City Research Online

Abstract

• In the years leading up to major Pharmaceutical Benefits Scheme reforms in 2007, it was becoming clear that the Australian government was not making the most of the potential savings that could be generated through the increased availability of generic drugs worldwide. The reforms changed the rules around how drugs were reimbursed to encourage price reductions via generic competition, but whether these policy changes would be effective in achieving their aims was debated.

• Little evidence exists to support the idea that generic competition acts to reduce prices in the Australian market. Our analysis quantifies the effects of generic competition on reimbursed drug prices in Australia since the reforms were introduced. We find that, since the latest iteration of price disclosure was introduced, generic competition causes large initial and continuing reductions in reimbursed drug prices.

• Australia’s combination of statutory price reductions and price disclosure is effective in generating savings through generic competition. Such policies could be viable options for decision makers to deliver significant reductions in reimbursed drug prices while avoiding the drawbacks of policies more hostile to domestic industry such as competitive tendering.

Publication Type:	Article
Additional Information:	© 2024 International Society for Health Economics and Outcomes Research. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
Publisher Keywords:	Australia, competition, generic, reimbursement
Subjects:	D History General and Old World > DU Oceania (South Seas) H Social Sciences > HC Economic History and Conditions R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine R Medicine > RS Pharmacy and materia medica
Departments:	School of Policy & Global Affairs School of Policy & Global Affairs > Economics
SWORD Depositor:	Symplectic Administrator

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