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Source: The Pharma Letter

Date: 9-Feb-2012

Australian patients and taxpayers need to make the most of the unprecedented value of medicines coming off patent in 2012 - leading to a windfall of hundreds of millions of dollars in savings to the economy, according to the peak generic medicines body, says the country's Generic Medicines Industry Association (GMiA).

The trade body's chairman, Martin Cross, says Australia should look to developed countries such as the USA and UK, as both depend heavily upon the more cost effective, high quality generic medicines to create savings to the patient and drive savings to the countries' respective health budgets.

In the USA, 78% of all medicines dispensed are generic follow-on medicines. This is mainly due to patients being highly sensitive to the cost of medicines. By comparison, in Australia patients accessed follow-on generic medicines only 36% of the time, noted the GMiA, which is proposing initiatives to the government to encourage uptake of generic drugs by, for example, by reducing the A$5.80 charge pensioners pay when they purchase generic medicines under the PBS to encourage them to switch to the cheaper drugs, which could save as much as A$500 million a year.

"Every time a consumer chooses a follow-on generic medicine, there are substantial benefits to national savings,"says Dr Cross, adding: "In Australia, the presence of generic medicines will effectively pour hundreds of millions back into the 2012-13 Federal Budget

Generic medicines are accepted as delivering the same health benefit to all Australians as their branded equivalents and they must meet the same strict Australian standards as the original brand.

"We need to ensure the PBS remains sustainable and affordable. Supporting the uptake of follow-on generic medicines in Australia provides a three-way win for the patient, the taxpayer and the economy,"Dr Cross says.

Automatic 16% price cut for follow-on generics and initial brand

This year a record value of medicines are coming off patent in Australia. When the first follow-on generic medicine lists on the PBS, there is an automatic statutory 16% price reduction applied to both the follow-on generic medicine and the initial brand. This generates an immediate and significant saving to the PBS and government.

Dr Cross says this windfall needs to be better absorbed back into the health budget. He stressed that if the uptake of follow-on generic medicines were boosted, the Government would not need to cut into the PBS in order to get the Budget into surplus.