I have asked my Department to urgently alert the ACCC to plans by the makers of Panadol Osteo to increase their price by 50 per cent on January 1 2016.
There are no obvious market changes that justify such a substantial increase.
This includes changes to the listing of a small number (15 per cent) of over-the-counter medicines on the Pharmaceutical Benefits Scheme, which I understand impose no additional administrative or regulative costs for these products.
In fact, these changes aim to address inconsistencies in the PBS that see consumers without a prescription purchasing a common over-the-counter medicine such as Panadol Osteo or an equivalent brand for under $5 off-the-shelf or online from many pharmacies, while a concessional patient buying it through a prescription pays $7.52*.
These changes were also the recommendation of the independent expert Pharmaceutical Benefits Advisory Committee, from which this Government accepts advice without fear or favour.
Therefore, attempts by the makers of Panadol Osteo to link their proposed 50 per cent price increase to Government regulatory changes without any detail to support their claims can only be interpreted as an attempt to mislead consumers and pharmacists.
With such a dominant share of the Australian ‘Paracetamol Osteo’ market, this action by the makers of Panadol Osteo also raises questions about their intentions behind this 50 per cent price increase and at the very least requires examination.
Regardless of the outcome, this decision should not be hidden from consumers under wholesaler arrangements.
It is important consumers have the opportunity to talk to their GP or pharmacist before January 1 2016 and shop around for an alternative product if they so choose.
For example, consumers may not be aware, but there are currently over 30 equally-effective paracetamol osteo alternatives to Panadol Osteo currently registered in Australia. We hope these changes will help deliver consumers greater competition in the market. Consumers can of course register their concern directly with the makers of Panadol Osteo.
The Government’s PBS reform package is about ensuring both consumers and taxpayers get the best value for the money they spend on medicines, and also includes introducing greater competition through the introduction of the ability for pharmacists to discount the price of a script by up to $1 from January 1 2016, as well as significant reductions in the price of generic drugs by up to 50 per cent or more from late 2016.
*The $7.52 cost of a prescription for Panadol Osteo currently includes a $6.10 co-payment and a premium because it is the brand name medicine in the market, despite there being cheaper equivalents available.