Drugmakers seen hit under Australia budget deal with pharmacies

Australia Health Minister Sussan Ley

In an agreement expected to hurt drugmakers more than any other entity, the government of Australia has settled a budget dispute with the nation's pharmacies. The settlement, to begin July 1, includes payments to drugstores of U.S.$2.2 billion over 5 years.

Health Minister Sussan Ley announced the deal, which the Pharmacy Guild accepted reluctantly in exchange for not opposing the budget, and also said a deal was reached with the Generic Medicines Industry Association to lower the cost of the most expensive drugs, in some cases resulting in lowering patient costs to about A$10 per prescription.

The Pharmacy Guild may be keeping its mouth shut about the budget from now on, but consumer groups argued that the deal meant patients overall would end up paying billions more for their prescriptions.

The makers of the drugs at issue opposed the deal with the Pharmacy Guild but apparently lacked the lobbying strength of the pharmacists. Under the budget plan itself, pharmas were already faced with removal of some of their products from the Pharmaceutical Benefits Scheme if cheaper alternatives are available.

- here is the story from The Guardian
- and here's the Australia Financial Review piece
- get more from Radio Australia