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Don't make medicines dearer.

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DEMOCRATS MEDIA 05/024 TUESDAY 25 JANUARY 2005 SENATOR LYN ALLISON LEADER OF THE AUSTRALIAN DEMOCRATS AND HEALTH SPOKESPERSON DON’T MAKE MEDICINES DEARER The Australian Democrats warn that the Government’s PBS ‘Reform’ could wipe out generics, increase drug prices and stop new medicines from reaching sick Australians. Democrats leader and health spokesperson, Senator Lyn Allison, today warned that the Government's proposed 12.5% reductions in PBS subsidies threatens to dismantle the generic drug industry, drive small pharmacies out of business and ultimately increase the price of drugs for all Australians. ”The Government election announcement to reduce PBS subsidies for newly listed medicines was done without consulting industry or assessing the impacts. The proposed changes represent the most significant policy reform to the PBS in 20 years and yet consumers and industry are still being kept in the dark about how this is expected to work and what the effects are going to be,” she said. “The Government’s proposals need proper scrutiny and the Democrats will refer the legislation to a Senate committee for investigation. “The generic products rely on small profit margins and these arbitrary cuts could price them out of the market, paving the way for a complete monopoly by the more expensive brand name drugs. "It is also highly likely that pharmaceutical companies will decide to make some new brand drugs unavailable in Australia. This will certainly save money but what about the patient cost?” "In the current system, drug prices are negotiated on the basis of effectiveness. A decrease would cut right across this process." "A 12.5% cut to PBS subsidies could also reduce the income of pharmacies and, for those with small turnovers, could spell the end of their business." ”The PBS is the fastest growing part of health spending and we need to make sure that it is sustainable. If there are going to be reforms however, it shouldn’t just be rushed through. "Instead of this cut, the Health Minister Tony Abbott should look for cost savings in PBS leakage (where expensive drugs listed for certain conditions are more widely used), introducing price volume caps and in tendering out the wholesale distribution of drugs, for instance. “The $830 million over 4 years that the Government plans to save will be paid for firstly by the sickest and poorest in our community, and then by everybody else as costs of generic drugs rise.” Media Contact - Daele Healy 0419 867 649