Australian pharmaceutical policy: price control, equity, and drug innovation in Australia.

This paper outlines the increasing salience of drug "innovation" in the debate for reform of Australia's pharmaceutical policy, particularly change to Australia's price control mechanisms. The pharmaceutical industry has consistently criticised the central role of price control in Australia's pharmaceutical regulatory regime as an impediment to drug innovation and industry growth. Despite ambivalent or contrary evidence on the impact of price control on drug innovation, this criticism, and the appeals for reform it supports, appear to be increasingly influential in directing pharmaceutical policy. This is particularly evident in the implementation of the Australia/United States Free Trade Agreement, which has led to a weakening of the historical process of evidence-based reference pricing in Australia. Should drug innovation come to dominate Australian pharmaceutical policy, there is the potential to precipitate a devaluing of the current public orientation of regulation and diminish equitable access to affordable pharmaceuticals. The manner in which trade policy has effectively undermined a publicly funded pharmaceutical benefits scheme has clear implications for many countries that maintain such programmes.

Moral hazard and prescription medicine use in Australia--the patient perspective.

All Australian citizens are provided affordable access to prescription medicines through the nation's system of universal pharmaceutical subsidies--the pharmaceutical benefits scheme. The rapid increase in pharmaceutical related expenditure has generated the concern that Australians are taking advantage of prescription subsidies and are using more medicines than are necessary, thereby creating a 'moral hazard'. This concern is predicated on a number of assumptions about patient behaviour rather than on empirical observation. These assumptions amount to a view that patients are consumers who treat prescription medicines as common goods subject to informed and rational calculation of the cost and benefits of their use. This paper reports the findings of an in-depth interview study undertaken to explore how prescription cost influences Australians' medicine use. Qualitative data were analysed to compare medicine users' descriptions of the role of prescription cost in medicine use against the assumptions that underlie the belief in moral hazard. Moral hazard did not appear to be significantly operating in the accounts of medicine use collected for this study. Interviewees' accounts of medicine use revealed an act characterised by ambivalence, a mix of desire and antipathy, faith and suspicion. Medicines appeared in interviewees' accounts as both pharmacologically and symbolically potent substances, which despite their familiarity as objects, are often mysterious to non-expert patients. Cost appeared as a secondary factor in patients' decision to access a prescription medicine. Using a prescription was predicated on the medicine being necessary, with necessity typically established by an expert doctor prescribing the medicine. Prescription medicines did not appear as 'common goods' where subsidised access motivates a 'consumer' to demand more or make the prospect of prescription use more attractive or necessary.