A report shows that Australians are paying three times more than residents from New Zealand to get their prescriptions drugs. The former is on average paying five times the best international price for seven medicines, which include the cholesterol drug, Lipitor.

The report from the Grattan Institute call on the government to benchmark the pricing of prescriptions drugs in Australia against prices overseas. This would lessen the price of commonly prescribed drugs in the Land Down Under.

In the past year, at least eight percent of Australians opted not to purchase prescribed drugs because they cannot afford them. It is believed that the Federal Government can save budget and patients more than $500 million per year just by making some simple changes to how the prices are set under the taxpayer-funded Pharmaceutical Benefits Scheme (PBS).

"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,” authors suggest.

The institute’s health program director, Stephen Duckett, believes that Australians are incorrectly purchasing and pricing its drugs. “Fixing this policy mess would give patients a better deal and improve the budget bottom line,” Duckett said.

Currently, the government requires drug companies to reveal how much they charge pharmacies for drugs outside patents over 12-month periods. The average price is calculated after the discounts and lessens the amount it pays for each drug. The country offers the lowest price for only three of the 19 drugs according to the report.

Sydney Morning Herald notes that the cost of 64 drugs in the country are expected to drop in April, but the report says the price drops under the current system are too slow. A new independent drug pricing authority is being suggested in order to help lower the cost of generic drugs on the PBS.

The report further suggests that rules governing the location and establishment of pharmacies have to be relaxed under the supervision of Australian Competition and Consumer Commission. It would mean an expanded role for pharmacists to offset reduced prices achieved for consumers. Pharmacists can offer drug information to patients, reassess medication usage, advise repeats, regulate doses and administer vaccinations too.

Additionally, the report said the country’s pharmacist fees and mark-ups are lower than New Zealand, Britain and Canada. The report from the Grattan Institute is scheduled to be released on Monday, March 6.

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