Taxpayers footing $200 million bill for combination therapies due to loophole

           

Rip off ... a loophole on combination medicines is costing taxpayers $200 million a year. Source: News Limited

 

TAKING one pill that combines your medication instead of two might be convenient for the patient but a “scandalous” government loophole means it is costing taxpayers $200 million a year.

And general consumers are worse off when they buy some of these treatments — such as the anti-blood clotting clopidogrel plus aspirin combination, which costs them $15.02 a packet more than if they bought the medicines separately.

A new study to be published on Monday in the Medical Journal Australia has found drug companies are using the new combination therapies to avoid government price cuts to generic medicines.

If the government acted to close the loophole it could save $800 million over the next four years, more than the $750 million it will save under its controversial plan to impose a $6 charge on GP visits.

There are currently more than 20 combination drugs on the Pharmaceutical Benefits Scheme and around 10 are more expensive to the government than if patients purchased the medicines separately.
Melbourne University Health economist Professor Philip Clarke describes the loophole as “scandalous” and “one of the greatest loopholes of all time”.

Under our medicines subsidy scheme these combination therapies are initially given subsidy approval because when they are first listed they cost around one cent less than the cost of the main treatment on its own.

But when the main treatment comes off patent and faces generic competition its price is cut dramatically under the government’s price disclosure policy.

Just before this happens the drug company that makes the combination treatment puts another brand of the combination drug on the PBS.

Under a government loophole this means the price of the two drugs in the combination treatment are no longer compared to the cheaper price of their individual components.

Instead, they are compared only to the other combination therapy listed by the same drug company at the same price and they escape any generic price cuts.

Professor Clarke says the most glaring example is the combination therapy that includes amlodipine (for blood pressure) and Atorvastatin (for lowering blood cholesterol). It currently costs the government just $76.10 a month when a patient takes this combination pill but the price to the government would be just $40.78 if the patient purchased the two pills separately.

The government is paying $54.96 for the combination treatment clopidogrel plus aspirin when clopidogrel on its own costs just $20.88 and aspirin cost just $1 a pack in a supermarket.

General consumers who buy this clopidogrel/aspirin combination drug pay $36.90 when they would save $15.02 if they bought the treatments separately.

In most cases it will always be cheaper for pensioners to buy these combination therapies because they only pay $6 for scripts.

Later this year when the price of the anti-cholesterol pill atorvastatin falls again general consumers using the amlodipine and Atorvastatin combination pill will be better off purchasing the drugs separately, Professor Clarke says.

The high prices of these medicines means the UK does not use these combination therapies even though research shows people are more likely to comply with their medicine regime using them.

Professor Clarke says a new pricing framework is needed to ensure combination therapies remain a cost effective option for the government and consumers.

news.com.au 28 Apr 2014

Aside from the fact that taxation collection in the manner that is done by the ATO is unlawful, the authorities are acting in a corrupt way, defrauding or extorting the  general populous of their personal finances.

The common understanding of rip off is fraud or theft.