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[e-drug] Crisis in the Australian PBS (cont)

E-drug: Crisis in the Australian PBS (cont)
PhRMA includes Australia and South Africa among the 2001 'Special 
301' watch countries


Let us celebrate! Australia has joined South Africa (and other countries) on
the Pharmaceutical Research and Manufacturers of America (PhRMA) "WATCH
LIST" of countries judged hostile to multi-national pharmaceutical industry

The PhRMA list the following reasons why Australia was placed on the "WATCH

1. Our Pharmaceutical Benefit Scheme (PBS) monopsony power saves 
Australian taxpayers about $A860 million a year. The PhRMA argues 
that the
multi-national pharmaceutical industry is therefore subsidising Australian
taxpayers by this amount. [We argue that our prices are reasonable and
necessary for equitable access, US prices are too high, the U.S. industry
profits are obscene, and, as a consequence, many U.S. citizens cannot afford
necessary drugs!]

2.  The Australian PBS reimburses drugs in a common class only to the level
of the base/benchmark price product: therapeutic group premiums (TGP)
reference pricing. This has been estimated to achieve PBS savings of A$460
million over four years. The PhRMA argues this sends a negative message to
industry because prices in the Australian market are already low. In
addition, the PhRMA argues that TGP inhibits innovation and could lead to an
increased risk of non-supply.Ý[We argue that a genuinely innovative drug
will not receive TGP in Australia (this is for me-too drugs), thus
innovation is adequately rewarded.]Ý

3.  The Australian government allows "Spring boarding" by generic
manufacturers which allows them to do all necessary testing of their
products before the expiration of the innovator's patent rights. The PhRMA
argues this provision undercuts the current value of intellectual property
protection in Australia. [We argue "Spring boarding" stimulates

In the light of South Africa's historic court case (see reports below) I
believe Australia stands in good company. Equally, the PhRMA stands
condemned for its relentless and mindless pursuit of profit at the expense
of public health.

The full PhRMA report is available at:

The Copyright Amendment (Digital Agenda) Bill 2000 became effective in
Australia on 4 March 2001. The views expressed in this email are copyleft
and may be widely disseminated around the universe.

Dr. Ken Harvey, Senior Lecturer, School of Public Health,
Room 221, Building HS1 (NW9),
La Trobe University, Bundoora, 3086, Australia,
Telephone +61 3 9479 5773, Facsimile +61 3 9479 1783,
Personal mobile 0419 181910,
Internet: http://www-sph.health.latrobe.edu.au/kharvey/
"Ken Harvey" <k.harvey@latrobe.edu.au>
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