Datamonitor: Australia - election outcome offers renewed hope for pharmaceutical stability

Oct. 5, 2010 - PRLog -- However, the election and subsequent hung parliament delayed its implementation. Now, with the Labor Party once more seated in power, Datamonitor expects the government to move forward with the existing agreement.

More than two weeks after the Australian election resulted in a hung parliament, Julia Gillard's Labor Party has managed to form a minority government with the backing of a handful of rural independent MPs. Helping to sway the Independents' support was a promise that the next round of health and hospitals funding will be dedicated to regional Australia, in addition to Labor's previous commitments to investments in telehealth.

However, the pharmaceutical industry will be most interested in the future of the Memorandum of Understanding (MoU), a government agreement that was drawn up with Medicines Australia as part of Labor's Budget 2010-11 in May. The debate regarding the sustainability of the Pharmaceutical Benefits Scheme (PBS) led the government to seek further savings, while Medicines Australia sought to protect its members from further unexpected price cuts.

From the innovator industry's perspective, the most important tenet of the MoU was that it would provide a stable pricing policy environment, in which the government promised not to implement new legislation to generate price-related savings from the PBS (at least until mid-2014, when the agreement is due to expire). However, the progression of the MoU through the Senate hit a snag when the elections were called in August.

The MoU's underlying legislation has now lapsed and the relevant bill has to pass through the House of Representatives to the Senate again before it can be voted into effect. This will most likely push back the first set of price cuts, which were originally scheduled for implementation on October 1, 2010.

Despite the delay, a Labor government is most likely to put the MoU into practice relatively unchanged, thus providing Australia's pharmaceutical industry with the stability which it so desperately craves.  


Related research

Datamonitor: Australia Pharmaceutical Market Overview - Reforms and continued price cuts will change the healthcare landscape:
http://www.reports-research.com/market-surveys/australia-...  

Datamonitor: Commercial Insight: Opioids in Australia:
http://www.reports-research.com/market-surveys/commercial...  

Datamonitor: Commercial Insight: Asthma/COPD in Australia:
http://www.reports-research.com/market-surveys/commercial...

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