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Australian Journal of Pharmacy : March 2005
news news NDUSTRY groups have welcomed changes to the original 12.5 per cent price reduction policy for new brands already listed on the Pharmaceutical Ben- efits Scheme (PBS), following Health Min- ister Tony Abbott’s announcement that reduction would only occur once in any group of price-related drugs. Generic Medicines Industry Associa- tion (GMiA) chairman John Montgomery said: ‘We were pleased the Government listened to our concerns yet still achieved their savings targets as announced prior to the Federal election.’ ‘While we very much welcome the Government’s preparedness to listen to our concerns and those of other stake- holders, as acknowledged by Minister Abbott,’ Medicines Australia chief execu- tive Kieran Schneeman was more guarded in his comments. ‘We will need to study the proposal in more detail,’ Mr Schneeman said. ‘The impact is difficult to estimate, there are Government abandons compounding effect on mandatory generics price cut policy I elements that will need to be worked through with the Government and more clarification is needed.’ According to the Department of Health and Ageing, a price reduction will occur when a new brand of an already listed PBS medicine is added to the PBS. The price reduction will flow to other brands of the same drug and to other drugs in the same price-related groups. For example, when the first new generic brand of one of the ‘statins’ comes forward after the start date, it will need to offer at least a 12.5 per cent price reduction or more, and the new benchmark price will flow to the other statin drugs. Each price related group of drugs would only subject to the 12.5 per cent reduction once. The flow-on reductions will apply to both patented and non- patented medicines. The original plan to force the 12.5 per cent reduction on all generic drugs had alarmed the pharmaceutical industry, which claimed the manufacturers could be damaged under the scheme. Mr Abbott denied the announcement was policy on the run or that the govern- ment was bowing to pressure from the pharmaceutical industry. ‘We didn’t have the chance at that time...to have the kind of consultations with the industry that we’ve subsequently had,’ Mr Abbott said after the announce- ment. ‘And it’s only in subsequent consulta- tions with the industry when they’ve been able to tell us about their expectations of just how many new versions of particular drugs might come on that we’ve been able to work out that there would be poten- tially a much bigger price impact...of this measure than we originally thought.’ According to a Department spokesper- son, the savings will be broadly consistent with those announced in the Charter of Budget Honesty ($740 million over the four years to 2007–08). ¦ Start date for trans Tasman body deferred T HE start-up of the Trans-Tasman Therapeutic Products Agency has been deferred for 12 months, and is now set to become operational on 1 July 2006. The Australian and New Zealand gov- ernments made the decision in order to ensure the new regulatory scheme meets expected standards and fully recognises the importance of consulting with industry, consumers and other interested groups. However the Parliamentary Secretary for Health, Christopher Pyne, said that if the scheme was ready before the projected start date, it could become operational earlier. ‘One of the main reasons for the defer- ral is a recognition that industry needs cer- tainty around the introduction of the new scheme, which needs time to review and comment on the rules of the regulatory agency, and to put in place transitional arrangements,’ Mr Pyne said. Industry groups welcomed the move. ‘We’re pleased that the government heard our concerns about allowing suffi- cient time to develop the best possible sys- tem, including consultation with industry on all aspects that would impact it,’ said Juliet Seifert, executive director of the Aus- tralian Self-Medication Industry (ASMI). ‘We agree that sufficient time is needed to ensure that we get it right the first time.’ The new agency will replace Aus- tralia’s Therapeutic Goods Administra- tion (TGA) and the New Zealand Medi- cines and Medical Devices Safety Authority (Medsafe). It will be account- able to both Australian and New Zealand governments. ¦ THE AUSTRALIAN JOURNAL OF PHARMACY VOL 86 MARCH 2005 ? 141