" Switcheroo ! "

The drug companies are adept at juggling their drug presentations to the Pharmaceutical Benefits Scheme ( PBS ) to maintain high profit margins and some of these scams are costing taxpayers $ 200 million a year. In particular, drug combinations are a ruse that prevents the benefits of generic drug versions reaching the public.

Often a drug manufacturer will combine the benefits of two totally different drugs to create a single pill that serves both purposes.   While this drug is under patent protection profits from it's manufacture remain high, but when the patent expires competitors are free to make a copy and offer it as a generic alternative.   They know that the patent holder will undoubtedly drop the price sharply to try and maintain market share and hence the copy will be priced to just undercut that reduced price.

The PBS  compares the price of the patented drug with the price of the individual drugs that are combined in the new product and this becomes the base price mechanism.   The generic drug industry offers copies under a host of new names, and the comparison swings away from the ingredients as a price comparison - and simply compares the price of the range of generics offered.

One of the drugs widely proscribed in Australia is an anti blood clotting drug that contains both clopidogral and aspirin.   It's price structure is $ 15.02 more expensive than buying clopidogral and aspirin separately, because the price comparison no longer compares the base ingredients.   In this way, the price of the generics is artificially high.

Drug prices fluctuate widely when compared across a mix of world countries.   They are cheaper where the laws that govern prices are constantly reviewed and industry practice is taken into account.  The drug administration needs to keep on top of the game to ensure that the price of it's pharmaceuticals is not artificially high - and a drag on the public purse.

It seems that there is scope for improvement in the area of Australian generic drug pricing !