Australia and New Zealand are two neighbouring nations who possess much amount of similarity in terms of economic policies as well in terms of geographical topologies too. Over the years, a distinct feature that has become prominent within two countries is pharma economics and it mainly deals with the medical policies in the state (1). Though, in case of policies, these two economies differ by a moderate extent, yet there are similarities within the policy framework too (2). This present study will demonstrate the difference between the medical policies provided by the two countries to their citizen and analyse the same in terms of different parameters. In order to do so, the study will initially explain the different medical policies of the aforementioned nations and then provide a critical analysis of the same.
Australia and New Zealand has their own medicinal policies in order to provide medical assurance to their native citizens (3). As the model to provide subsidised patient access system, New Zealand during 1993 established the PHARMAC or the Pharmaceutical Management Agency of New Zealand (4). Key role of the organisation was to decide whether the medicinal service of the state will be subsidised or not. With the empowerment by the government to negotiate prices with the manufacturers of the Pharmaceutical PHARMAC provides rebates on the price list of the same. In addition to this, it acts as the bridge between the patient and pharmaceutical manufacturers by providing bundle agreements, tendering for the generics and reference pricing in order to reduce the price of expensive new drugs against the price reduction of the other supplied drugs (5).
on the other hand, it can be seen that Australia have their own Pharmaceutical Benefits Scheme (PBS) which is entitled to provide subsidised prescription drugs to the native population of the Australia (6). Though the PBS was stablished back in 1948, yet it has come into full force since late 1970s. Initially there were only 140 lifesaving drugs with the PBS scheme, however, over the year it enhanced gradually (7). As of 2003, there were 601 different drugs available with the PBS and these are marketed by 2,602 different manufacturers allowing the PBS to have wide range of medicine for different diseases (8).
Figure 1: Medicinal policy overview
Source: (1)
From the above figure it can be seen that Australian and medicinal program from New Zealand provides universal coverage of subsidised medicines to their citizens utilising the different policies. However, when it comes to the patient co-payment, then there is wide amount of difference between the two nations highlighting the fact that there is moderate amount of different in between the overall medicinal policies of these states as well (9).
Access to these medicines is a very common public health issue in many developed countries as some of the new medicines are quite expensive and are unaffordable to many patients owing to the fact that there is a very limited access to public. Contrary to this, New Zealand and Australia, both the countries are well known for implementing national medicinal policies which focuses on providing access to cost effective and safe medicines (10). New Zealand and Australia, both the countries have adopted different approaches towards funding medicines.
The Pharmaceutical Management Agency of New Zealand (PHARMAC) decides which pharmaceutical products should be subsidized for the use for common people and public hospitals. It also alters the pricing scheme of different types of vaccines, medical devices and on medicines used for treatment of cancer. PHARMAC also aims to lower the prices of expensive medicines, promotes the use of generics and bundling deals. PHARMAC maintains the pharmaceutical schedule of New Zealand and manages the purchasing of different pharmaceutical products on behalf of District Health Boards (11). However, in case of Australia all the pharmaceutical products are subsidized and funded by Pharmaceuticals Benefit Scheme. It is registered under Therapeutic Goods Administration. It funds the prescription medicines to the Australians. A method of reference pricing is also used for generic medicines. However, it has been seen that the generic medicines are much highly priced in Australia compared to New Zealand.
Policies such as program budgeting, negotiating tough price and different mechanisms of procurement like competitive tendering helped New Zealand to save a lot. The government of New Zealand has only funded less than half of the new medicines over a decade. Presence of excellent medicinal policies in both the countries provides its citizens a cost effective and safe pharmaceuticals. Australia usually spend more than double on pharmaceuticals compared to New Zealand (12). Introduction of new pricing policies by Australia includes incentives to pharmacies. The use of medicines has also increased due to the growing of the ageing population. Growth in medicinal expenditures has forced the government to fund specialized expensive medicines. The Pharmaceutical Management Agency of New Zealand and Pharmaceutical benefits advisory committee works on cost effectiveness of all the different kind of new medicines. The suppliers following the guidelines of PABC usually provides a detailed budget impact analysis for each new medicines. The analysis provided are then scrutinised by the Economics Sub Committee of PBAC (13). The models are then evaluated in detail by the Pharmaceutical Evaluation Section which includes the economic data which is used to populate the model (11). In New Zealand there is a presence of red tape in accessing the unlisted treatments for the patients. The public consultation made by PHARMAC presented the negative experiences which relates to lack of access to various kind of drugs. Australia had spent around US$587 for subsidising the medicines on the other hand New Zealand had only spent US$288 (14). Had Australia adopted the pricing system of New Zealand, it would have reduced its expenditure by a $1.1 billion a year. PHARMAC also deters the listings of new medicines so that there is a decline in price with time (15).
It is easier for New Zealand to achieve more savings because of the negotiations in the price and combination of program budgeting. Analysis of pharmaceuticals is very important in order to select medicines for reimbursements. There is a presence of consistent coverage in pharmaceuticals which are both universal and consistent along with low patient pharmaceutical co-payments (16). Reference pricing is also used by Australians in case of generic medicines with health outcomes and similar safety. Several pricing policies have been reformed in Australia in the year 2014 (17). The Pharmaceutical Benefit Scheme is a program made by the government of Australia which provides prescription drugs that are subsidized for the Australian residents. This scheme ensures that the residents of Australia have reliable and proper access to a wide range of necessary medicines.
Figure 2: Performance difference of medicinal policies
Source: (1)
As it can be seen from the above figure, New Zealand has been successful to reduce their price in government sector and market has become monopsony in nature. Contrary to Australia has introduced mandatory pricing strategy through their medicinal policies and has reduced the price in the successive periods (14). Both the countries are facing challenges in terms of medicinal policy implementation where high generic price of medicines and impact of TPPA on prices of medicines has impacted the performance of medicine market of both the state.
Due to the rising cost of PBS, it has faced much scrutiny. The key component of health care in Australia is the PBS along with Medicare. National Health Act and National Health Regulations governs the Pharmaceutical Benefit Scheme. The suppliers under PBS are usually pharmacists and medical practitioners (17). The benefits of pharmaceutical under the scheme of PBS are administered by Medicare Australia. The benefits on the medicines are only given on those mediations which ate listed in the Pharmaceutical Benefits Schedule. The cost of the pharmaceuticals is negotiated between the supplier of the drugs and the government of Australia (18).
There had been a lot of significant changes in case of the health care system in Australia. The Pharmaceutical Management Agency of New Zealand was introduced in 1993 in order to decide which medications to subsidise by the government (19). The PHARMAC is the crown entity of New Zealand, which with the help of District Health Boards decides on the subsidy of pharmaceutical products. The primary aim of the scheme is to provide security for those eligible people who are in need of pharmaceuticals. In the year 2017, the subsidy budget of PHARMAC was around $850million which has been used to subsidize 48.5 million prescriptions (20).
Conclusion:
To conclude it can be stated that difference is presence in terms of pricing policy and strategy implementation in the medicinal policies of both the countries. However, both of them are aimed to provide the best in class service to their citizens. With moderate difference in the price of the subsidised medicinal policy, New Zealand has been effective enough to introduce medicinal policy, however, enhancing cost burden of the PBS from Australia is a major concern of the state.
References:
Babar ZU. Pharmaceutical policies in Australia and New Zealand. Journal of pharmaceutical policy and practice. 2015 Dec;8:1-.
Vogler S, Vitry A. Cancer drugs in 16 European countries, Australia, and New Zealand: a cross-country price comparison study. The Lancet Oncology. 2016 Jan 1;17(1):39-47.
Van Boeckel TP, Gandra S, Ashok A, Caudron Q, Grenfell BT, Levin SA, Laxminarayan R. Global antibiotic consumption 2000 to 2010: an analysis of national pharmaceutical sales data. The Lancet Infectious Diseases. 2014 Aug 1;14(8):742-50.
Vogler S, Kilpatrick K. Analysis of medicine prices in New Zealand and 16 European countries. Value in health. 2015 Jun 1;18(4):484-92.
Taylor C, Wonder M. Exploring the implications of a fixed budget for new medicines: a study of reimbursement of new medicines in Australia and New Zealand. Australian Health Review. 2015 Sep 21;39(4):455-61.
Godman B, Malmström RE, Diogene E, Gray A, Jayathissa S, Timoney A, Acurcio F, Alkan A, Brzezinska A, Bucsics A, Campbell SM. Are new models needed to optimize the utilization of new medicines to sustain healthcare systems?. Expert review of clinical pharmacology. 2015 Jan 2;8(1):77-94.
Iyengar S, Tay-Teo K, Vogler S, Beyer P, Wiktor S, de Joncheere K, Hill S. Prices, costs, and affordability of new medicines for hepatitis C in 30 countries: an economic analysis. PLoS medicine. 2016 May 31;13(5):e1002032.
Elwood JM, Aye PS, Tin ST. Increasing disadvantages in cancer survival in New Zealand compared to Australia, between 2000-05 and 2006-10. PloS one. 2016 Mar 3;11(3):e0150734.
Lu CY, Lupton C, Rakowsky S, Ross-Degnan D, Wagner AK. Patient access schemes in Asia-pacific markets: current experience and future potential. Journal of pharmaceutical policy and practice. 2015 Dec;8(1):6.
Ragupathy R. Comparing the reimbursement of new medicines between Australia and New Zealand. Australian Health Review. 2016 Feb 22;40(1):118-9.
Vitry AI, Thai L, Roughead EE. Pharmaceutical pricing policies in Australia. InPharmaceutical prices in the 21st century 2015 (pp. 1-23). Adis, Cham.
Pfaller MA, Shortridge D, Sader HS, Castanheira M, Flamm RK. Ceftolozane/tazobactam activity against drug-resistant Enterobacteriaceae and Pseudomonas aeruginosa causing healthcare-associated infections in the Asia-Pacific region (minus China, Australia and New Zealand): report from an Antimicrobial Surveillance Programme (2013–2015). International journal of antimicrobial agents. 2018 Feb 1;51(2):181-9.
Ragupathy R, Kilpatrick K. Pharmaceutical pricing in New Zealand. InPharmaceutical Prices in the 21st Century 2015 (pp. 189-207). Adis, Cham.
Loyola-Sanchez A, Hurd K, Barnabe C. Healthcare utilization for arthritis by indigenous populations of Australia, Canada, New Zealand, and the United States: A systematic review?. InSeminars in arthritis and rheumatism 2017 Apr 1 (Vol. 46, No. 5, pp. 665-674). WB Saunders.
Thai LP, Vitry AI, Moss JR. Pricing and utilisation of proton pump inhibitors in South Australian public hospitals and the Pharmaceutical Benefits Scheme. Journal of Pharmacy Practice and Research. 2016 Jun;46(2):130-6.
Vajdic CM, Stavrou EP, Ward RL, Falster MO, Pearson SA. Minimal excess risk of cancer and reduced risk of death from cancer in Australian Department of Veterans’ Affairs clients: A record linkage study. Australian and New Zealand journal of public health. 2014 Feb;38(1):30-4.
Evans J, Laking G, Strother M, Wang T, Metcalfe S, Blick G, Pauls R, Crausaz S. Mind the gap: An analysis of foregone health gains from unfunded cancer medicines in New Zealand. InSeminars in oncology 2016 Dec 1 (Vol. 43, No. 6, pp. 625-637). WB Saunders.’
Francis S. Identifying priority medicines policy issues for New Zealand: a general inductive study. BMJ open. 2014 May 1;4(5):e004415.
Lal A, Mantilla-Herrera AM, Veerman L, Backholer K, Sacks G, Moodie M, Siahpush M, Carter R, Peeters A. Modelled health benefits of a sugar-sweetened beverage tax across different socioeconomic groups in Australia: A cost-effectiveness and equity analysis. PLoS medicine. 2017 Jun 27;14(6):e1002326.
Hossain S, Shah PS, Xiang YY, Darlow BA, Lee SK, Lui K, Canadian Neonatal Network. Outborns or inborns: where are the differences? A comparison study of very preterm neonatal intensive care unit infants cared for in Australia and New Zealand and in Canada. Neonatology. 2016;109(1):76-84.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download