Australians pay almost 16 times more for prescription drugs than other developed countries, according to the latest report from policy think tank the Grattan Institute. The authors of the paper blame this pricing disparity on the way our government sets prices, with vested interests often influencing price negotiations.
Prescription drugs picture from Shutterstock
For its latest investigation into generic drug pricing, the Grattan Institute compared seven Australian wholesale drug prices in December with those in the UK, New Zealand and the Canadian province of Ontario. It found that the average Australian prices were almost 16 times higher.
This pricing anomaly was despite the Commonwealth Government’s price disclosure reforms which saw the prices of these drugs fall by an average of 34 percent before the Grattan Institute report was conducted.
“Price disclosure has not gone far enough or fast enough, and it’s time for a new approach,” Grattan Institute Health Director Stephen Duckett said in a statement.
"Benchmarking against prices in other countries would get a much better deal. Of the seven drugs that had their prices reduced in December, patients would pay less for all of them, instead of just three. The out-of-pocket saving would also be much higher, averaging more than $21 per drug...There is no reason we should pay more."
According to the report, almost one in 10 Australians don’t take their prescribed medicine because of the costs involved. They argue that better prices would help more people to buy the medicine they need.
The report's authors have urged the government to ask the Department of Health to release annual international comparisons of Australia’s drug prices so it can cut prices more effectively. They also suggest using a one-off benchmarking approach to get fair market prices and setting up an independent drug pricing body to ensure prices stay low in the future.
Poor pricing progress: price disclosure isn’t the answer to high drug prices [Grattan Institute]