Govt Undermining R&D, Investment Policy, Say Australian Drug Cos

Australia's federal government's new drug subsidy scheme risksundermining other government policies to promote research and investment in the Australian pharmaceutical industry, according to an industry-commissioned study.

The federal government introduced the new scheme in its 1997/98 budget to save A$560 million ($408.4 million; Marketletter May 26) ) over four years. It groups similar drugs in therapeutic categories and the government subsidy is based on a low price benchmark for each category, with the consumer paying the remainder.

Pat Clear, chief executive of the Australian Pharmaceutical Manufacturers' Association, said in an interview that "the scheme will make Australia an unattractive investment option for the international pharmaceutical industry," and that "it may lead to the winding down of an industry built up solidly over the past 10 years with the Factor (f) scheme."