Prescription drugs expensive in Australia and likely to increase

By Dr. Ananya Mandal, MDSep 14 2011

According to experts Australians are facing some of the highest ‘out-of-pocket’ costs in the industrialized world for prescription medicines and the problem is likely to worsen

After government subsidies are taken into account, the amount Australians fork out of their own pocket for prescription drugs tripled to $62 a person in 2007, from $19 in 1991. That amount increased to $134 including prescription drugs that aren't subsidized under the Pharmaceutical Benefits Scheme (PBS).

Lead researcher Anna Kemp, of the School of Public Health at the University of Western Australia, said the costs were likely to have increased substantially since then due to factors such as increasing prices and delays in the listing of some medicines on the Pharmaceutical Benefits Scheme. Dr Kemp and her colleagues found that Australia had the fourth-highest out-of-pocket patient costs in a group of 14 countries which had universal pharmaceutical subsidies.

People in Finland faced the highest costs at $US120, followed by the French ($US103) and those in the Slovak Republic ($US95). But for those in the United States and Canada - neither of which have universal subsidy schemes – the ‘out-of-pocket’ expenses were a staggering $US487 and $US262, respectively. The study did not include figures from Britain and New Zealand due to a lack of data collection in those two countries.

Dr Kemp said Australians had faced steep increases in out-of-pocket costs for medicines since co-payments for PBS medications were increased by 21 per cent in 2005 and repeated changes had been made to eligibility to a safety net scheme. “'What has happened since the 2005 and 2006 changes is that each prescription is more expensive and fewer patients with high costs are getting those safety net subsidies at the end of the year…'There's been big impacts on people with chronic illnesses and on low-income earners,” she said.

In 2008, 20 per cent of Australians in poor health reported skipping doses of medicines or not filling prescriptions because of cost. Rates of underuse were lower than those in the US, but higher than in Canada, France or Germany.

Dr Kemp said cost pressures would continue to increase as Australians consumed more prescription drugs in coming years. “We are using more medicines than we used to because we're managing chronic disease more with medicines than we used to,” she said.

Dr Kemp said the Federal Government spent about $23million a day on the Pharmaceutical Benefits Scheme and faced major challenges to ensure that all Australians had access to the medicines they needed at reasonable prices. “I would like not to see any further changes to the safety net - that's critical - and I would not like to see co-payments increasing any more than inflation…'I think the way forward is going to be things like increased competition for generics and negotiation with manufacturers to get cheaper pricing from manufacturing. The more people who are missing out on medicines, the more people are ending up in hospital and that is ultimately costing us all a lot more than keeping people well,” she said.

The study was published in the Australian Health Review journal