The Federal Health Minister has slammed the maker of Panadol Osteo for its plans to raise the price of the popular painkiller by 50 per cent, and has urged the ACCC to investigate.
Earlier this month, pharmaceutical giant GlaxoSmithKline told its wholesalers it would lift its prices for Panadol Osteo by 50 per cent on January 1. If pharmacies pass on the full price rise, consumers will have to pay $7.50 a box.
It blamed the price rise on the changes to the Pharmaceutical Benefits Scheme, which will see the government stop subsidising medications that can be purchased cheaply over-the-counter in the New Year.
“In moving to an over-the-counter business model, GlaxoSmithKline is no longer able to sustain its current pricing of Panadol Osteo,” the letter to its wholesalers said.
Minister Sussan Ley rubbished the manufacturer’s reasoning, saying the changes to the PBS imposed no extra administrative or regulator costs.
She has urged the Australian Competition and Consumer Commission to investigate.
“[The PBS reform] aims to address inconsistencies that see consumers without a prescription purchasing a common over-the-counter medicine such as Panadol Osteo or an equivalent brand for under $5 off-the-shelf or online from many pharmacies, while a concessional patient buying it through a prescription pays $7.52,” she said.
“Therefore, attempts by the makers of Panadol Osteo to link their proposed 50 per cent price increase to Government regulatory changes without any detail to support their claims can only be interpreted as an attempt to mislead consumers and pharmacists.”
Ms Ley has also urged consumers to shop around, saying there were more than 30 equally-effective paracetamol alternatives for osteoarthritis sufferers.
One in 13 Australians are estimated to be suffering from osteoarthritis, a degenerative condition that mostly affects the hands, spine and joints, according to the Australian Institute of Health and Welfare.
An ACCC spokesman confirmed the watchdog was assessing the matter and seeking more information.
“The Australian Consumer Law prohibits business from engaging in conduct that is misleading or deceptive or from making false or misleading representations,” and ACCC spokesman said.
“Generally speaking, individual businesses are free to set their own prices. However, they must not make misleading representations in relation to prices or changes in those prices, including the reasons for those changes in price.”
A GSK spokeswoman told Fairfax Media that while Panadol Osteo was on the PBS, it was restricted to making only two pricing changes in the past 10 years, despite rising costs.
Now with the shift to the over-the-counter model, she said GSK was making “necessary adjustments” to ensure there would be a reliable supply.
“The government was made aware that the decision to delist Panadol Osteo would result in an increase in cost burden for consumers as part of the consultation process earlier this year. GSK is responding to the ACCC’s requests,” she said.
Ms Ley’s public condemnation and the ACCC’s investigation has not delayed GSK’s price hike plans.
Joe Demarte, president of the Pharmaceutical Society of Australia, said people taking over-the-counter medicines on prescription for osteoarthritis, headaches and heartburn or have suffered a stroke, should urgently consult their pharmacist.
“It’s vital for these patients to contact their pharmacist or prescriber to ensure they’re aware of all medication options for managing their condition,” he said.
“Pharmacists know from previous experience that changes to PBS rules can cause confusion for patients and carers, especially during the Christmas holiday period.”
The PBS reform was recommended by the independent expert Pharmaceutical Benefits Advisory Committee and will come into force on January 1.
Panadol Osteo is among 17 types of over-the-counter medication, including common drugs for heartburn and skin allergies, to be scrapped from the PBS on January 1. The government expects to save nearly $100 million a year.
Ms Ley said the changes ensured consumers and taxpayers received the best value for the money they spend on medicines.
She also said it included introducing greater competition through the introduction of the ability for pharmacists to discount the price of a script by up to $1 from January 1, as well as significant reductions in the price of generic drugs by up to 50 per cent or more from late 2016.