Australian budget hits distributors' share prices

24 May 2001

Share prices of Australian pharmaceutical distributorsF H Faulding, Sigma Co and Australian Pharmaceutical Industry fell after details of the country's federal pre-election budget were published on May 22.

The government is reportedly negotiating to reduce the amount it pays drug distributors under the Pharmaceutical Benefits Scheme, and Sigma stock fell 14.5% to A$2.00 ($1.05), Faulding dropped as much as 7.4% to A$10.02 and API declined one cent to A$2.45 on the news.

The budget included the expectation of a larger-than-forecast surplus for 2001-2, to total A$1.5 billion, and the government said that it would be spending A$2.6 billion in the period on health care, welfare and care of the elderly. As part of this commitment, it says it will give all Allied veterans of World War II aged 70 or over full access to the PBS.

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