Government would pay more for cancer medicines under Grattan model

New price disclosure reductions on the prices of medicines on the Pharmaceutical Benefits Scheme announced late yesterday show that the pricing model proposed by the Grattan Institute would cost taxpayers millions of dollars more.

“While some commentators continue to criticise the PBS price disclosure arrangements, these same policies are actually pushing the price of many Australian medicines below those of comparable markets overseas,” Medicines Australia Chief Executive, Dr Brendan Shaw, said today.

“The fact is if Australia used the pricing model recommended by the Grattan Institute, the Australian Government would be paying much more for medicines,” Dr Shaw said.

For example, 20 mg docetaxel – used to treat a range of cancers – will cost A$6.89 in Australia from 1 April, compared to A$275 in the United Kingdom, meaning the UK pays about 40 times more than Australia.

“Under the Grattan model of pricing to international benchmarks, the Australian Government would pay millions of dollars more a year for docetaxel treatment than it will under the price disclosure policies,” Dr Shaw said.

“In fact, some of the medicines used by the Grattan Institute in its original March report now have Australian prices below those of international benchmarks as a result of the price disclosure policy.

“Medicines like ramipril for blood pressure, omeprazole for stomach ulcers and amlodipine for blood pressure are now cheaper here than in Canada.

“It’s galling that while the Australian industry is copping massive price reductions that have pushed prices below international benchmarks and led to job losses, we have commentators arguing prices are too high.

“The fact is that the prices of many medicines in Australia, patented and off-patent, are well below prices found in other comparable markets.”

Over 120 medicines will have their prices cut by up to 90% on 1 April next year as a result of price disclosure, with the top five price reductions announced late yesterday for 1 April including:

  • Docetaxel (cancer) – 90% reduction
  • Oxaliplatin (cancer) – 60% reduction
  • Valaciclovir (herpes) – 56.5% reduction
  • Topotecan (cancer) – 56% reduction
  • Fluconazole (anti-fungal) – 53% reduction.

A full summary of all 1 April price disclosure price reductions can be found here:


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Alex Chapman
Phone: (02) 8281 3204