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PBS changes – 1 October Price Reductions

1 October 2017 is the third Price Disclosure cycle that will incorporate the removal of originator brands from the calculation. As the originator is less likely to offer the same level of trading term discount as generics, the exclusion of the originator results in a lower average price for the drug and therefore a more substantial price reduction.

The price reductions announced so far indicate a revenue reduction of $99 million per annum resulting from the 1 October 2017 cycle, equating to an average $0.09 per script or $4,488 per pharmacy per year in lost gross profit from reduced trading terms.

Please note that as price disclosure reductions for combination drugs have not yet been published, this indicative impact analysis is based on price reductions for single drugs and combination drugs taking a direct reduction only.

As 1 October is a Sunday, for some pharmacies, this may affect their ability to receive deliveries immediately following the reduction. The Guild recommends that members discuss with their wholesaler/supplier about pre-1 October ordering, pricing arrangements and access to deliveries.

The Department of Health has published indicative price reductions for 1 October 2017. The Guild has prepared a detailed spreadsheet to assist members prepare for these price reductions by logging onto the Guild website under PBS Remuneration, Pricing and Schedule Variations.
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