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<<US drug companies have long opposed schemes like the PBS, which delivers some of the lowest medicine prices in the developed world. They argue that the PBS systematically drives down what they can charge, undermining global pricing power and limiting their ability to recoup the high costs of research and development.
On Monday, Albert Bourla, chairman and chief executive of US pharmaceuticals giant Pfizer, told Goldman Sachs’s global healthcare conference that he was hoping Trump’s Most Favored Nation pricing proposal would deliver cheaper medicines for US consumers on the one hand and, conversely, an increase in international drug prices.
Asked whether governments in Europe and the United Kingdom, which employ subsidy programs similar to Australia’s, could pay more for medicines, Bourla was adamant that they could.
“Yes, they can increase prices,” Bourla said. “Are they willing to do it? Of course not. They don’t. They are having, let’s say, free-riding, all these years, and they want to continue that.”
Bonny Parkinson, associate professor at Macquarie University’s Centre for the Health Economy, says it’s no surprise pharmaceutical companies are delaying new listings on the PBS in response to the uncertainty triggered by Trump’s May 12 order.
Each submission to the Pharmaceutical Benefits Advisory Committee requires a substantial investment of time, data and resources, she notes, making companies wary of proceeding while global pricing rules remain in flux.
“Our own research has said, on average, it costs about $830,000 per submission,” Parkinson tells The Saturday Paper. “So yeah, it is a large investment and if there’s going to be uncertainty here, it makes sense that maybe you would want to hold back on putting in and spending that money until the environment is a little bit more known.”
In the end, says Parkinson, the whole PBS process is like one big, protracted negotiation.
“I think the government does have to weigh up how much they’re willing to spend on medicine versus other parts of the healthcare system but also other demands for taxpayer-funded services,” says Parkinson.
“So the reality is that there are trade-offs. There probably is some capacity in the system to pay a little bit more, but if we’re paying more for medicines, it does ultimately mean either we’re taxing people, the Australian population, more or, alternatively, we are forgoing something else such as giving hospitals less money or forgoing preventative healthcare services.”
Still, in the view of Griffith University Professor Paul Scuffham, one of Australia’s leading health economists, the price Australia pays for drugs listed on the PBS is fair.>>
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