Generic drug prices and policy in Australia: room for improvement? A comparative analysis with England.

Objective To assess the degree to which reimbursement prices in Australia and England differ for a range of generic drugs, and to analyse the supply-and demand-side factors that may contribute to these differences. Methods Australian and English reimbursement prices were compared for a range of generic drugs using pricing information obtained from government websites. Next, a literature review was conducted to identify supply-and demand-side factors that could affect generic prices in Australia and England. Various search topics were identified addressing potential supply-side (e.g. market approval, intellectual property protection of patented drugs, generic pricing policy, market size, generic supply chain and discounting practices) and demand-side (consumers, prescribers and pharmacists) factors. Related terms were searched in academic databases, official government websites, national statistical databases and internet search engines. Results Analysis of drug reimbursement prices for 15 generic molecules (representing 45 different drug presentations) demonstrated that Australian prices were on average over 7- fold higher than in England. Significant supply-side differences included aspects of pricing policy, the relative size of the generics markets and the use of clawback policies. Major differences in demand-side policies related to generic prescribing, pharmacist substitution and consumer incentives. Conclusions Despite recent reforms, the Australian Government continues to pay higher prices than its English counterpart for many generic medications. The results suggest that particular policy areas may benefit from review in Australia, including the length of the price-setting process, the frequency of subsequent price adjustments, the extent of price competition between originators and generics, medical professionals' knowledge about generic medicines and incentives for generic prescribing. [ABSTRACT FROM AUTHOR]