Expiry of patent protection on statins: effects on pharmaceutical expenditure in Australia

Abstract

Objective: To compare changes in the costs of statins following patent expiry in Australia and England, and to estimate projected savings for Australia based on the government and consumers paying prices equivalent to those in England and increased use of generics.

Design: Review of administrative data and predictive models based on recent trends.

Setting: Administrative price and quantity data for the Pharmaceutical Benefits Scheme between January 2002 and October 2009, and comparable information from England.

Main outcome measures: Total government and consumer expenditure on statins whose patent has expired, and projected expenditure on all statins from January 2009 to December 2019 under various scenarios regarding pricing and prescribing trends.

Results: From January 2005 to October 2009, the cumulative loss to the Australian community from paying more than the English price for generic statins was more than $900 million. Expenditure could have been reduced by a further $1087 million if Australia had increased the proportion of generic medications prescribed to match trends in England. Future savings depend on the proportion of statin prescriptions that are subject to lower generic pricing. From January 2009 to December 2019, potential savings from paying English prices could be as high as $3.21 billion, and savings of up to $9.31 billion could be made by paying English prices and using generic statins only.

Conclusion: The current arrangement for pricing statins places a considerable burden on the Australian community. Alternative pricing arrangements that provide incentives to lower statin prices and increase the proportion of generic prescriptions could be highly advantageous.