Medicines industry calls for discount rate reduction now
18 November 2022: Medicines Australia welcomes the recommendation to lower the discount rate for medicines and vaccines but questions why it should be delayed for two years.
Today, the Pharmaceutical Benefits Advisory Committee (PBAC) – the expert committee that evaluates the value of medicines in Australia – published advice recommending Australia’s discount rate could be lowered between 3.5% – 4% to bring the country closer to other recommended international standards.
CEO of Medicines Australia, Elizabeth de Somer, says medicines and vaccines that have long-term health benefits, such as childhood vaccines, are disadvantaged and delayed by a technical discount rate that is higher in Australia than other comparable countries.
“We see today’s announcement as acknowledgment by the PBAC that the discount rate should be changed,” Ms de Somer said.
“This inevitable change should not be caught up in the HTA Review as it cannot wait two years.
“The review of the discount rate was a ‘fast start’ commitment contained in our Strategic Agreement with the Commonwealth. We will continue to work with the Minister and his office to get this done as soon as possible.
“Our country is unnecessarily lagging behind which ultimately causes delays to patients accessing innovative medicines and vaccines.
“Australia has not changed its discount rate for more than 30 years and in that time, Canada, France, England, Germany, Ireland, the Netherlands and New Zealand have all reduced their discount rates.
“Failing to bring Australia’s discount rate into line with international best practice devalues the longer-term health of some of our youngest Australians and is a misalignment with the Government’s preventative health priorities.
“In Australia, the 5% discount rate has contributed to delays in accessing vital therapies, including vaccines for human papillomavirus (HPV) in adolescents, meningococcal disease in children and adolescents as well as medicines to treat hepatitis C, and treatments for spinal muscular atrophy in children,” Ms de Somer said.
In 1990, the PBAC recommended Australia’s discount rate be set at 5% and it has not been changed since. Medicines Australia has urged the Government to reduce the discount rate to 1.5%, which aligns with international best practices.
Medicines Australia continues to urge the Government to apply a reduced discount rate as soon as possible. The change could come into effect with a simple adjustment to the PBAC Guidelines and be implemented in a matter of weeks.
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