Australia's drugs bill is latest political football as NZ-style tendering process is threatened

Australia's Treasurer has proposed splitting the savings - made from switching from branded to generic treatments - between government and patients. The move, by Peter Costello was criticized as "grandstanding" by political opponents who see the timing of the Finance Minister's intervention as motivated by a desire to position himself for a leadership challenge, should the present Prime Mini-ster, John Howard, step down. Australian generic drug makers find themselves the targets of a campaign to save public money and score political capital in the process.

The drugs bill in Australia has doubled in the past eight years, from less than A$3.0 billion ($2.21 billion) in 1997-1998, to A$6.0 billion in 2004-2005. In 2001, drug prices grew 22%. A number of reforms involving large increases in co-payments and price controls on drugs where patents have expired, are credited with reducing over-prescription by doctors and restricting the growth in the overall cost of the Pharmaceutical Benefits Scheme.

The new focus is on generics prices where, according to Andrew Laming, a ruling Liberal party member of parlia-ment and doctor, told the Australian newspaper: "we pay A$800 million too much for plain-label medications each year."