Should the government regulate drug prices more tightly?

Should the government regulate the prices of life-saving drugs?
It is an issue that resonates with many Australian's; especially those dealing with a terminal illness.

Taking an increasing amount of medication as the years advance is the norm for plenty of people. Juggling a confusing mix of pills is tricky enough, but the expense can be another worry.

According to a report from The Gratton Institute, prescription medication in Australia costs four times as much as medication sold anywhere else in the world.

These can costs can mean patients delay seeing doctors and even avoid taking necessary medication in order to conserve cash.

To illustrate the price comparison, the Grattan report noted Anastrozole (a medication for breast cancer) costs Australians $19.20 for a box of 30 one-milligram tablets. In the UK, the same amount of the drug would cost the equivalent of $2.45.

Though these figures are high, they could be higher if we did not have in place the Pharmaceutical Benefits Scheme (PBS). Consuming around 14 per cent of total government health care expenditure, the PBS regulates life-saving drugs to make them more affordable for the general public.

Ad. Article continues below.

If the PBS does this, why do we still have such highly priced medication?

Researchers Stephen Duckett and Priyanka Banerjee told the Sydney Morning Herald that they believed out-of-date policies and loopholes were to blame.

“The pharmaceutical industry is too closely involved in Australia’s current Therapeutic Group Premium Policy,” Duckett and Banerjee said. “After nearly two decades of operation in Australia, the policy is full of loopholes. It should be strengthened, so it is more like the pharmaceutical pricing policies used in comparable countries such as Germany.”

The Therapeutic Group Premium Policy, introduced in 1998, was designed to stop the government wasting money on over-priced drugs but the Grattan Institute reckons it’s been so watered-down that it no longer works. The institute points out the Medicines Australia, the pharmaceutical manufacturers’ lobby group, is closely involved with the operation of the group.

But others say that capping drug prices means research companies are robbed of the funding needed to research and develop more effective lifesaving drugs. And there are plenty of libertarians who feel the government shouldn’t be involved in private enterprise full stop.

Ad. Article continues below.

Those who want our laws on drug pricing to be toughened up, meanwhile, say pharmaceutical companies have too much power over how drugs are priced and too much vested interest to do so in a way that’s fair to the public.

Some companies also put excessively long patents on products so cheaper alternatives can’t be made for low-income patients. 

Read More: Simple tips to help you save money on your meds

Which side of the debate are you on? What approach would you take to this issue? What do you think of our current drug prices? Should our laws be strengthened or relaxed?