[e-drug] Article on Australias pharmaceutical sector

["E-drug" <e-drug@healthnet.org>]

E-DRUG: Article on Australias pharmaceutical sector
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Morgan S, McMahon M, Greyson D. Balancing health and industrial policy
objectives in the pharmaceutical sector: Lessons from Australia. Health
Policy 2008; 87(2): 133-145. doi:10.1016/j.healthpol.2008.01.003

Centre for Health Services and Policy Research, Department of Health
Care and Epidemiology, University of British Columbia, Vancouver, BC,
Canada.

INTRODUCTION: Policy-makers worldwide struggle to balance health with
industrial policy objectives in the pharmaceutical sector. Tensions
arise over pricing and reimbursement in particular. What health plans
view as necessary to maintain equitable access to medicines, industry
views as inimical to R&D and innovation. Australia has grappled with
this issue for years, even incorporating the goal of "maintaining a
responsible and viable medicines industry" into its National Medicines
Policy. 
METHODS: This case study was conducted via a narrative review that
examined Australia's experiences balancing health and industrial policy
objectives in the pharmaceutical sector. The review included electronic
databases, grey literature and government publications for reports on
relevant Australian policy published over the period 1985-2007. 
RESULTS: While pharmaceutical companies claim that Australia's pricing
and reimbursement policies suppress drug prices and reduce profits,
national policy audits indicate these claims are misguided. Australia
appears to have secured relatively low prices for generics and "me-too
drugs" while paying internationally competitive prices for
"breakthrough" medicines. Simultaneously, Australia has focused efforts
on local pharmaceutical investment through a variety of
industry-targeted R&D incentive policies.
DISCUSSION: Despite the fact that policy reviews suggest that Australia
has achieved balance between health and industrial policy objectives,
the country continues to face criticism from industry that its health
goals harm innovation and R&D. Recent reforms raise the question whether
Australia can sustain the apparent balance.

PMID: 18295927 [PubMed - as supplied by publisher]

Keywords: Health policy; Industrial policy; Pharmaceutical policy;
Pharmaceuticals; Australia

Article Outline
1. Introduction
2. Methods
3. Results
3.1. Australia's National Medicines Policy (NMP)
3.2. Health-related policy goals: timely and affordable access to
medicines 3.3. Industry-related policy goals: responsible and viable
pharmaceuticals industry 3.3.1. Generic economic development policies
3.3.2. Pharmaceutical sector-specific economic development policies
3.3.2.1. Factor f scheme 3.3.2.2. The pharmaceuticals industry
investment program (PIIP) 3.3.2.3. Pharmaceuticals Industry Action
Agenda 3.4. Industry criticisms and evidence of policy impacts 3.4.1.
Pharmaceutical prices in Australia 3.4.2. Profits to firms 3.4.3. A
hostile investment environment? 4. Discussion 4.1. Postscript
Acknowledgements References Table 1.

Ratio of Australian price to foreign price, 2000 (weighted results a)

Source: ref. [35].

a. The estimates are based on the lowest and highest list price of
manufacturers supplying the matched molecules. The results use an
Australian basket of the most popular molecules and are weighted by
Australian sales volumes. As the bilateral comparisons are based on
Australian consumption patterns and different bundles of pharmaceuticals
for each country, the results do not provide a good guide to relative
price levels across other countries. The Australian to US price ratio
may be higher than reported here because of the practice of discounting,
which is thought to be more widespread in the US than in Australia. b
Includes both generic (copies) and originator brands that are
off-patent.