Combination knocking out millions from health budget
A new report says the Federal Government is wasting millions on combination medications.
A study published in the Medical Journal of Australia (MJA) says the government is losing money through a loophole that allows drug companies to make medicines using multiple generic ingredients, but sell them at full price.
Combining two drugs into one pill and charging for both costs the Pharmaceutical Benefits Scheme about $120 million per year, Melbourne University's Professor Philip Clarke says.
The author of the new report, Dr Clarkes the most common combination has been a mix of a cholesterol-lowering drug and a blood pressure drug.
“That combination would cost the Government each time it's dispensed around $70, but if you were to purchase the drugs individually it would only cost $40,” he told the ABC.
“On that drug alone it costs an additional $30 million a year for the Government to pay for these combination therapies.”
The government in the UK has stopped buying combination drugs for this exact reason.
The Federal Government is reportedly giving “serious consideration” to the issue.
Professor Clarke says with millions streaming through this loophole alone, the government should look at systemic fixes for healthcare savings, rather than charging users even more.
“I would argue that we should probably be looking at these issues first, before looking at more substantive changes that affect consumers such as a Medicare co-payment,” he said.
The Federal Government says it assess PBS drugs for cost-effectiveness.
“Efforts have been made when implementing new pricing policy to ensure companies are not disadvantaged,” a Health Department spokesperson told reporters.
“Over time it has become evident that, in some cases, arrangements put in place to avoid disadvantage can provide a windfall advantage to companies. The issue referred to in the MJA article appears to be such an instance.”