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STANDING COMMITTEE ON COMMUNITY AFFAIRS
15/06/2007
National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2007

CHAIR —I welcome members of the Generic Medicines Industry Association. Do you all work for different companies?

Ms Ford —I am the executive director of the GMiA. All of the other witnesses work for different companies that are members of the GMiA. They are all here today to represent the GMiA.

CHAIR —Would you each name the company you work for.

Ms Kim —I work for Alphapharm, which is a member of the GMiA.

Mr Smith —I work for Generex, which is a member of the GMiA.

Dr Pearce —I also work for Alphapharm.

Ms Ronai —I also work for Alphapharm.

CHAIR —I invite you to make an opening statement before we ask you questions.

Ms Ford —The GMiA thanks the Senate for the opportunity to outline our sector’s concerns about this bill. GMiA represents the manufacturers of prescription generic medicines listed on the PBS. Generic medicines are alternative brands to the originators’. They trigger price reductions on the PBS. They are not originators’ brands whose patents have expired. GMiA strongly supports the PBS, which delivers equitable access to affordable life saving medications at a cost that the community, the taxpayer and the individual can afford.

Since the commencement of the legislation allowing generic substitution at the pharmacy level in 1995, generic medicines have saved the PBS more than $2.8 billion by reducing the benchmark price of medicines. The government’s stated purpose for this bill is to establish pricing structures that will enable the government to achieve greater savings in the price it pays for medicines into the future. GMiA supports this principle but is concerned that the proposed bill does not actually meet these objectives. It is contradictory and it undermines the fundamentals of the PBS and, therefore, it is flawed.

In the short time available today, my colleagues and I will highlight key points from our submission. With regard to the fundamental impact on the PBS, the basis of the PBS is to provide universal, subsidised access to medicines to the Australian community. Medicines are provided to consumers to improve their health and, therefore, the value of a medicine to our society is determined by the health benefit it provides to a person taking it. Reference pricing is a system for comparing measured health outcomes and it is a mechanism by which the government determines how much it pays for a medicine. Reference pricing ensures that the government never pays more than is warranted by the health outcome a medicine provides.

Apart from savings to the PBS to date from generic substitution and reference pricing, further savings in the order of $8 billion during the next four years would be possible under the existing reference pricing system—and we have provided to you data from the work Econtech did for us two years ago. However, this bill dismantles reference pricing as we know it and may deliver savings of only half a billion dollars over the same period. Sadly, by eliminating the ongoing price link between patented medicines and medicines that produce the health outcome but are no longer patent protected, Australian taxpayers will be paying higher prices for essentially the same health outcomes. I will ask Mr Pearce to fully explain the point on health outcomes.

Dr Pearce —For the past 14 years, since there was a change in the National Health Act to introduce consideration of cost and effectiveness, Australia has essentially had a reference price system. That means that, for a new drug, you have to compare the health benefits gained from that drug and the health benefits gained from an existing drug on the PBS. The system operates by rewarding improvements in health outcomes by price premiums above existing products. The alternative is that if you show that your health benefit is essentially similar to that of an existing product then you cannot justify a price premium. One of the concerns we have is that the development of the two formularies—formulary 1 and formulary 2—breaks the nexus we have at the moment, and that shifts the reward for innovation from improvements in health outcomes to enhancements in molecular structures or physical changes. Essentially, that is one of our concerns about the two formulary systems.

Ms Ford —The bill undermines reference pricing, yet it is inconsistent in the case of combination products. These are not included in the formularies, and reference pricing is appropriately preserved. In the combination products we still have reference pricing, and we think that is how it should be. This is an unequivocal inconsistency and we urge the committee to recommend the reinstatement of reference pricing across and between all formularies.

I will now move to evergreening. Evergreening is the practice of unfairly extending the patent life of medicines through process or formulation patents to insulate them from generic competition. This delays generic entry to the market. Generic entry to the market on patent expiry is the single most effective brake on PBS expenditure. The creation of the formularies and the delinking of pricing between the two formularies will encourage evergreening. This will, paradoxically, increase PBS costs and make a mockery of Australia’s robust intellectual property regime. GMiA supports a strong intellectual property regime. However, we need to differentiate between patentable innovation and health outcomes because, to date, the PBS has purchased on the basis of health outcomes and this is now under threat. Do you have any more to add to that, Greg?

Dr Pearce —You can debate whether it is right or wrong, but for 14 years the PBS has valued health outcomes above all else. With this bill we are saying, ‘Let’s look at protecting molecules that have patents,’ and rewarding that innovation rather than rewarding health outcomes innovation. That is the dichotomy we have at the moment with this bill. We are moving away from purely rewarding improvements in health outcomes, through price premiums, to rewarding the patentability of a molecule through higher prices. I am not debating whether that is right or wrong, but that is the way it is going to be. For 14 years we have operated on a process that has rewarded improvements in health outcomes. We are now considering rewarding improvements in health outcomes and also the patentability of follow-on compounds. To me, that may erode the efficiency of the system as it stands at the moment.

Ms Ford —So to ensure that the PBS pays only for health outcomes and not for frivolous patent extensions, we again urge the committee to recommend the reinstatement of reference pricing across and between all formularies.

I will now move to the uncertainty for industry. This is an important point for a lot of us, not just the generics. In order to be able to plan ahead for the significant magnitude of the proposed mandatory reductions, the industry needs to have some certainty about the starting point for some of these changes. In projecting the savings forecasts for this program, the government used the schedule of pharmaceutical benefits current as at 1 December 2006. We urge the committee, to recommend that the same schedule be used as the starting price for statutory price reduction calculations. Also, this bill is silent on the details of how price disclosure will operate. The industry’s concern about the procedural aspects of disclosure is driven by the lack of transparency in the methodology and processes being proposed. We have already outlined this to the Department of Health and Ageing in the consultations we have had with them. This uncertainty will be very damaging for the local generic medicines industry, which guarantees Australians a reliable local supply of affordable prescription generic pharmaceuticals and an ongoing source of PBS price containment. I repeat the word ‘local’ there because, as was raised earlier in comments by the Pharmacy Guild, 80 per cent of generics dispensed in Australia are manufactured in Australia. That is what will be put under threat.

While the details of how the disclosure policy will actually be implemented are not included in the bill and, therefore, are not strictly a matter for this inquiry, we nevertheless urge the committee to seek assurances from the Minister for Health and Ageing that industry’s concerns are addressed properly prior to the commencement of the legislation.

On the question of appeals, GMiA has obtained legal advice, which it has made available to the committee, which raises concerns about the lack of an appeals process under the new arrangements. What will be different under this bill is that many of the major parameters of the PBS will be set by ministerial determination and, as such, will be a reviewable by the courts and tribunals. We would like the committee to recommend that an appeals process be included in the bill.

I will now move to the impact on consumers—and consumers, not our companies, are the reason why we have the PBS in the first place. True PBS savings, under the new legislation, will not flow in total onto consumers. The savings from this bill are unlikely to be lasting. Our calculations show that consumers may only benefit to the tune of  between four and 17 per cent whereas the government will reap a minimum of 25 per cent. Whilst the bill requires that premiums be reduced at the same time and by the same percentage as a mandatory price reduction, an originator company is able to increase its premium by that same amount, or even more, four months after the event or even prior to the event.

The point to remember when we are talking about the impact on consumers is that 83 per cent of consumers will not see any change because they are concession card holders. It will affect that 17 per cent of people on the general list who access the health system. As we know from other research, many of them are from lower socioeconomic backgrounds. So the people who are at risk are those low-income working families—and I am sure you all have plenty of those in your states and territories. To ensure that consumers are not disadvantaged by these changing prices, we urge the committee to recommend an incentive for consumers to choose generics—such as a discounted co-payment, which has been mentioned earlier today—and at the same time become active partners with government and industry in sustaining the PBS.

We also suggest that the $1.50 payment going to pharmacies is going to benchmark price products, which is generics. They can be off-patent originators who, as I said earlier, do not trigger price reductions on the PBS. So we think that that $1.50 actually should be paid when a pharmacist dispenses a true generic—or a genuine generic, as one of the earlier speakers said this morning.

We welcome the government’s initiative to undertake a generic medicines awareness campaign as an important for step in informing consumers about the choices available to them. We strongly support the government’s aims for that campaign.

In summary, GMIA’s position is this: (1) sustainability of the PBS is paramount; (2) reference pricing should be retained in the current format; (3) evergreening should not be encouraged; (4) uncertainty for industry should be reduced; (5) concerns surrounding disclosure should be addressed prior to the bill’s implementation; (6) an appeals process should be included in the bill; and (7) an incentive for consumers to choose generics should be included in the bill. Thank you. My colleagues and I are now happy to answer your questions.

CHAIR —Thank you very much for your opening statement.

Senator POLLEY —Thank you for your evidence and your submission. In your opening statement you touched on the effect that it is going to have on low-income families in our community. Could you elaborate on that a little further and explain to us how you perceive the impact will be on pensioners and whether there are other groups within our community that are going to be disadvantaged with this legislation?

Ms Ford —Pensioners should be okay, because they are concession card holders. I do not know of any products—there may be a couple—that do not ever drop below that pensioner copayment level. So, if the pharmacist dispenses a generic, they will see no change, as is the case now. Unfortunately, according to the numbers stated earlier by Ken Harvey, there are a large number of people out there who are unwittingly paying brand price premiums. If they get the generic, they will not be affected. It is those people using those products that fall below the general copayment level where the concern lies. Although it is expected that those prices will fall, there is no guarantee or no audit process from government to monitor that.

We know that pharmacy mark-ups are going up for most of those products—from 10 per cent to 15 per cent. So there is a built-in increase to start with. One would hope that the pharmacist would not load up the price, but there are plenty of examples they do. When we have gone into get our own scripts sometimes—it is amazing; it comes to something like $29.90. There are instances. There is no control over these prices. They are not supposed to go above the copayment level, but there is anecdotal evidence that they can do.

CHAIR —Can you explain how this legislation makes that more likely to happen?

Ms Ford —Because the mandatory price increases are going to put a lot more products down below the general copayment level. It has always been an issue, but there is going to be a hell of a lot more products that are falling below that general copayment level as result of these mandatory price reductions starting in August next year.

CHAIR —Thank you.

Senator CAROL BROWN —You touched on evergreening in your submission and also there is some evidence given earlier today. Can you elaborate on how you believe this legislation will encourage evergreening and also how, if there is a rise in evergreening patents, how they will affect PBS growth?

Dr Pearce —It is my understanding that the majority of medicine on F1 are medicines that have a current patent. Patentability has nothing to do with improved health outcomes. Dr Harvey gave a nice illustration with citalopram and escitalopram. Escitalopram has a patent, citalopram does not. Escitalopram and citalopram, under the government’s own therapeutic relativity statement, are equivalent. Ten milligrams of escitalopram is equal to 20 milligrams of citalopram. There is no differentiation in the health outcomes that they deliver, therefore the price offered is the same. If you restrict one to F1 and the other to F2, the F1 product will not be exposed to any competition or price reduction on generic entry. Most companies have a series of compounds in similar therapeutic categories that have changes in their chemical characteristics, their physical characteristics, that allow them to patent those products. In some cases they provide an improved health outcome, in other cases they do not. So just because they are patented does not mean that they deliver innovation.

At the moment we have this double system, where patentability is judged on innovation to a molecule structure and the PBS judges innovation by the delivery of improved health outcomes. So there is this dichotomy. It does not necessarily mean that they are interconnected. You can have a patented drug that delivers large improvements in health outcomes, and some of the newer medicines that have been approved recently demonstrate that. At other times you can have a third or fourth compound coming into a new class, like an ACE inhibitor, that delivers exactly the same health outcome and therefore should be priced exactly the same as the existing products. That is where you are losing a bit of traction and leverage within the current system to exert price changes and it allows the opportunity for companies to bring in compounds that are patented but not necessarily innovative in the sense of improving health outcomes.

Ms Ford —Because the F1s are not going to be subjected to mandatory price reductions, companies have been, and increasingly will be, bringing in other patents to cocoon that original molecule. They cocoon it by a series of other patents so that it is protected. They hope that will make it difficult for the generic to plot its way through those cocooning patents to get to the molecule patent and then bring out the bio-equivalent of that molecule. So there will be all these road blocks along the way, called patents, on processes or formulations or whatever it is to protect that molecule, because we can only do a bio-equivalent study against that molecule.

Senator MOORE —Which they are already doing.

Ms Ford —Its patent is expired but it is protected by all these others.

Ms Ronai —The establishment of the two formularies provides an incentive for companies to keep a drug for as long as possible in the F1 formulary. That is evergreening.

Senator CAROL BROWN —Has the association produced any work about what the effect on PBS growth may be?

Ms Kim —Yes, it is highlighted in our paper by Econtech. Looking at all the patent expiries until 2010, if you keep the current reference pricing system across and between F1 and F2 formularies you potentially have an $8 billion saving, and that is through other tools like WAMTC and the TGP. The proposed legislation breaks that link—there is no link going forward between F1 and F2. There is also talk of breaking links between patented products and unpatented products that are in a therapeutic group within F2T. If that were to happen you would get half a billion in savings in that same time period. So you are comparing $8 billion to half a billion on the same patent expiry. That is based on current sales and market dynamics. That paper has been provided for you.

Ms Ford —We have not done any calculations on what evergreening would do because my members spend their time trying to find a way through and a lot of them finish up in court, as we know. They hope that they will find their way through but it is becoming increasingly difficult. Australia is behind the rest of the world with this current avalanche of patent expiries because in 1998 the government allowed patents to be extended by up to five years. So there was a drought of patent expiries from 2000 to 2005 and we have only just started to see patent expiries come into play again now. There has not been a lot of evergreening apparent out there in the market because the patents have been protected by extended patent entitlements. That is starting to happen now and you will see it happening in the future, but there are some very good examples already out there of products—

Ms Kim —You have citalopram and escitalopram. You have emeprazole and Nexium, which is the isomer of that. You have perindopril—that was changed. So there are examples in the industry which you could pull out. We have not done that for today.

Ms Ford —The perindopril one did not work because that was managed by the TGA, but there was a direct attempt by the company involved, which had originally patented perindopril, to evergreen that product. I think aspects of that are still in court.

Senator BOYCE —You spoke about some of the difficulties of getting generics into the market, but we heard evidence earlier today that Australia has one of the lowest rates for the dispensing of generics. Would you care to talk about what you perceive to be the issues there?

Ms Ford —There is no price signal for generics for consumers in Australia as there is in other parts of the world. Doctors do leave scripts open—97 per cent of scripts are left open—but the same amount is not being dispensed as generics because there is no price signal to consumers. It is the biggest wrong.

Dr Pearce —At the moment the price signal and the price benefit go to the government and the pharmacists in general. You pay your copayment regardless of whether or not you get a generic.

CHAIR —Can’t the industry send those price signals? You do not have to charge at that level; you could charge below.

Ms Ford —It has nothing to do with the consumer. Our relationship is with the government, not with the consumer.

Dr Pearce —The government is buying it?

Ms Kim —Yes, the price is set by the government.

Senator MOORE —You do not sell direct to people; you sell to the government?

Ms Ford —No-one sells direct to people; everyone sells to the government.

Senator MOORE —So you cannot control the cost?

Ms Kim —No, and you cannot advertise prices for pharmaceuticals to consumers in Australia.

Senator MOORE —Do you think the education campaign that you talked about would help—and I am sure Senator Boyce would be interested as it seems to follow?

Ms Kim —Yes, I think so.

Ms Ford —It certainly would help people have a better understanding of the bioequivalence issue.

Ms Ronai —The equivalence of generic medicines.

Senator BOYCE —Have you done any modelling on the anticipated effect of that advertising?

Ms Ford —No.

Ms Kim —It is too early at this stage. But there is a committee so all the stakeholders’ views will be taken into consideration. A working group is looking into that campaign.

Ms Ford —It is a rather immature market here in Australia and patent extension has delayed those patents expiring. In other parts of the world that has been happening sooner. But other parts of the world have specific generic policies. In the States all the insurance companies say that if there is a generic available it must be dispensed over and above any other. That is what the insurance companies in the States will say. In the UK they have fund holding for doctors and they have generic prescribing. Consumers in the UK will go in and ask, ‘Can I have my simvastatin?’ Here they will go and say, ‘Can I have Zocor or Zimstat?’ They will not call it simvastatin, which is its name.

We have put forward, through TGA working groups, that one of the problems is the packaging requirements. We say that the guidelines are now there but, unfortunately, they are not being generated into legislation as far as the proposed changes that are coming in with the Australia New Zealand Therapeutic Products Authority. The TGA guidelines say that the active name should be as prominent as the brand name. People should know what medicine they are taking. Brand is not what they are taking, and Dr Harvey talked about that. Your body does not know what the brand is. That is a very good point. Consumers should know what medicine they take rather than what brand they take.

We think all those things would go towards the uptake of generics. Remember, the generics are the sustainers of the PBS. We are the ones who bring in price reductions; it is not the off-patent originators. If the generics do not come on board, the price stays where it is. Under these new arrangements the price will most likely stay where it was 15 years earlier when they first entered the market because there is no reference pricing for them.

Senator ALLISON —In putting forward this bill, the government argues that the reason for it is that generic medicines in Australia are a much higher cost to government than they are in other countries. They have provided us with some comparisons. What do you argue is the reason for the higher comparative cost in Australia?

Ms Ford —One of the reasons is a historical reason. There is no generic policy here in Australia. There is nothing to encourage competition between generic companies in Australia. There is nothing in there that creates that competitive edge that happens in other parts of the world. We have just done some work on this—we have yet to publish this; it is early work—and we have found that in some of the comparisons between the products in the UK and Australia the prices are 400 per cent higher in the UK than they are here. So you can pick and choose. You can cherry-pick your prices, and that is what happens. The prices that the department has obtained from websites around the world are the published prices; they are not the negotiated prices. That is an important point to make.

Senator ALLISON —Are you able to provide the committee with other comparisons? You say that the government has cherry-picked. Could you give us a full list of comparisons?

Ms Ford —We have done some initial work. We can see what we can come back to you with on that. A lot of these prices are commercial-in-confidence.

Ms Kim —Can I add one comment there. We are not aware of what data has been disclosed by the department.

Senator ALLISON —It is in their submission, so it is available.

Ms Kim —The price in Australia that is listed on the PBS is DPMQ. That includes the pharmacy mark-up and the dispensing fee et cetera. I think we will have to go back, compare those prices and come back to you with some examples.

Ms Ford —A very good example was when fluoxetine went off patent some years ago. That is Prozac. Its price fell very quickly, with generic competition, by about 30 per cent. Omeprazole was another one. The prices do come down when there is some competition. But, as I said, this patent extension has delayed a lot of the activity. The cost of doing business for a generic company in Australia is just the same as it is for an originator company. You have to pay the same wages. You have to pay the same price for your packaging, your printing and everything else. In actual fact, for a generic to get into the market is slightly dearer in Australia than it is for an originator because they have to challenge a patent in the courts to start with. An originator does not have to do that. Their initial cost up-front is their TGA registration fees.

Ms Kim —I think it is very dangerous to look at different countries in one segment of the PBS, because they have other drivers and other mechanisms which control their funding. In the UK you have doctors who are accountable to a budget. So there are certain different drivers that play into the dynamics of the industry. In Australia you need to look at that the totality of what cost benefit it derives for the health outcomes rather than asking: ‘Are we getting the right price?’ How do we determine the price? That is set by PBAC. If they are saying that it is cost-effective then that is the benchmark for Australia, given due consideration to all of the other environments that are at play in our industry. There are some medicines where probably the cost of the drug that we would be charging would be a small fraction of the dispensing fee, the margins and all the other logistics costs that are added on to the market. So the final price is a mixed bag of different prices.

Senator ALLISON —I understand.

Dr Pearce —One of the things that has got lost a little bit for all the industry in Australia is the fact that we do have a National Medicines Policy. One of the arms of the National Medicines Policy is to encourage a responsible and viable industry—that is, industry in a broader sense, which includes innovative, generic and biotech. There used to be mechanisms whereby research, development and investment in Australia could be rewarded other than directly through the price determined by the cost-effectiveness consideration by the PBAC. That is something that is lost. It has always disturbed me that we have moved a little bit away from trying to encourage and foster a viable Australian industry—a broader industry than just big-farmer generics—as well as the burgeoning biotech industry in Australia. That is something that is not being incentivised at the moment through the PBS process. We are now having to rely much more on manipulation of the pricing arrangements, based purely on comparative cost-effectiveness and patentability, rather than on what level of investment the company has made in employing Australians, investing in Australia and conducting research in Australia. I would personally like to see some more of that factored into the way that we price all pharmaceuticals.

Senator ALLISON —I would like you to respond to another important point that the government has made in terms of justifying this legislation—that is, that higher prices for generic brands are caused by heavy discounting to pharmacies, that this whole process is less than transparent and that this bill would clean up that act, as it were. Could you respond to that?

Ms Ford —Our members give discounts because there is no generic policy in Australia. There was no policy once the government, back in 1995, made substitution allowable. That was really substitution on the government’s side of it. It was to make it legal for the pharmacist to get money back from the government. The pharmacy boards in each state legalised the practice of it. It is not generic substitution as such; it is brand substitution. In those days the originating companies brought multiple brands of their own molecule onto the market to expand their market share, and generics came in on the back of that to Australia. Discounts were given after the 1995 change, when consumers were told that they then had a choice to ask their pharmacist whether they could have the less-expensive medicine, that they did not want to pay the brand price premium. They could ask, but there was nothing to compel the pharmacists to stock generics on their shelves. So generic companies incentivised their pharmacists to stock generics, so that they were there for consumers if they asked for them. Basically, that is how it happened. There was no policy. There was never a government requirement for a pharmacist to stock a generic.

Historically in Australia, doctors prescribe by brand. They write a brand on your script; they do not write the medicine name on your script. So the pharmacist stocks what his local doctor writes on the script, which historically was an originator product. So, if we were to make generics available for the consumer, something had to give. That is how generic companies came to these trading terms with pharmacists to stock generics: so that the consumer had access to less-expensive medicines. In the intervening 12 years, since the GMIA began—six years ago—we have lobbied hard for a specific generic policy. Unfortunately there is not one here yet.

Ms Kim —What we are presenting here today is the fact that the generics industry can save the PBS $8 million, but that is on the provision that the existing reference pricing, which is about health outcomes, remains. Senator, we noted your comment earlier to the Pharmacy Guild President that $1.50 is indeed designed to replace that discount. We agree with all of that part of the legislation. What we are seeking here is for the reference pricing system to remain in place, because the $2.8 billion in benefits that the generics industry has delivered over the last 10 years can actually be $8 million, not half a billion until 2010.

We are seeking clarity for consumers because there are no price signals for them. They need to embrace the PBS for themselves. They need some signals that make them active participants rather than being sideline observers. You have heard this morning from several speakers that none of the consumer groups or academics in the medicines access working group have been consulted. GMiA members have also been part of the PBS reform team, which has been meeting since January in year. On a number of occasions we have made requests to have access to information that has been discussed at this group, because obviously that impacts on some of our products as well. We have not even been given the chance to review the minutes. It is still being vetted by the department and the AMA.

Senator ALLISON —There is a new group to be set up, is there not, for consultation? You are presumably not on that either.

Ms Ford —That is what we are talking about.

Ms Kim —We are not aware of that.

CHAIR —Can I just ask you to clarify briefly: you say that instead of the half a billion dollars that this bill foreshadows saving—

Ms Kim —Up to 2010.

CHAIR —it is possible to save $8 billion.

Ms Kim —Yes.

CHAIR —And that is through retaining reference pricing?

Ms Kim —Yes, and all the tools that are currently in place now across and between the formularies.

Ms Ronai —The creation of the two formularies does not maximise the savings to government.

CHAIR —Can I just be clear about your position. Are you saying to the committee that you oppose the bill or that you support it only if it is amended as you suggest or that you support it whether it is amended or not?

Ms Ford —We do not support the bill in its current form.

CHAIR —So if it is not amended you would oppose the bill.

Ms Ford —We do not have a vote, so we cannot do much about that, unfortunately.

CHAIR —No, but your opinion is important.

Ms Ford —However, we do not support the bill in its current form. We believe it should be amended, along the lines we said, to retain reference pricing. If you fixed up some of those issues around the formularies, it would make it even less attractive to evergreen as well. We believe that consumers should be given the opportunity to buy into their own scheme, their PBS. It is not the guild’s PBS; it is not the PBS of companies who are members of Medicines Australia. Nor is it my member companies’ PBS. It is the consumers’ PBS and they do not even get a tiddlywink in there. They are not there.

Senator ALLISON —Do you put a figure on the discount you are suggesting for generics in the co-payment? I just quickly looked through your submission and could not find it.

Ms Ford —No, we do not. I looked at it. If everyone switched in one fell swoop, it would probably be—based on PBPA figures—around $30 million a year. But of course that would not happen, because consumers—

Senator ALLISON —I am sorry; what would you reduce the co-payment by?

Ms Ford —I would reduce it by about 50c. It would be around the $30 million mark if everyone switched to a generic. That would not happen, because people still have the right to choose what they take.

CHAIR —We are going to have to leave it there. Thank you very much for the evidence you have provided today and for the submission that you have offered to the committee.

Ms Ford —Sorry, it is 50c we are suggesting.

[11.44 am]