Medicines Australia chairman Will Delaat said new reforms to the Pharmaceutical Benefits Scheme (PBS) being considered by the Senate will reduce by as much as $21 the prices patients pay for many prescription medicines.

A Senate Committee report on the legislation was included in the agenda of the Senate. The legislation is supposed to deliver $1.86 billion in PBS savings to the national government. The legislation is a part of the Memorandum of Understanding between Medicines Australia and the Commonwealth.

The measure is supported by the Consumers Health Forum, Breast Cancer Network Australia, the National Prescribing Service and the Pharmacy Guild as well as by Medicines Australia's 50 member companies.

"As our population ages and the demands on the health budget grow, the only way we can continue to fund the latest life-saving medicines as they come online and ensure the sustainability of the PBS is by driving savings through competition in the older, off-patent market," said Mr. Delaat.

"The fact is that while the Australian Government pays on average 20 per cent less than the OECD countries for new, patented medicines, the prices it pays for older, generic medicines are high by international standards."

Mr. Delaat observed that while Australia's low prices for new medicines have led to delays in their listings, Australians continue to pay premium for old medicines, which are now cheaper in other markets.

In a recent report, Australia had ranked at the bottom third when it comes to patient access and public coverage of new medicines in industrialised countries as shown in a new report.

The Rx&D International Report on Access to Medicines 2009-10 ranks Australia 23rd out of 31 OECD countries in terms of expenditure on medicines as a proportion of GDP.

The report also revealed that Australia ranks 24th out of 30 countries in terms of government's share of national healthcare expenditures. It ranks 19th out of 29 in terms of willingness to reimburse new medicines, with 60% reimbursement of the 150 medicines reviewed in the study, as compared with the OECD average of 64 per cent.

It was also found that the proportion of first-in-class medicines included in the study that were subsidised in Australia is only 52% compared with an OECD average of 65 per cent, giving Australia the rank 20th out of 29, in the area. In terms of medicines used for cancer, Australia ranks 20th out of 29 countries when looking at the number of medicines that are subsidised.