The Department of Health & Ageing has announced that
the following drugs will be subject to price reductions on 1
August 2009 following the first round of price disclosure:
•	 DOXORUBICIN (injection/intravescical), a 63.54%
•	 MELOXICAM, a 22.46% reduction
•	 MITOZANTRONE (injection), a 34.42% reduction
•	 ONDANSETRON (injection), a 15.37% reduction
These reductions alone will save the government at least
$52 million in PBS outlays over the next four years. As more
drugs end their patent life, these are potentially just the first
of hundreds of reductions in pharmacists’ reimbursed price
over coming years.

This initial announcement confirmed what those in the
sector have been saying for several years – that significant
trading terms by manufacturers to community pharmacies is
not the norm. Of the ten drugs that could have been subject
to price disclosure, only four exceeded the agreed threshold
of a 10% average trading terms.

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Telephone: +61 2 6270 1888 • Facsimile: +61 2 6270 1800 • Email: guild.nat@guild.org.au • Internet: www.guild.org.au                 Version 1.1 - March 2009

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Description: PBS Price Disclosure