AUSTRALIAN PRICE RISES LEAD TO PRESCRIBING SLIDE

According to Australia's Health Insurance Commission, prescriptions for drugs supplied under the country's Pharmaceutical Benefits Scheme (PBS) have fallen in the wake of recent price rises. The statistics indicate that 42mn prescriptions were written in the first quarter, compared to 44mn in Q104.

Meanwhile, average prescription prices grew by AUD4.90 (US$3.72) in January 2005, reaching AUD28.60 (US$21.71) for most consumers. According to local trade association Medicines Australia, the figures show that cholesterol and hypertension drugs declined exceptionally sharply in the period. In this regard, the government has ordered a 12.5% price cut on all cholesterol drugs except Pfizer's Lipitor, as new simvastatin generics are due to be listed on August 1.

The PBS, which offers Australians medicines subject to tough reference pricing controls, now costs the government an estimated AUD6bn (US$4.55bn) per year, accounting for roughly two-thirds of the country's drug spending. However, a recent survey has shown that expenditure has recently risen at the same rate as the US, prompting some to claim that the recent Free Trade Agreement between the two countries is impacting prices.

Largely thanks to official enthusiasm for generics and tough costs controls, the country's drug prices have been notably low by developed world standards. A recent OECD report estimated annual per capita drug spending in Australia at US$350, among the lowest of any OECD member state.