Medical relief on the way but drinkers will pay more

[grace]

AUSTRALIANS will pay less for prescription drugs in a Budget plan to slash the price paid to companies for 100 common medicines.

 

But the price of beer, wine and ready-to-mix spirits is set to rise as the Budget razor gang searches for billions of dollars in savings.

 

The medicines plan - considered by senior ministers on Tuesday - is designed to save hundreds of millions of dollars each year for sick Australians.

 

It will cut the price for some contraceptive pills, cholesterol, blood pressure and arthritis medicines.

 

Where the medicines affected by the price cuts cost less than $32.90, consumers can still expect to benefit. Pensioners will continue to pay $5.30.

 

The Budget cuts will place the Rudd Government on a collision course with powerful drug firms.

 

The Government is confronting a further decline in tax revenue though, forcing the razor gang to search even harder for Budget savings.

 

With the Budget review in full swing, senior ministers are considering several options to raise so-called "sin taxes" as part of a $3 billion Budget swoop.

 

Sources said one option would be to increase alcohol taxes despite the threat of a backlash from drinkers.

 

The Government will argue that it is removing anomalies in the way alcohol products are taxed. For instance, one option would see the concessional excise removed on draught beer sold in pubs.

 

The plan to cut the price of medicines also carries a risk for Prime Minister Kevin Rudd, who continues to attract record approval ratings.

 

Industry sources believe the price cuts will lead to some low-profit medicines being taken off pharmacy shelves.

 

Drug companies could also counter the mandatory price cuts by introducing a price "premium".

 

Two major drug companies did this last week when they raised price premiums on 12 medicines by $2 in response to a previous round of Government price cuts.

 

Consumers can avoid premiums by choosing a cheaper brand of the same drug.

 

The medicine price cuts are designed to claw back for taxpayers the big price discounts pharmacists get on the price of drugs when they buy the products in bulk.

 

The Government reaches agreements with drug companies about how much it will pay for a drug on the nation's drug subsidy scheme, but often pharmacists can obtain the drug for 10-20 per cent less.

 

Pharmacists get to keep most of those savings.

 

The government will claim these savings back for the taxpayer by cutting the price it pays for the drugs in the first place.

 

Authors: Steve Lewis and Sue Dunlevy

Date: 8 April 2009

Source: Herald Sun

Copyright: Herald and Weekly Times

http://www.news.com.au/heraldsun/story/0,2...023-662,00.html

[luciddreaming]

This is kind of un-related but I really hate how they say....

"The Government will argue that it is removing anomalies in the way alcohol products are taxed."

There are no fucking anomalies in existence here. Everything that happens is how they intended it to be.

 

Anyway.... 'Spose this is a good thing. But it will see the amount of useless drugs sales go up astronomically.