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Latest news
8 May 2009
Study finds generic medicines in Australia cheaper than in the US
A recent study by Deakin University, Victoria, has found prices of generic medicines in Australia are in many instances well below the levels faced by US consumers.
Bulfone (Australian Health Review May 2009 Vol 33 No 2 p200) considered the prices of the most frequently prescribed 52 generic molecules on the Pharmaceutical Benefits Scheme. Of these, 33 molecules were found to be priced at or below the US price.
Many of these molecules are substantially cheaper in Australia than the US. For example salbutamol 100mcg oral pressurised inhaler (200 doses), a commonly used asthma medication is 385% cheaper in Australia; perindopril arginine 2.5mg tablets, a commonly used medication for blood pressure, is 260% cheaper in Australia; ramipril 5mg tablets, another commonly used medication for blood pressure, is 220% cheaper in Australia.
The study found that some items were more expensive in Australia than in the US. This is most likely due to several outdated assumptions used in the study:
- Exchange rate: The study did not use good economic practice by adopting a representative exchange rate. It uses an exchange rate of 0.94 as at Aug '08 where a more representative rate closer to 0.7 should have been used.
- Medication prices: The study uses Australian prices as at May '08. This was just prior to the Commonwealth Government's mandated price cuts of 25% on many generic medicines in Aug '08. Hence Australian generic medicine prices are already lower than assumed in the study.
The US generic medicines market is one of the most competitive markets in the world. It is a very positive finding for Australian consumers that the prices of Australian generic medicines in many cases are substantially less than US prices.
The Generic Medicines Industry Association supports and encourages debate and dialogue around the important policy area of generic medicines prices.
Kate Lynch
Chief Executive Officer