Joshua Owide, Director of Healthcare Industry Dynamics, says: “Medicare, which is Australia’s public health insurance scheme, provides free or subsidized healthcare services to the Australian population. The Pharmaceutical Benefits Scheme (PBS) component of Medicare provides access to a wide range of necessary and cost-effective prescription medicines.
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“Other major factors driving growth in Australia’s pharmaceuticals market include the increasing elderly population and its associated disease burden, along with well-defined regulatory guidelines and the rising prevalence of non-communicable diseases due to an increasingly sedentary way of life.”
However, Owide notes that market growth has been restricted by a rise in generic substitution and cost-cutting measures adopted by the Australian government.
He explains: “Universal access, and the fact that most blockbuster drugs are covered by the PBS, has resulted in increasing government healthcare expenditure and subsequent price cuts. PBS statistics show that the government has reduced the prices of PBS-listed medicines eight times since 2012, by percentages ranging from 1% to 90%.
“The 16% drug price reductions implemented in April this year represent a loss for pharmaceutical companies, while generic substitution by pharmacists has been permitted since 1994 and has had a negative impact on pharmaceutical market growth.”
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